Microinsurance Product Pool

(1)

Microinsurance

Product Pool

Allianz SE

April 2015

Overview and assessment

of Allianz microinsurance products

(2)

S

E

2015

Introduction

This microinsurance product pool lists the microinsurance products of Allianz Group that

currently provide insurance cover to low-income people in emerging markets and

developing countries. Products launched since June 2013 which still have less than 1,000

inforce (active) policies are not included.

Two non-microinsurance products are included at the end to show why some Allianz

products are not considered microinsurance although they also serve low-income people.

This initiative supports the “Transparency” value of our Allianz microinsurance values:

Passion

Quality

Fairness

Transparency

e.g. product pool

A. Product specifications

Gives a high-level explanation how the product looks like

(distribution, benefits, pricing)

B. Product assessment

2

Matches the product against the Allianz

This includes

1. Knock-out criteria: “Can we call this product micro?”, and

2. Qualitative criteria: “How well does the product fulfill our

microinsurance values?”

2

C. Product brochures

where available

Allianz Microinsurance Values

1

Information on each product is presented in three sections:

We will update this product pool every April and October as new microinsurance products are

launched and existing products are modified or taken off market. We try to list products from

the moment that over 1,000 inforce (active) policies are first reached until the last policy

matures. However, there is no duty to update (

see disclaimer

).

Martin Hintz



+49 89 3800-18401

Microinsurance

E-mail:

Allianz SE

Is this really the latest?

Contact

(3)

© A lli a nz S E 2015 3 Knock-out criteria: "Can we call it micro?" Qualitative criteria: "How well aligned with our microinsurance values?" Quality rank avg. c1-c7 A B C D 1 2 3 4 5 6 7 Details on page Ins ur ance pr inci pl es Dev . Count ry or E M Low -inco m e f ocu s No s ubs idi es > 50% S tr ong Ri s k M gm t O ther benef its Cus tom er s i nv olv ed V ol unt ar y Cus tom er educa tion P roduct s im pl ici ty Low tr ans act ion co s ts

# Country Company Product _Name

1 Burkina & Mada-gascar Allianz Africa Mobile Term Life



+

-

-+

+

1.4

 5 2 Colombia Allianz Colombia Family Term Life



+

-+

+

1.4

 8 3 Colombia Allianz Colombia Home Business



+

-+

+

1.4

 10 4 Colombia Allianz Colombia Life & Maternity



+

-+

+

1.4

 12

5 Ivory _Coast Allianz _Africa Mobile _Funeral



+

-

+

1.4

 14

6 India Bajaj Allianz Life Life + Savings



+

-

-+

+

1.3

 18 7 Indonesia Allianz Life Credit Life Plus



+

-

+

1.3

 20

8 Ivory _Coast Allianz _Africa Funeral _Insurance



+

-

-+

+

1.3

 24 9 Indonesia Allianz General Scratch- card PA2



-

+

-

+

1.1

 28

10 India Bajaj Allianz

General Crop Index



+

-

+

-

+

1.0

 32 11 Malaysia Allianz General Motorcycle + PA2



+

-

-+

+

-

+

1.0

 35 12 West Africa & Egypt

Allianz Africa Credit Life



₊

_-

+

-

-+

+

1.0

 39

13 West _Africa Allianz Africa Crop Index



+

-+

+

-

+

1.0

 41

14 Burkina Allianz Africa

Savings-Life



+

-

+

-+

+

0.9

 45

15 India Bajaj Allianz General Cattle & Livestock



+

-

+

-

+

0.9

 47

Overview

1

1) See our website for a full explanation of our

2) PA: Personal Accident

Note: A high ranking is only an indicator for compliance with Allianz’ microinsurance values, not an indicator for actual business success

new new

(4)

S E 2015 Knock-out criteria: "Can we call it micro?" Qualitative criteria: "How well aligned with our microinsurance values?" Quality rank avg. c1-c7 A B C D 1 2 3 4 5 6 7 Details on page Ins ur ance pr inci pl es Dev . Count ry or E M Low -inco m e f ocu s No s ubs idi es > 50% S tr ong Ri s k M gm t O ther benef its Cus tom er s i nv olv ed V ol unt ar y Cus tom er educa tion P roduct s im pl ici ty Low tr ans act ion co s ts

# Country Company Product Name

16 India Bajaj Allianz Life Group Term Life



+

-

+

0.9

 49

17 India Bajaj Allianz General Personal Accident



+

-

+

-

+

0.6

 51

Overview

1

# Country Company Product Name Knock-out criteria: "Can we call it micro?" Qualitative criteria: "How well aligned with our microinsurance values?" Quality rank avg. c1-c7 Details on page A B C D 1 2 3 4 5 6 7

1 Ivory _Coast Allianz _Africa Mobile _Savings





not

micro  53

2 Malaysia Allianz Life

+ General Life & PA

2





not

micro  57

Non-qualifying products

due to failing on criteria A - D

Non-qualification means that a product has failed to meet any of the four basic criteria A – D of the Allianz

Group microinsurance definition, although they may still address needs of low-income people. Sample cases are shown here to better illustrate conditions under which this may happen.

