Microinsurance
Matters
Issue No.
16
MicroEnsure Secures
New Investors and
Major Joint Venture
with Telenor Group
3
Clinical Lessons from
Over the last few years MicroEnsure has been at the forefront of bringing insurance to the mass market via the mobile phone and we are delighted to launch a new joint venture with the Telenor Group. This is called “MicroEnsure Asia” and will initially target Telenor’s business units in Asia. It seeks to bring insurance to many of Telenor’s 149 million subscribers but we will also be looking to work with other telco’s and mass-market distributors over time.
Official Press Release: Opportunity
International Courts New Strategic Investors for MicroEnsure
Positioning its award-winning micro-insurance company for future growth, Opportunity International has announced it has divested its majority stake in MicroEnsure to provide the capital and relationships necessary to aggressively scale its successful model to serve more families in need.
MicroEnsure, a leading provider of a range of insurance products to over four million people in Africa and Asia, was founded in 2008 as a subsidiary of Opportunity International. MicroEnsure helps to end the cycle of poverty by providing risk protection for low-income families who traditionally face high financial risk with little access to insurance.
Founding investor Opportunity International US has significantly decreased its ownership of MicroEnsure in a strategic move to bring additional capital and relationships required
MicroEnsure Secures New Investors and Major Joint
Venture with Telenor Group
January 15
thmarked the start of a new chapter in the continued development of MicroEnsure as we
welcomed new investors and launched a joint venture with Telenor Group. With the continued growth of
MicroEnsure, now serving over four million active clients, Opportunity International graciously agreed
that the time is right to bring new investors into the group. We are pleased to welcome IFC, Omidyar and
members of the MicroEnsure team alongside Opportunity and believe that these investors will bring the
funding and strategic relationships necessary to continue our growth.
to scale the successful MicroEnsure business with continued rapid growth to serve more clients in need. New investors include IFC (International Finance Corporation), Omidyar Network and select members of the MicroEnsure management team. Opportunity International US will maintain a minority shareholding in the newly formed MicroEnsure Holdings Limited, a UK-based company.
In the past five years, MicroEnsure has grown rapidly thanks in part to generous funding from the Bill & Melinda Gates Foundation. The company was also recognized with the Financial Times Sustainable Finance Award in 2009 and 2011. “While we are proud to have launched such an impactful organization, we are more proud to further infuse MicroEnsure with valuable resources and then step aside so the company can grow fast and serve exponentially more families in need,” said Vicki Escarra, CEO of Opportunity International US.
Richard Leftley CEO of MicroEnsure echoed, “MicroEnsure is excited to have Omidyar Network and IFC join us as shareholders and the Telenor Group as a joint venture partner. With access to the right capital and
customer base that these partners bring, we are looking forward to serving many millions of low and middle income clients globally.” “Omidyar Network is excited to support the MicroEnsure management team, as it makes the important transition from a non-profit entity to a sustainable, commercially-funded venture,” announced Arjuna Costa, director of investments at Omidyar Network. “This welcome evolution will enable millions of consumers throughout Asia and sub-Saharan Africa to access quality, affordable insurance products, including life and health insurance, thereby providing them and their families a critical safety net over the long-term.”
Official Press Release: Telenor and MicroEnsure Bring Insurance to the Masses in Asia
Telenor has entered into a new joint venture with MicroEnsure, a leading provider of insurance products to more than four million people in Africa and Asia, to form “MicroEnsure Asia”.
MicroEnsure Asia has been established as a joint venture between Telenor Group and the UK based MicroEnsure Holdings
Limited. MicroEnsure Asia will initially focus on introducing a range of insurance products to Telenor’s business units in Asia as well as seeking to work with other mobile network operators and distribution partners in Asia and Eastern Europe.
Studies show that less than 5% of the population in many Asian countries currently have any insurance, yet the low and middle income market face significant risks on a daily basis. By combining simplified products and rapid claims payment with the convenience of transacting over the mobile phone, MicroEnsure has rapidly reached millions of subscribers in Asia and Africa.
“Our joint venture with MicroEnsure opens up an exciting new area for Telenor to develop, and gives access to insurance coverage for a whole new customer segment. MicroEnsure is a good match for Telenor. Their range of products reaches more than four million customers in Africa and Asia, and they have broad experience in low cost operations,” said Abraham Foss, Head of Financial Services in Telenor. Financial Services is organized as a business division within Telenor Digital Services.
MicroEnsure was established in 2008 as a subsidiary of Opportunity International, a non-profit microfinance organisation that provides financial products and services for those living in poverty in the developing world.
