MICROINSURANCE AS A NATURAL DISASTER MANAGEMENT TOOL · 03.03.2016 · Michael J. McCord President...

of 31 /31
Expert Forum: Microinsurance in Africa Module 1: Microinsurance in Africa and Product Evolution Welcome! We will begin shortly

Embed Size (px)

Transcript of MICROINSURANCE AS A NATURAL DISASTER MANAGEMENT TOOL · 03.03.2016 · Michael J. McCord President...

  • Expert Forum: Microinsurance in Africa

    Module 1: Microinsurance in Africa and Product Evolution

    Welcome!We will begin shortly

  • To ensure the highest quality of experience, all participants will be muted

    Housekeeping Items

    Today’s Expert Forum is scheduled to last 1 hour including Q&A

    QUESTIONS can be submitted via the “Chat” feature

    OR “Raise Hand” icon to speak Lower Hand and mute after Slides and a recording of this presentation

    will be circulated after we conclude Message the organizers for any issues Don’t forget to fill out the survey that appears

    automatically after the Forum

  • Unleashing the full potential of Africa’s financial sector

    David AshiagborCoordinator

    MFW4A

    G8 INITIATIVE

    To be the reference financial sector development knowledge hub on Africa

    To provide a vibrant financial sector development networking platform on Africa

    To be a key voice on financial sector development in Africa

    STRATEGIC GOALS

    Launched in October 2007

    AfDB hosts the Secretariat since September 2008

    www.mfw4a.org

    http://www.mfw4a.org/

  • MICROINSURANCE NETWORKThe global platform for insurance in emerging markets

    Connect. Participate. Influence

    > 80

    INSTITUTIONS

    300

    EXPERTS> 30

    COUNTRIES

    Highlight the role of insurance for development

    Advocate for fair and proportionate regulation

    Promote the microinsurance business case

    Engage the insurance industry

  • Expert Forums

    New initiative of the Microinsurance Network Interactive discussion between microinsurance

    experts on key emerging topicsWe want to hear from you!

    Be sure to register for upcoming Expert Forum Series Modules: Module 2 | 24th March, 13:00 GMT Module 3 | 14th April, 13:00 GMT

  • Expert Forum: Microinsurance in Africa

    Module 1: Microinsurance in Africa and Product Evolution

    Michael J. McCordPresident

    MicroInsurance Centre

  • THE LANDSCAPE OF MICROINSURANCE IN AFRICA

    World Map of Microinsurance

    Expert Forum3 March 2016

    Michael J. McCordMicroInsurance Centre, LLC

  • www.microinsurancenetwork.org ‹#›www.microinsurancenetwork.org www.microinsurancenetwork.org

    Definition of Microinsurance

    Developed specifically for low-income people

    Risk carrier: managed based on insurance principles – govt cannot be sole risk carrier

    Affordability – modest premium levels

  • www.microinsurancenetwork.org

    Methodology

  • www.microinsurancenetwork.org

    Key Figures

    Over 200 providers reported microinsurance activities from 36 countries in the African region

    20142011

    Identified lives covered

    44.4 M(4.4%)

    61.8 M(5.4%)

    Premiums(2014 USD)

    756M387M

    29%Overall comparable

    increase in lives

    covered for the 3-

    year period (2011 –

    2014)

    63%Comparable growth

    in premiums

  • www.microinsurancenetwork.org

    LAC: 2013Asia: 2012 Africa: 2014

    828 M829 M 756 MGross

    written

    premiums

    (USD)

    48.6 M7.9%

    170.4 M4.3%

    61.8 M

    5.4%Lives

    covered

    Premiums

    281M

    2.3B

    4.9%

    Avg.

    premium /

    life (USD)

    11.3

    0.6

    6.6 5.3

    12.8

    19.3 18.1

    6.2

    17.9

    30.7

    Life PA Health Property Agri

    Africa: Avg premium / life (USD)2011

    2014

  • www.microinsurancenetwork.org

    Microinsurance coverage ratios by country

  • www.microinsurancenetwork.org

    Insureds Identified in 2005, 2008, 2011, and 2014

    3.56.4

    17.2

    27.2

    14.7

    44.4

    61.8

    2005 2008 2011 2014

    Microinsurance total outreach in Africa(identified lives covered, millions)

    Total (excluding South Africa)

    Total (with South Africa)

  • PRODUCT EVOLUTION

  • www.microinsurancenetwork.org

    Q: Is product evolution a deliberate part of your microinsurance

    strategy?