# Country Company Product Name Knock-out criteria: "Can we call it micro?" Qualitative criteria: "How well aligned with our microinsurance values?" Quality rank avg. c1-c7 Reason for phase out A B C D 1 2 3 4 5 6 7

1 India Bajaj Allianz

General PA Plus



+

-

+

-

+

0.9

Phased out for lack of scale Phased out products

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1. Burkina & Madagascar: Mobile Term Life

Product name

(generic or marketing name)

 Airtel Mobil’Assur

Product type

(e.g. term life, endowment, motorcycle)

 Enhanced Mobile Term Life

Company name  Allianz Africa

Country  Burkina Faso and Madagascar

Distribution partner type

(e.g. MFIs, banks, coops, retailers)

 Airtel telecommunication company, with MicroEnsure as service provider

Launch date

(and stop date if any)

 June 2014

1-sentence product description  In its current first phase, the product provides free cover for (a) death due to all causes, (b) total permanent disability due to accident , and (c) a lump sum hospital cash benefit for inpatient stays of minimum 3 days. Sums insured are linked to airtime consumption (“the more you call the more cover you get”). Premiums are paid by Airtel as a loyalty scheme

 In a second phase (still to be launched) , sums insured will double, a flat standard monthly fee to customers will be added, and customers will be able to enroll another family member (against extra premium).

Group or individual product  Group

Voluntary opt-in, opt-out or compulsory

 Voluntary opt-in

Covered risks & benefits / sum insured

 Sums insured depend on the previous month’s airtime consumption

 Death due to all causes and Total Permanent Disability due to accident (values from Burkina Faso):

 Phase 1: XOF 75,000 – 750,000 (~ EUR 115 – 1,150)

 Phase 2: XOF 75,000 – 1,500,000 (~ EUR 115 – 2,300)

 Hospital cash lump sum, paid for every hospital stay of min. 3 days (values from Burkina Faso):

 Phase 1: XOF 5,000 – 25,000 (~ EUR 7.60 – 38.0)

 Phase 2: XOF 5,000 – 50,000 (~ EUR 7.60 – 76.0)

Premium range

(min, max)

 Phase 1: free, starting from min. previous month’s airtime consumption of XOF 1,000 (~ EUR 2.30) and max. sum insured reached if previous month’s airtime consumption is XOF 10,000 or more (~ EUR 15)

 Phase 2: XOF 300 (~ EUR 0.45) for 1 person or XOF 1,000 (~ EUR 1.50) for 2 persons with no min. airtime and max. sum insured reached if previous month’s airtime is min. XOF 10,000 (~ EUR 15)

Avg. premium / year

(annualize if necessary)

 Phase 1: free

 Phase 2: XOF 4,800 (~ EUR 7.20), i.e. average XOF 400 per month (~ EUR 0.60)

Other comments  In phase 2, if customers don’t choose at least the XOF 300 plan (i.e. 1 person), all coverage will stop

 Even in phase 2, benefits will continue to increase with the previous month’s airtime consumption regardless of the flat membership fee

 In cooperation with

A. Product Specifications

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1. Burkina & Madagascar: Mobile Term Life

B. Product Assessment

1

Product:

Airtel Mobil’Assur

Ranking2 _{Rationale / Comments}

A Insurance principles applied



Fully applied

B Developing country or emerging

market



Burkina Faso and Madagascar are developing countries according to World Bank

C

Great majority of insured people or assets from low-income segment



With its small sums insured and eligibility for pre-paid airtime customers only (instead of the generally better-off post-paid customers), it can be safely assumed that the great majority of insured is low-income

D No government subsidies of

more than 50%



No subsidies

1 Significant contribution to risk

management of end customers

++

Of the three covered risks (death, accidental disability and hospitalization) at least death and hospitalization can be considered a high risk to most, especially for low income people to whom the sums insured are meaningful

2

End-customer receives other tangible benefits (e.g. discounts, lottery etc.)

-

None 3 End-customers involved in product development

-

No 4 Voluntary opt-in (++), voluntary opt-out (+) or compulsory (

-

)

++

Voluntary opt-in

5 Customer education and

feedback mechanisms in place

++

Giving the product away for free in its initial launch phase carries a strong “learning by doing” element, i.e. a form of customer education. Moreover, a 24h toll-free hotline is available for inquiries.