MicroEnsure CEO, Richard Leftley
commented, “Telenor is an exciting strategic partner for us given their strong footprint in especially the Asian region. There is significant interest from most mobile network operators to provide financial services and specifically insurance. This will enable MicroEnsure to continue its significant growth.” Since 2008, MicroEnsure has expanded to provide insurance products to over four million active client across Africa, Asia and the Caribbean.
About International Finance Corporation (IFC)
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit www.ifc.org.
About Omidyar Network
Omidyar Network is a philanthropic investment firm dedicated to harnessing the power of markets to create opportunity for people to improve their lives. Established in 2004 by eBay founder Pierre Omidyar and his wife Pam, the organization invests in and helps scale innovative organizations to catalyze economic and social change. To date, Omidyar Network has committed more than $597 million to for-profit companies and non-profit organizations that foster economic advancement and encourage individual participation across multiple initiatives, including entrepreneurship, financial inclusion, property rights, government transparency, consumer Internet and mobile. To learn more, visit www.omidyar.com.
About Telenor Group
Telenor Group is an international provider of tele, data and media communication services. Telenor Group has mobile operations in 11 markets in the Nordic region, Central and Eastern Europe and in Asia, as well as a voting stake of 42.95 per cent (economic stake 35.7 per cent) in VimpelCom Ltd., operating in 18 markets. Headquartered in Norway, Telenor Group is one of the world’s major mobile operators with 149 million mobile subscriptions in its consolidated operations per Q3 2012, revenues in 2011 of NOK 99 billion, and a workforce of approximately 30,000. For more information about Telenor Group, please visit www.telenor.com
About Opportunity International
Opportunity International provides access to savings, small business loans, insurance and training to over five million people working their way out of poverty in the developing world. Clients in over 20 countries use these financial services to start or expand a business, provide for their families, create jobs for their neighbors and build a safety net for the future. For more information, visit http://www.opportunity.org or join the conversation at http://facebook.com/opportunityintl and http://twitter.com/opportunityintl.
“Typhoid!”
At the end of December 2011 we compiled a summary of encounter data for the last six months for each facility in our network. To our surprise, in one dispensary there were 88 records containing the diagnosis “Typhoid”. Needless to say, this set alarms ringing and I went up the mountain to try and find out what was going on.
When I reached the facility I met with the clinician concerned and starting reviewing the files to see if there was a simmering epidemic. I started reviewing the first patient file and, to my surprise, I found that the diagnosis was based on a sliding method test; this is a blood serums test which identifies antigen/antibody reaction in the blood. This test determines the presence of infection in the body and is non-specific, so gives no indication of what the infection is. Most particularly, it does not confirm the presence of Typhoid. This test also falls outside
the ministry of health guidelines. Nevertheless, in all cases the treatment prescribed was Ciprofloxacin or Chloramphenicol, both of which are expensive antibiotics used to treat Typhoid. As I reviewed file after file I realised that this was no lingering epidemic at all, but a consistent pattern of clinical error. The presenting symptoms were:
• Diarrhoea • Abdominal pain • General malaise • Fever
In this setting Typhoid is a rare disease and clinicians should be rather circumspect when making this diagnosis. The correct process is not a sliding method test for antigen/antibody reaction test, but to try and identify the more obvious suspects as follows (abridged):
Clinical Lessons from the Mountain
MicroEnsure is the main executing partner for an exciting primary health programme serving coffee
farmers on Mount Kilimanjaro. The project was initiated by PharmAccess Foundation of the Netherlands in
partnership with KNCU, the umbrella co-operative for coffee farmers in the Kilimanjaro region.
The project involves upgrading provider facilities, mobilising the community to participate in a community health fund, contracting and managing the provider network and a continuous process of clinical quality control.
Tanzania has an excellent set of clinical protocols captured in a guide called “Standard Treatment Guidelines (STG) and the National Essential Medicines List (NEMLIT) for Mainland Tanzania”. MicroEnsure receives a record of each clinical encounter and monitors whether the treatment path follows the STG. When a provider is first introduced into our network we often discover numerous diagnostic errors and that deviation from the guidelines is the norm rather than the exception.
Our clinical team then sets about mentoring and training clinicians to improve their diagnostic skills and to comply with the STG’s. Accuracy of diagnosis and compliance improves significantly and very quickly. Wastage of drugs and over-prescription of antibiotics also reduces dramatically. This series tells the story of the lessons that are being learned.