    Select your answer:A. YesB. No

    C. Not applicable

  • www.microinsurancenetwork.org

    Basic life and credit life

    Better benefits and features

    Expanding product types

    Business case and value

    Through new distribution channels

    Through new tech solutions

    Product Evolution

  • www.microinsurancenetwork.org

    Flux of providers

    Flux of products

    96 X46

    Flux of providers

    Churning of products / providers in the market

  • www.microinsurancenetwork.org

    Product evolution

    More voluntary products 58% in 2014 vs. 36% in 2011

    More health / property Of the almost 100 products reported as launched since 2011, only 1 was purely a credit life product

    Some characteristics indicating a move towards more valuable / complex products:

    More bundled products (more than one type of coverage) 45% in 2014 vs. 30% in 2011

  • www.microinsurancenetwork.org

    Expansion of product types

    Figure represents comparable data only (companies reporting for both 2011 and 2014 and new market entrants)

    8.6

    33.2

    2.1

    1.3

    0.8

    0.1

    16.2

    41.6

    12.1

    8.1

    3.2

    0.5

    Credit Life

    Life (non-credit)

    PA

    Health

    Property (non-ag)

    Ag

    Growth by type of products(millions of lives covered)

    2014

    2011

    522%

    487%

    25%

    88%

  • www.microinsurancenetwork.org

    Growth – outreach and products

    40%

    Since 2011% of products offering some form of health coverage

    29%

    2011 and prior

    % of products offering some form of property coverage

    22%

    Since 2011

    11%

    2011 and prior

  • www.microinsurancenetwork.org

    What do you think?

  • www.microinsurancenetwork.org

    Q: What is the top factor that enables product evolution?

    Select your answer:A. Understanding of client needsB. Market competitionC. Regulatory incentivesD. Innovative distribution channelsE. A clear business caseF. Capacity building for insurance providers

  • EVOLUTION AT THE COUNTRY LEVEL

  • www.microinsurancenetwork.org

    2011Nigeria

    0.7%

    2014Nigeria

    1.0%

    2011Zambia

    0.9%

    2014Zambia22.2%

    0

    2

    4

    6

    8

    10

    12

    0 2 4 6 8

    # providers

    # product types

    Coverage ratios – 2011 to 2014Nigeria

    Zambia 2011: Zambia and Nigeria

    • Virtually identical coverage ratio and number of providers

    2014:

    • Zambia has a higher coverage ratio

    • Nigeria has more providers, offering a diverse range of products

    Observations from the landscape

    • Nigeria is one or two years behind Zambia in terms of when insurers launched products

    • Distribution constraints in Nigeria

    • Automatic vs. voluntary

  • www.microinsurancenetwork.org

    2011: Ghana and Tanzania

    • Similar coverage ratios

    • Ghana has twice the providers and products

    2011Tanzania

    7.3%

    2014Tanzania

    3.9%

    2011Ghana7.0%

    2014Ghana29.0%

    0

    2

    4

    6

    8

    10

    12

    14

    16

    18

    0 2 4 6 8

    # providers

    # product types

    Coverage ratios – 2011 to 2014Tanzania

    Ghana

    2014: Ghana has exploded, and Tanzania has declined…

    Observations from the landscape

    • One large provider dominated Tanzania’s landscape

    • Product diversity in Ghana has helped in provider evolution

  • www.microinsurancenetwork.org

    2011: Namibia and Zimbabwe

    • Both high coverage ratios

    • Both largely dominated by one provider / product

    2014:

    • Both dramatic declines in coverage

    • Yet both increased market participation by insurers2011

    Zimbabwe11.0%

    2014Zimbabwe

    1.1%

    2011Namibia

    55.9%

    2014Namibia

    14.8%

    0

    1

    2

    3

    4

    5

    6

    0 1 2 3 4 5 6

    # providers

    # product types

    Coverage ratios 2011 - 2014ZimbabweNamibia

  • DISCUSSION

  • www.microinsurancenetwork.org

    Q: What difficulties have you experienced in implementing

    microinsurance product evolution, and how did you overcome them?

  • www.microinsurancenetwork.org/world-map-microinsurance

  • HOW TO JOIN

    Contact:[email protected]

    Or apply online at: www.microinsurancenetwork.org/member

    BECOME A MEMBER

    • Gain access to peers and influence best practices

    • Share your expertise and get insights from experts

    • Receive invitations to exclusive events

    • Stay informed on the latest microinsurancenews

    • Shape our agenda and participate indecision-making

    Connect. Participate. Influence

    mailto:[email protected]

  • Expert Forum: Microinsurance in Africa

    Module 1: Microinsurance in Africa and Product Evolution

    Thank You!

    Making Finance Work for AfricaImmeuble CCIA, Rue Jean Paul IIAbidjan, Côte d’IvoireTel: +255 [email protected]

    www.mfw4a.org

    Microinsurance Network39 Rue Glesener1631 LuxembourgTel: +352 [email protected]

    www.microinsurancenetwork.org