6

Simple product specifications (e.g. pre-underwritten, few exclusions)

++

Enrollment is straight forward through USSDwith few questions asked, on the spot acceptance. Exclusions are minimal.Claim requirements are also reduced to an absolute and flexible minimum.

7 Strong measures to ensure low

transaction costs

++

Fully digital enrollment and (in phase 2) digital collection, plus simplified processes and documentation requirements allow for efficient, low-cost mass-scale administration

(7)

1. Burkina & Madagascar: Mobile Term Life

C. Product Brochure

>> back to Overview

Burkina Faso

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2. Colombia: Family Term Life

Product name

 “Seguro de Vida” (Life Insurance)

Product type

 Term Life

Company name  Allianz Colombia

Country  Colombia

 Microfinance Institution (MFI)

Launch date

 1 July 2012

1-sentence product description  Voluntary Group Term Life Insurance that provides life insurance cover to the group’s members (and optional their partners) plus additional funeral cover to the insured group members and up to 4 freely chosen close relatives

 Death due to any cause of insured (i.e. group member and optional – against additional premium – the partner): COP 3mn to COP 15mn depending on chosen premium plan (~ USD 1,600 to 8,000)

 Funeral benefit to member and 4 freely chosen close relatives (which can include the partner): up to maximum COP 3mn (~ USD 1,600) for all premium plans. Benefit expires after 2 death cases

 Maximum sum assured per person: COP 30mn (~ USD 16,000), e.g. if a client has multiple policies of this product

Premium range

(min, max)

 Minimum COP 9,960 per month (~ USD 5.50) for minimum benefits for single insured and 4 relatives

 Maximum COP 42,068 per month (~ USD 23.00)for maximum benefits for insured, partner and 4 relatives

 COP 122,880 (USD ~ 68.00)

Other comments  The product is only available to active clients of the MFI, i.e. those who have an active credit and/or savings account with that MFI

 90 days waiting period for minor pre-existing conditions

 180 days waiting period for major pre-existing conditions (e.g. cancer) and suicide

(9)

2. Colombia: Family Term Life

>> back to Overview

C. Product Brochure: not available

B. Product Assessment

1

Product:

Seguro de Vida



Fully applied

market



Colombia is an emerging market according to S&P and a developing country according to World Bank

C



The MFI distributor targets low-income families, i.e. strata 1 - 3 of the 6-step Colombian socioeconomic stratification. This can also be seen by the low maximum loan amount of their micro-credit segment of COP 2.3mn(~ USD 1,300)

more than 50%



No government subsidies

++

The product protects several family members against death which is a significant risk. Coverage includes pre-existing conditions which allows for the inclusion of more vulnerable people (subject to waiting periods).

2

-

None

3 End-customers involved in

product development

++

Workshops were done by the MFI in selected branches to garner input for the product design, especially as previous life insurance offers had not found wide acceptance among customers

4

Voluntary opt-in (++), voluntary opt-out (+) or compulsory (

-

)

++

Fully voluntary for existing customers of the MFI

++

Simple brochures are provided, and – because many customers are not fully literate - the bank’s staff also gives verbal explanations. Customers receive insurance

certificates, have access to a 24/7 hotline and to a special claim help desk

6

+

Simple product withouthealth declaration. Several plan options exist, so the distinction of which family member has what level of coverage takes time to understand. Certain waiting periods and exclusions exist.

+

Monthly batch processing from MFI to insurer, sales are done complementary on top of other products (credit, savings). A claim help desk and a bank agent help desk achieve streamlining of the service processes

Overall ranking3 _1.4

2) For knock-out criteria A-D: or ; for criteria 1 – 7: “-” (0), “+” (1) or “++” (2) 3) Average of criteria 1 – 7. Minimum 0.0, maximum 2.0.

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3. Colombia: Home Business

Product name

 “Seguro de Hogar” (Home insurance)

Product type

 Property

Launch date

 1 July 2012

1-sentence product description  Voluntary Group Property insurance that covers private homes, including those used for home-based business, against damage to the building and its content arising from various risks such as fire,

lightening, flooding, windstorm, civil commotion etc.