Step Investigation Treatment
(Normal first line with exceptions for specific cases such as pregnancy or infants)
Notes
1 Test for malaria - microscopy of blood
slide to identify presence of parasites. Artemether Lumefantrine (ALu)
Steps 1, 2, 3 and 4 are all mandatory.
Frequently more than one of these investigations will be positive and treatment may need to be adjusted accordingly
2 Test for UTI - microscopy of urine sediment slide Co-trimoxazole or Amoxicillin
3
Enquire about symptoms of chest infection, if present, conduct chest examination
If secondary infection identified, Amoxicillin (if co-morbidity with bacterial diarrhoea, Co-trimoxazole)
4 Test for stool infection - microscopy of stool slide
• Protozoa present - Metronidazole • Ova present - appropriate Anthelmintic • Bacteria present - Co-trimoxazole • Negative (viral) - treat symptomatically 5
If diarrhoea persists after five days of treatment following a bacteria-positive stool slide, ask patient whether diarrhoea is interrupted by episodes of constipation, which may suggest typhoid, if not, go back to step one and repeat process, if bacteria in stool is confirmed, refer patient to a facility with advanced laboratory facilities, where:
6 Test for Typhoid and C/S
Test blood sample with Typhoid titration and stool sample for culture and sensitivity , treat patient symptomatically
7 Identify bacteria
• Not Typhoid, treat appropriately, as per C/S results
• Typhoid - Ciprofloxacin or Chloromphenicol
Results
So what had happened is that the clinicians had leaped from the sliding method test (the wrong diagnosis procedure) all the way to step seven, skipping everything in between! We retrained the clinicians and the laboratory assistants on the proper procedures. The error in diagnosing Typhoid has not re-occurred since.
About the KNCU Health Plan
Created to meet the demand for affordable primary healthcare, the KNCU Health Plan was developed in partnership with the PharmAccess Foundation (PharmAccess), the Kilimanjaro Native Cooperative Union (KNCU) and the Mission for Essential Medical Supplies (MEMS) to serve those living in the Kilimanjaro area of northern Tanzania.
The KNCU Health Plan provides complete outpatient care on a capitated basis and full-service maternity care based on a traditional insurance model. In addition, the plan provides chronic condition care and medicine, including specialist visits for eligible members. Over 50’s also benefit from an annual check-up.
MicroEnsure’s provider team is led by previously practicing clinicians and leaders in the healthcare space. They are bolstered by MicroEnsure’s AMARA Health System. Together, they deliver the following services:
• Member sales, enrolment and administration - Penetration rates are typically between 35% and 55% per community. • Provider negotiation and management - MicroEnsure negotiates provider agreements and provides a two day training
course for new providers.
• Customer care - Members are provided a toll free hotline to call to discuss any questions they may have regarding the plan.
• Reporting – Comprehensive reporting across policy administration, pre-authorisations, membership utilisation, provider health, customer care and financials to meet the requirements of insurance companies, reinsurers, clients and providers.
MicroEnsure’s Savings-Linked Insurance product encourages clients to save more with banks and MFIs by rewarding them with free life insurance. The amount of life insurance cover is linked to the client’s savings for the three-month period prior to a claim event. Mary Nkenshen, Joseph’s widow sells Waakye, a popular Ghanaian food dish made from rice and beans.
The Nkenshen’s Story
Product Details: Women’s World Banking Group Savings Insurance
• Provides life insurance for savings clients / depositors and their family
• Depositor is eligible for life insurance when his/her account contains at least GHS 100 (≈ US$ 52) • Family (spouse and up to three children) are eligible for life insurance when account contains at least
GHS 200 (≈ US$ 105)
• These minimum balances must be maintained on a monthly basis to retain insurance cover • Claims are calculated using the previous three months balances before the claim event
When Joseph Nkenshen, a client of Women’s World Banking Ghana (WWBG) Savings and Loans Company
Limited, died in April 2012 his family were able to benefit from MicroEnsure’s Savings-Linked
Insurance product.
Over recent years MicroEnsure Tanzania has experienced unprecedented progress across a range of insurance businesses, including health, weather index, mobile and bank-distributed insurance. In January 2013 MicroEnsure Tanzania passed one million lives served.
In February Ryan Lynch left MicroEnsure to move back to the USA with his family, opening up the position of Country Manager in Tanzania. Following an extensive recruitment campaign we are pleased to announce the appointment of Urasa Sarakikya as our new Country Manager in Tanzania.