 Costs of repair or replacement (but not improvement) of home and home content damages due to below risks are covered as follows for Plan 1/Plan 2 respectively

 A: Fire, lightening, explosion, windstorm (incl. related rains and floods), falling trees, falling aircraft and vehicle crashes: up to COP 20mn/15mn (~ USD 11,000/8,000)

 B: Water damage, flooding, avalanche and landslides: up to COP 5mn/3mn (~ USD 2,500/1,600)

 C: Violent strikes, civil commotion and malicious acts by 3rd parties: up to COP 10mn/7.5mn (~ USD 5,000/ 4,000)

 D: Actions to contain damage, actions of public authorities and debris removal: up to COP 2mn/1.5mn (~ USD 1,100/800)

 Max. sum insured from all risks per home over the entire life of the policy is COP 20mn (~ USD 11,000), i.e. should the accumulated damages exceed that amount, the excess is not covered and coverage will end

Premium range

(min, max)

 Minimum (Plan 2): COP 4,995 (~ USD 2.75) per month

 Maximum (Plan 1): COP 6,660(~ USD 3.60)per month

 COP 67,200 (~ USD 37.00)

Other comments  The product is only available to active clients of the MFI, i.e. those who have an active credit and/or savings account with that MFI

 Earthquake risk is not covered, as this is not considered important by customers and would significantly increase the premium

 A deductible of 10% applies to risks B and C above; risks A and D do

A. Product Specifications

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3. Colombia: Home Business

Product:

Seguro de Hogar



Fully applied

market



C



The MFI distributor targets low-income families, i.e. strata 1 - 3 of the 6-step Colombian socioeconomic stratification. This can also be seen by the low maximum loan amount of their micro-credit segment of COP 2.3mn(~ USD 1,300)

more than 50%



++

Several serious risks to home property are covered. The sums insured are high enough to allow

micro-entrepreneurs to quickly get back on their feet and resume their home-run businesses after a claim.

2

-

None

++

The product was developed based on strong customer demand to cater to the insurance needs of small

entrepreneurs that borrow from the MFI and often run their business out of their private homes

4

-

)

++

Fully voluntary for existing customers of the MFI

++

Simple brochures are provided, and – because many customers are not fully literate - the bank’s staff also gives verbal explanations. Customers receive insurance

certificates, have access to a 24/7 hotline and to a special claim help desk

6

+

For a property product, design and policy wording are kept relatively simple, with only 2 available coverage plans. Still, time is needed to explain the exact covered risks, the deductibles and the claim procedure.

+

Monthly batch processing from MFI to insurer. No on-site claim inspection needed. A claim help desk and a bank agent help desk achieve streamlining of the service processes

>> back to Overview

C. Product Brochure: not available

B. Product Assessment

1

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4. Colombia: Life & Maternity

Product name

 “Voy Seguro” (I go safely)

Product type

 Term Life

Launch date

 1 November 2012

1-sentence product description  Voluntary Group Term Life Insurance that also provides maternity benefits to the insured or partner during pregnancy and after birth

 Death of the insured due to any cause: COP 4mn basic life benefit + COP 600k for food basket + COP 500k funeral assistance, i.e. total death benefits of COP 5.1mn (~ USD 2,800)

 Maternity benefits for insured or partner: COP 400k at 6 months into pregnancy and COP 200k after birth, i.e. total maternity benefits of COP 600k (~ USD 330)

 Maximum sum assured per person: COP 32mn (~ USD 18,000), e.g. if a client holds multiple policies of this product

Premium range

(min, max)

 COP 4,990 per month (~ USD 2.75)

 One standard plan only; no other premium and benefit options

 COP 59,880 (~ USD 33.00)

Other comments  The product is only available to active micro-loan clients of the MFI (the MFI offers no savings services)

 The food basket and funeral assistance benefits are usually paid out as a cash lump sum together with the basic life insurance benefit

 90 days waiting period for pregnancy and minor pre-existing conditions

 180 days waiting period for major pre-existing conditions (e.g. cancer) and suicide

(13)

4. Colombia: Life & Maternity

Product:

Voy Seguro



Fully applied

market



C



The MFI distributor targets low-income families, i.e. strata 1 - 3 of the 6-step Colombian socioeconomic stratification. This can also be seen by the low average loan amount of their borrowers of COP 2mn(~ USD 1,100)

more than 50%



++

Death is a significant risk and coverage includes pre-existing conditions (subject to waiting periods). Moreover, maternity expenses are a very frequent risk even if the related policy benefits are not high.

2

-

None

++

Focus Group Discussions with the MFI customers have strongly influenced the product, for example that the larger part of the maternity benefits is already paid out at 6 months pregnancy. This allows the expectant mothers to prepare in time for the delivery and post-natal phase.

4

-

)

++

Fully voluntary option that can be added to the MFIs credit _offering

++

Customers receive verbal explanations from the bank’s staff. Brochures are not used as customers are often semi-literate. Customers receive insurance certificates, have access to a 24/7 hotline and to a special claim help desk

6

+

Simple, easy to understand product design with only one available standard plan. No health declaration required. However, certain waiting periods and exclusions exist.

+

Monthly batch processing from MFI to insurer, sales are done complementary on top of other products (credit, savings). A claim help desk and a bank agent

help desk achieve streamlining of the service processes

>> back to Overview

C. Product Brochure: not available

B. Product Assessment

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5. Ivory Coast: Mobile Funeral

Product name

 “Allianz Obsèques”

Product type

 Term life insurance

Company name  Allianz Côte d’Ivoire Assurance Vie

Country  Ivory Coast

 Telecommunication company

Launch date

 1 June 2012

1-sentence product description  Voluntary group life insurance for “mobile money” account holders of the partnering telecommunication company; coverage includes protection against death due to all causes and total permanent disability

 Natural death or total permanent disability: FCFA 500,000 (~ USD 900)

 Accidental death: FCFA 1,000,000 (~ USD 1,800)

 Part of the death benefit (up to 100%) can be chosen as direct payment to a designated funeral home to cover funeral expenses (i.e. “in kind” benefit)

Premium range

(min, max)

 FCFA 8,000 (~ USD 14) for yearly or FCFA700 (~ USD 1.3) for monthly payment; premiums are automatically deducted from “mobile money” account

 FCFA 8,400 (~ USD 15), based on the fact that most insured choose the monthly premium payment option

Other comments  Age limits are 21 to 65, with disability coverage expiring at age 61

 Enrollment still happens by physical form filling at the telco’s outlets, but premium payment is only possible through mobile money

 Multiple enrollments are not allowed

A. Product Specifications

(15)

5. Ivory Coast: Mobile Funeral

Product:

Allianz

Obsèques

Ranking

2 _{Rationale / Comments}



Fully applied

market



Ivory Coast, after 10 years of civil war and a political crisis in 2011, is more still very much a developing country

C



The vast majority of the population of Ivory Coast is low income and the low sums insured also only appeal to low-income segments

more than 50%



++

Death is a significant risk for low-income families in Ivory Coast. Optional direct payment of a part of the benefit to funeral homes helps to insure “proper” payout usage. The “payout to annual premium ratio” of 60 is decent

2

-

)

++

Fully voluntary. Moreover, the monthly premium payment _{option allows for cash-flow friendly payment}

++

Customers receive a physical insurance certificate, additional information via SMS and have access to a 8/5 hotline of the insurer

6

++

Policy terms and exclusions are much simplified. _{No health underwriting and waiting period}

++

Premium collection through auto-debit from “mobile money” accounts is very efficient

>> back to Overview

B. Product Assessment

1

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5. Ivory Coast: Mobile Funeral

C. Product Brochure

(17)

5. Ivory Coast: Mobile Funeral

C. Product Brochure

>> back to Overview

(18)

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6. India: Life + Savings

Product name

 Sarve Shakti Suraksha (SSS)

Product type

 5-year term life insurance with systematic savings incorporated

Company name  Bajaj Allianz Life Insurance Company Limited

Country  India

 Non-bank Microfinance Institutions (MFIs), Regional Rural Banks, Banking Correspondents, Customer Support Centers, Cooperatives

Launch date

 Launch date: April 2008

 Stop date: effective August 2013, this product has been closed for the issuance of new group policies, due to regulatory changes

 Last policies will mature in 2019

1-sentence product description  A combination of term insurance and systematic savings benefits designed to provide risk protection as well as alternative savings opportunities

 The product term is 5 years

Group or individual product  Group Insurance

 Sum Insured: Minimum INR 2500 (~ USD 50), no limit on maximum coverage (Subject to underwriting limits)

 Risks covered: Natural and accidental death + disability

Premium range

(min, max)

 Minimum INR 500 (~ USD 10) per annum

 no limit on maximum premium

 INR 1,750 (~ USD 35)

Other comments  The product has won numerous awards, including the Skoch Award for Financial Inclusion 2011 & 2012

(19)

6. India: Life + Savings

Product:

Sarve Shakti

Suraksha (SSS)

Ranking



Fully applied

market



India is an emerging market according to S&P and a developing country according to World Bank

C



Majority of the premiums collected for this product _{are under INR 2,000 (~ USD 40) per year} D No government subsidies of

more than 50%



All premiums are paid by the customer. There is no premium subsidy

+

SSS offers life coverage and a savings feature but claims and especially savings balances are relatively small, even for low-income Indians. Moreover, in case of RBBs outstanding loan balances are deducted first

2

-

)

++

It is a voluntary opt-in. In some cases premium amounts are also bundled with the loan installments to make the product affordable. However, there is no compulsion from the distribution partner’s side at any point in time

++

Allianz hotline printed on every brochure and policy document. A systematic “Value for the Customer” education initiative has been put in place, too

6

++

Guaranteed issuance except where questions on the health declaration are marked as affirmative. Only exclusion: Suicide not covered in year 1

++

The delivery channel fully integrates the product into existing business processes.