Urasa comes to MicroEnsure with nearly a decade of banking experience in Tanzania at Stanbic Bank. He brings a unique blend of leadership experience, channel and market expertise, as well as business acumen to the team. At Stanbic, Urasa led teams in both the corporate banking division and retail division, managed their SME department and was charged with building their agriculture finance department.
Urasa graduated from United States International University (Kenya) and completed his MBA at Leeds Metropolitan University (UK).
Urasa Sarakikya Appointed Country
Manager for MicroEnsure Tanzania
We are pleased to announce the appointment of Urasa Sarakikya as our
new Country Manager in Tanzania. His role will focus on leading the next
stage of growth and development for MicroEnsure in Tanzania.
MicroEnsure
Featured On IFC
Homepage
Following its recent investment in MicroEnsure, IFC has featured the role of MicroEnsure in providing a private sector safety net on its homepage.
In addition, IFC has created a new video that shows the work of MicroEnsure. To find out more visit www.ifc.org
As Joseph had saved GHS 218 (≈ US$ 114), Mary received a payment of GHS 626 (≈ US$ 329). “I didn’t believe in insurance” explains Mary. “The children’s school fees had been a headache for me until the bank informed me of my entitlement as Joseph had no investments.” Having submitted the relevant documents, Mary received her cheque just three days later which she was able to use to help pay her children’s school fees.
Part One summarizes the major outputs of the ILO’s Microinsurance Innovation Facility in 2012 and introduces the Facility’s initial thoughts on its plans after 2013;
Part Two describes
microinsurance development and the experiences of its partners in Africa, Asia and the Pacific, India and Latin America and the Caribbean;
Part Three presents lessons that were generated by the Facility’s partners in 2012.
The Annexes list the Facility’s innovation grantees and strategic partners (Annex I), knowledge products (Annex II) and capacity-building activities (Annex III).
You can download the report at: http://bit.ly/VziEic
MicroEnsure Philippines Launches Triple 10 Cover
MicroEnsure Philippines have partnered with Bankers Assurance Corporation and MI Central Corporation
to provide ‘Triple 10’, a retail insurance product that provides life insurance, burial assistance, medical
reimbursement, and fire & calamity assistance.
Triple 10 costs just 250 pesos
(≈ US$ 6) for one year and provides life insurance, burial assistance, medical reimbursement, and fire & calamity assurance, of 10,000 pesos each (≈ US$ 245).
Customers are able to extend their coverage by adding additional family members and medical reimbursement cover to the policy. Benefits can also be increased by purchasing additional ‘units’ to the base policy.
MicroEnsure have partnered with MI Central Corporation (MICC), an Iloio-based organisation that performs the
marketing and distribution function for Triple 10. MICC’s microinsurance agents act as microinsurance advocates in the community and distribute the product to businesses, local cooperatives and associations, as well as direct selling to individuals.
“Triple 10 represents an exciting new venture for MicroEnsure Philippines” said William Martirez, Country Manager of MicroEnsure Philippines. “By providing a retail-based microinsurance product, we aim to provide a safety net to thousands of people who were previously unable to access formal insurance.”
MicroEnsure Wins
Kalahari MobileMoney
Award
MicroEnsure has won the Kalahari
MobileMoney Award for Best Use of
Mobile Money in Insurance.
The awards, held in February as part of the MobileMoney Expo in Lagos, Nigeria were hotly contested with some categories having more than 15 entries across six countries.
MicroEnsure was recognised for its unique approach to mobile money. Through its
partnerships with Tigo (in Ghana and Tanzania), MTN (in Ghana) and Yu (in Kenya), MicroEnsure now delivers mobile-based insurance products to approximately 1.5 million people.
By defining mobile money along a spectrum of payment methods ranging from cost-free transactions to indirect payments, to airtime value deductions for premium payments, and the use of mobile money wallets for claims payments, MicroEnsure and its partners have been able to deliver an innovative user experience that not only helps the mass market hedge against life’s risks, but also builds brand affinity and provides proof-of-concept services to educate the masses on the utility of the mobile platform for financial transactions.
7
PART 1. IN PURSUIT OF QUALITY AT SCALE
ANNUAL REPORT 2012
CONTENT
S
Since we intend to reach out to a diverse target group that has varied learning preferences, various approaches to knowledge management are required, combined with regular feedback, monitoring and modification to maximize effectiveness. A key element of active dissemination is personal engagement, supported by virtual events for partners, collaborators and stakeholders. We will therefore expand peer-learning activities to facilitate knowledge exchange (see Box 3). We also intend to support other communities of practice among practitioners, training institutes and consultants.