Collection is often aligned with loan repayment. Other operational tasks are also outsourced

>> back to Overview

C. Product Brochure: not available

B. Product Assessment

1

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7. Indonesia: Credit Life Plus

Product name

 Payung Keluarga (Family Umbrella)

Product type

 Term Life (attached to credit accounts), with riders

Company name  Allianz Indonesia

Country  Indonesia

 Banks, MFIs

Launch date

 1 Sep 2006 for base product

 27 Nov 2013 for riders

1-sentence product description  Compulsory group credit life coverage (conventional or takaful) with flexible benefits and voluntary add-on riders

 Compulsory for base product (with benefit package pre-configured by MFI), and voluntary for add-on riders

 Mandatory base Product:

 Risk: Death of debtor and spouse (optional)

 Benefit: Outstanding loan balance, or original loan amount

 Additional “funeral” benefit of up to 2x original loan (optional)

 Loans: IDR 0 – max. 200mn (~ USD 0 - 20,000)

 Voluntary riders (since Dec-2013):

 Personal Accident for accidental death and total or partial permanent disability, with benefits of up to IDR 25,000,000 (~ USD 2,500) - pro-rated for partial disability

 Home Insurance for fire; with relocation benefits up to IDR 5,000,000 (~ USD 500) and additional accidental death benefit of up to IDR 5,000,000 (~ USD 500)

 Hospital Cash; with daily lumpsum of up to IDR 250,000 (~ USD 25) from 1st day of hospitalization, for max. 180 days, and max. IDR 2,500,000 (~ USD 250) of surgery benefits

Premium range

(min, max)

 Mandatory base Product:

 IDR 100 to 1mn (~ USD 0.1 – 110), depending on loan amount, tenor & benefits

 Voluntary riders (annualized premium, coverage runs as long as loan):

 Personal Accident: IDR 8,000 – 20,000 (~ USD 0.8 – 2)

 Home Insurance: IDR 5,000 – 30,000 (~ USD 0.5 – 3)

 Hospital Cash: IDR 100,000 – 250,000 (~ USD 10 – 25)

 Base Product: IDR 12,000 (~ USD 1.3)

 Riders: n.a.

Other comments  Base product is modular, with theoretically 54 different benefit configurations for MFIs to choose from

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7. Indonesia: Credit Life Plus

Product:

Payung

Keluarga

Ranking



Applied

market



Indonesia is an emerging market according to S&P and a developing country according to World Bank

C



98% of insured loans are under IDR 5mn (~ USD 550). This serves as a reliable proxy for „majority low income“ customers

more than 50%



++

Death of a breadwinner is a significant risk to low-income families in Indonesia. Although most loans are covered for the outstanding balance only, 20% of them also carry some cash payout to the families. Voluntary riders add further flexibility to customers to manage various other risks.

2

-

None

+

Extensive market research was done to understand the target market. Life risk was only the top4 identified customer risk. The voluntary hospital cash rider, though, addresses the top1 identified customer risk of sickness.

4

-

)

+

The base credit life cover is compulsory for customers as per the MFIs benefit configuration. However, the additional riders can be taken by customers on voluntary basis.

+

Brochures are provided by some MFIs. Other MFIs

distribute member cards instead. MFI staff is also equipped with flip-charts to explain the product on the spot. Direct helpline and Allianz address are not provided, except for the rider products. No systematic feedback collection.

6

++

Free coverage limit up to IDR 10mn (~ USD 1,100). Only 2 exclusions: Suicide and insurance related crime (+ age limit 17-60)

++

Product, distribution and collection are fully integrated with MFI micro loans, including for riders. Most of the data entry and claims handling is also “outsourced” to the MFIs

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7. Indonesia: Credit Life Plus

C. Product Brochure – Compulory base product

Member Card as alternative to brochure

Front

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7. Indonesia: Credit Life Plus

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8. Ivory Coast: Funeral Insurance

Product name

 Assurance Obséques (Funeral Insurance)

Product type

 Funeral Insurance

Company name  Allianz Ivory Coast

Country  Ivory Coast

 Microfinance Institutions (MFIs)

Launch date

 October 2009

1-sentence product description  Payment of a lump sum in case of death due to any cause, with variable options (accidental death, education grant for children, family

coverage); exact offering may vary per MFI

 Death: lump sum from XOF 300,000 to 2,000,000 (~ USD 600 – 4,000), depending on selected benefit plan

 With some MFIs,

 spouse, children, and parents can be selectively added to coverage

 the death benefit is doubled in case of accidental death

 the insured can choose to have approx. 60% of the death benefit paid directly to an undertaker

 a supplementary education rider can be added, which provides additional XOF 250,000 to 500,000 for 4 to 6 months as school fees payment (depending upon chosen option)

Premium range

(min, max)

 From XOF 5,000 to 92,000 (~ USD 10 – 195) per year

 An additional XOF 1,000 (~ USD 2) one time subscription fee is charged

 XOF 22,000 (~ USD 45)

Other comments  None

A. Product Specifications

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8. Ivory Coast: Funeral Insurance

Product:

Assurance

Obséques

Ranking



Fully applied

market



Ivory Coast, after 10 years of civil war and a political crisis in 2011, is more still very much a developing country

C



The customers of the MFI distribution partners are low-medium segment, with at least 80% of the insured belonging to the 60% of population with the lowest incomes

more than 50%



Premiums are not subsidized

+ +

Funerals are a significant expense in Ivory Coast, and the product significantly contributes to covering these. Family and parents can be covered as well at very competitive pricing. The possibility to add an education rider gives further options to customize the product to customer needs.

2

-

No tangible other benefits. But with some MFIs the insured has the option that part of the payout is paid to the

undertaker to ensure a proper funeral, no matter what

-

No customer studies

4

-

)

++

100% voluntary

+

Simple language brochures are provided. Some MFIs also give Allianz contact details on their brochures. No service hotline and systematic collection of customer feedback.

6

++

Simple base product, with simple add-on options (e.g. _{education rider), no medical selection}

++

The MFIs takes charge of distribution, subscription, data and premiums collection, and parts of the claims process. This significantly lowers costs

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B. Product Assessment

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8. Ivory Coast: Funeral Insurance

C. Product Brochure – MFI1

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8. Ivory Coast: Funeral Insurance

C. Product Brochure – MFI2

>> back to Overview

Front

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9. Indonesia: Scratch-Card Personal Accident

Product name

• Kartu ProteksiKU (“My Protection Card”)

Product type

• Personal Accident

Company name • Allianz General Indonesia

Country • Indonesia

• MFIs (Micro Finance Institutions)

Launch date

• 2011 (for microinsurance channel: 1-Oct-2012)

1-sentence product description • Personal Accident insurance in form of credit-card sized pre-paid voucher; instant activation and coverage confirmation via SMS

Group or individual product • Individual

• Voluntary opt-in

• Death caused by accident: IDR 25mn (~ USD 2,750)

• Total permanent disability caused by accident: maximum IDR 25mn (~ USD 2,750) depending on degree of physical disability

Premium range

(min, max)

• All vouchers cost IDR 27,500 (~ USD 3.0) and are valid for one year

• IDR 27,500 per year (~ USD 3.00)

Other comments • The product is also sold through other channels, e.g. tied agents. However, this assessment focuses only on the microinsurance segment, i.e. distribution through MFIs. Business figures are only reported from this channel.

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9. Indonesia: Scratch-Card Personal Accident

Product:

Kartu Proteksiku

Ranking2 Rationale / Comments



Fully applied

market



Indonesia is an emerging market according to S&P and a developing country according to World Bank

C



Product is distributed through MFIs that focus on low-income customers. As the product is voluntary, some insured may actually be better off, but the majority can still be considered low-income in the Indonesian context.

more than 50%



-

Personal Accident sold to the general public, i.e. not to a special high risk group (e.g. construction workers), does not contribute significantly to risk management of low-income people as the likelihood of a claim is very low

2

+

The exceptionally high payout-to-premium ratio of 920/1 (USD 2,750 coverage for 3.00 premium) qualifies as a “tangible other benefit”.

3 End-customers involved in product development

-

)

++

Fully voluntary

++

Customer receives full policy wording as booklet and a handy insurance card to be put in wallet, including Allianz service number and address.

6

++

Simple product format (voucher), automatic acceptance via SMS with no exclusions except age limit. Booklet with full policy wording is a bit lengthy.

+

SMS activation and single premium payment minimize distribution and collection costs. Claim settlement is traditional. No integrated IT system.

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B. Product Assessment

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9. Indonesia: Scratch-Card Personal Accident

C. Policy Document

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9. Indonesia: Scratch-Card Personal Accident

C. Policy Document

Insurance card (front)

>> back to Overview

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10. India: Crop Index

Product name

 Weather Protect

Product type

 Index Insurance

Company name  BajajAllianz General Insurance Co. Ltd.