Box 3 PRACTITIONER LEARNING GROUP: SHARING KNOWLEDGE TO IMPROVE CLIENT VALUE
Collaboration for knowledge sharing is difficult in a day-to-day business environment. To address this issue, the Facility created a practitioner learning group (PLG) with member organizations from 12 countries, represented by 46 people interested in promoting better client value. Members keep in touch through an online space hosted on our website and quarterly webinars focusing on one organization’s work to improve client value. Building on these virtual exchanges, Facility partner Old Mutual hosted a peer exchange in South Africa in August 2012, bringing together 16 PLG members and its own staff. After a one-day training on the Facility’s client value assessment tool, PACE - Product, Access, Cost, Experience (see Box 13), the group evaluated the client value proposition of Old Mutual’s two main microinsurance products. The PLG, and especially the experience of peer exchange, showed that assembling practitioners in one place to find solutions together could quickly yield results. The peer exchange is a powerful capacity-building tool because learning takes place in real time among practitioners facing similar issues.
Peer exchange hosted by Old Mutual in South Africa
© F aci lit y © Ol d M ut ua l PRO TECTING THE WORKING POOR ANNUAL REPORT2012 MICROINSURANCE INNOVATION FACILITY
The Microinsurance Innovation
Facility Releases its 2012
Annual Report
The Microinsurance Innovation Facility has released its 2012
Annual Report. This 2012 Annual Report is organized into
three parts:
Since its launch, MicroEnsure has sold 5,214 policies and paid out PHP 262,500 (≈ US$ 6,450) in claims. Triple 10 is covered by Bankers Assurance Corporation (BAC), a non-life insurance company dedicated to microinsurance, a subsidiary of the Malayan Group of Insurance Companies.
In January we were pleased to announce that we had welcomed IFC, Omidyar and members of management alongside Opportunity International as investors for the MicroEnsure Group and we were also pleased to announce a major new joint venture with Telenor that will seek to serve Telenor’s mobile phone clients in Asia. I know from personal experience the depths to which these new investors went to look at the MicroEnsure model and, as a result, I take it as a significant vote of confidence in the model that they choose to invest.
We could stop there and say, “Its commercially viable because investors say so” but that would not satisfy many! So let’s dig a little deeper. I think we have learnt in the last five years that it would take around seven million people to be insured in order for us to break even on commissions alone. Which is why over the last few years we have expanded the model to include revenues from underwriting, claims administration and some consultancy, especially in relation to agriculture products. Increasingly I see MicroEnsure as a microinsurance specialist that happens to have chosen the legal form of an insurance intermediary. We are a broker because it is cheaper and quicker than being an insurance company, not because being a broker is necessarily essential to our model.
In fact, if you look at the companies that are actually executing microinsurance at scale, you will see that whether they started out as an insurance company or a broker, it is necessary to be involved in the whole value chain from sales through servicing to underwriting and claims control. If you want to succeed you have to go beyond the traditional boundaries of ‘underwriter’ or ‘broker’ and get your hands onto the levers in order to provide an end-to-end solution. That is necessary to ensure claims are paid quickly but also because the revenue stream from being only a broker or only an underwriter is not really viable - you need revenue from as many sources as possible because the margins are just so thin. If the underwriting capacity of traditional insurance companies was all that is needed to provide microinsurance at scale, then the market penetration rate would be a lot higher than the current two percent. I think that this morphing of the traditional roles is something we will continue to see as the market develops, watch this space!
Five years ago, when we started to scale up MicroEnsure, one of our core aims was to determine whether
a microinsurance intermediary could be commercially viable. Of course we wanted to reach lots of people
and innovate with new products and distribution approaches but we knew that we had to be viable in order
to survive after the Gates Foundation grant finished at the end of 2012.
Is Microinsurance Commercially Viable?
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CEO Richard Leftley t: +44 1242 526 836 e: [email protected]
COO / India Martin Fuller t: +44 1242 526 836 e: [email protected] Ghana Adjoa Boateng t: +233 262 392 484 e: [email protected] Kenya Kate Waiganjo t: +254 710 602 547 e: [email protected] Philippines William Martirez t: +63 33 329 0729 e: [email protected] Tanzania Urasa Sarakikya t: +255 22 213 6001 e: [email protected]
Agriculture Ulrich Hess t: +49 172 560 8036 e: [email protected] Health Will de Klerk t: +44 1242 526 836 e: [email protected] Mobile Africa Peter Gross t: +254 701 499 104 e: [email protected]