Country  India

 Banks

Launch date

 March 2014

1-sentence product description  This insurance is subsidized by the public Indian WBCIS scheme (Weather-Based Crop Insurance Scheme) and covers loan-taking smallholder farmers against adverse weather conditions through weather related index insurance. The more adverse the index, e.g. below-average rainfall, the higher the likely losses for the farmer and the higher the insurance payout. up to a maximum sum insured

Group or individual product  Individual

 Compulsory (tied to agricultural loans)

 Cover: Adverse behavior of a weather index (as a proxy for actual losses) with payouts starting from a pre-defined trigger point (strike) and proceeding in notional steps until a pre-defined exit point, at which the maximum sum insured would be paid

 Several weather indices can be used, e.g. rainfall (excess, deficit, dry spells), temperature (high/low), humidity, wind speed or any other measurable weather parameter

 The trigger, exit and sum insured depend on the location, season, crop, claim experience and business potential

 Sum insured is equal to the loan amount

 Avg. loan size is INR 15,000 – 30,000 (~ USD 235 – 470) for food crops and INR 20,000 – 100,000 (~ USD 300 – 1,500) for cash crops

Premium range

(min, max)

 Per hectare: INR 250 to 1,000 (~ USD 4 – 16)

 Per loan: 5-12% of loan for rainy season crop and 4-8% for winter season crop

 Around INR 1,700(~ USD 25) per loan for food crops and INR 5,000 (~ USD 80) per loan for cash crops

 Annualization is not applicable because coverage only runs 3.5 months

Other comments  This product carries public premium subsidies in the range of 30% – 75% under the WBCIS scheme

 This assessment only relates to the portion of the portfolio where subsidies do not exceed 50%

 If subsidies exceed 50%, Allianz Group’s

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10. India: Crop Index

Product:

Crop Index

Ranking2 Rationale / Comments



Fully applied

market



India is an emerging market according to S&P and a developing country according to World Bank

C



The government’s weather index scheme, under which this products is brought to market, specifically targets low-income smallholder farmers.

more than 50%



Up to 50 percent subsidized by the Indian public authorities. Where subsidies exceed 50 percent, such business is excluded from reporting.

++

Weather represents the single major source of risk for rain-fed farming in India. The product significantly contributes to mitigate such risks (e.g. draught) and allows farmers continued access to agricultural credits.

2

-

None.

+

End customers are not directly involved but the Government involves representatives from the district authorities in finalizing the Index and negotiates with the insurance company to make the triggers farmer friendly.

4

-

)

-

Mostly compulsory because tied to agricultural loans. A small number of non-loaning smallholder farmers also take the subsidized insurance on a voluntary basis.

++

Each farmer receives a cover note with a BajajAllianz contact number on it. Moreover, BajajAllianz General puts a lot of effort into creating product awareness (farmer meetings, van campaign, marketing collaterals etc.)

6

+

Only few exclusions apply, but the product details are still complex, especially the definition and measurement of the trigger and exit points. It is difficult for farmers to accurately predict their claim payouts, but the close involvement of banks helps to explain and process claim payouts.

+

Enrollment data requirements are numerous and time consuming, but banks do help with enrollment since they already have most data at hand. Due to the index-based claim mechanism, farmers do not need to file claims. Claims are triggered automatically if the index strikes.

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10. India: Crop Index

C. Product Brochure

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11. Malaysia: Motorcycle + PA

Product name

 Motorcycle & Personal Acccident

Product type

 Motorcycle & Personal Accident

Company name  Allianz General Malaysia

Country  Malaysia

 Postal Service

Launch date

 1 July 2011

1-sentence product description  Motorcycle coverage for third-party liability and (optional) loss and damage to due to accident + Personal Accident as semi-bundled extra offer

Group or individual product  Individual

 Motorcycle loss & damage: maximum current market value of motorcycle

 PA: Death due to accident: MYR 5,000 (~ USD 1,600)

 PA: Total permanent diability or dismemberment: MYR 5,000 (~ USD 1,600)

 PA: Bereavement benefit: MYR 500 (~ USD 160)

Premium range

(min, max)

 for Motorcylce: n.a.; for PA: MYR 15 (~ USD 5) per year

 For Motorcycle: MYR 100 (~ USD 33)

 For PA: MYR 15 (~ USD 5)

Other comments  Motorcycle premiums vary per brand and engine volume

 Product is also marketed by tied agents at different premiums (excluded here)

 Third-party liability cover is a statutory requirement for motorcycles in Malaysia. Additional motorcycle cover and personal accident cover are voluntary

A. Product Specifications