Microinsurance Databank: Catalyzing growth through a live market dashboard

Rupalee Ruchismita Executive Director

Centre for Insurance and Risk Management (CIRM)

6th International Microinsurance Conference Manila

9-11 November

Agenda

Why: Motivation for the Databank

What is Microinsurance Map (MiM)?

Putting It All Together

Analysis: The Story in the Data

Going forward

Benefits

Agenda

Why: Motivation for the Databank

What is Microinsurance Map (MiM)?

Putting It All Together

Analysis:The Story in the Data

Going Forward

Benefits

Catalyzing MI Growth

Sustainable MI growth needs » Capital

» Distribution models

» Information

Catalyzing MI Growth Need For Information in Microinsurance

• Absence of risk data: • Lack of actuarially sound pricing

• Regional health morbidity, livestock breed and disease data missing

• Inability to foray into new risk areas • Vicious cycle: Conservative high price - Attracting high risk clients - High claims: escalation of premium costs

– Absence of Market data: – Isolated innovations without replication – Limited efforts at recording and assessing efficacy of insurer’s MI

strategy – Parallel efforts by intermediaries to compare and choose products in

the market

Drawing a Parallel: The MiX Precedence

• 10 years ago, microfinance was in a similar state as Microinsurance is

today

• MiX Market is a global, web-based, microfinance information platform

– A dashboard of financial, operational and social performance data

– Standardises data based on international accounting standards

– A trusted, independent and accessible source

• Today 1,800 MFIs report to MiX Market. It has 200 partners

The Microfinance proof and the Microinsurance potential

Inspired us to create a National (India) Data Bank for Microinsurance

Core Objective of the Databank

Access to market level data, contributes to:

• Improved transparency leading to self regulation of market

• Sharing of best practices seamlessly

• Key Value

– Tool to spearhead innovation and greater outreach

– Better planning by regulator for catalysing Microinsurance

sector growth

Agenda

Why: Motivation for the Databank

What is Microinsurance Map (MiM)?

Putting It All Together

Analysis: The Story in the Data

Going Forward

Benefits

Microinsurance Map A publicly available MI Data Bank comprising industry and risk data

Partners: Micro Insurance Innovation Facility, ILO

Agenda

Why: Motivation for the Databank

What is Microinsurance Map (MiM)?

Putting It All Together

Analysis: The Story in the Data

Going Forward

Benefits

Target Client

Urban Rural

Non-LIG LIG* LIG Non-LIG

Prod

uct F

iling

(R

egul

ator

) Products under ‘Rural and Social

Sector’ Obligation

1 2 3 4

Products under ‘Microinsurance

Act 2005’

5 6 7 8

Defining the Space

1. MiM relies on Industry data reported under IRDA regulation (as under MI Act 2005 and under the Rural and Social Obligations)

2. Under the IRDA regulations, reported data includes products served to RED PLUS GREEN 3. Hence, Microinsurance Maps also presents data for RED PLUS GREEN 4. Ideally it should report for products offered to GREEN * LIG: Low Income Groups * IRDA: Insurance Regulatory and Development Authority

Data Collection A publicly available MI Data Bank comprising industry and risk data

Market Data • Regulator • Industry Associations • Insurers - public and private, life and general • Mutuals and intermediaries - MFIs, Cooperatives, NGOs, input and output suppliers (on going)

Sources

Risk data on regional basis

• Indian Meteorological Department,

Central Water Commission, Actuaries

Association of India, Govt. Dept. of

Agriculture, National Remote Sensing

Centre, Agriculture Universities

• Veterinary Universities

Data Collection (contd.) A publicly available MI Data Bank comprising industry and risk data

• Agri crop data: variety, cropping

season and period, acreage, primary

risk (meteorological, pest and practice

related)

• Cattle: Breed, primary risks, mortality

rates, productivity factors

• Health: To be defined in March 2011

Organizational Profile Microinsurance business

• Premia - value, volume over time and region • Claims experience - settled, repudiated, time taken over time and region • Gender break up of client over time, region and product category

Product portfolio: for every product • All of the above • Coverage - exclusions, discounts • Distribution and sales strategy

Data categories

Data Collection (contd.)Industry Data Benefits Product 1 Product 2

Life

Death

Maturity

Surrender

Hea

lth/

Pers

onal

Acc

iden

t

In-patient Hospitalization

Outpatient care

Major surgical benefit

Critical illness benefit

Maternity benefit

Domiciliary treatment

Accidental medical expenses Legal expenses

Laboratory tests

Medicines

Pre-existing diseases

Day Care

Co-Payment

No Claim Benefit

Transportation charges

Data Collection (contd.)Industry Data Benefits Product 1 Product 2

Live

stoc

k

Permanent Total Disablement

Temporary Total Disablement

Permanent Partial Disablement

Temporary Partial Disablement

Wea

ther

Area Yield

Crop loss due to High/Low Rain

Crop loss due to High/Low Tempertaure

Crop loss due to Diseases

Sourcing Data

Market information

• Secondary sources (Public

Institutions, regulator, Govt., etc)

• Primary data sources (in-depth

surveys of insurers, quantitative

and qualitative )

• Lack of willingness to share data (no

institutional incentive identified)

• Lack of granular/disaggregated data

availability

1. Identifying sources of data

Asset information

• Specialized data warehouses

(Indian Meteorological Department,

Central Water Commission,

Actuaries Association of India, etc)

Challenges

Sourcing Data (contd.)

• Standardization required to merge data from disparate sources

• Clean up to validate incomplete and erroneous data

• Acquired data to meet minimum quality levels for usability

• Most insurers and intermediaries do not have data in organized form

• Data validation by the provider rarely possible

• Data shared in bits-n-pieces and data elements not in sync in time leading to substantial delay in putting it to use

2. Data Acquisition

• Periodically updating data elements to maintain relevance of data bank

• Frequency of data updation dependant on data type

• Frequency of data limited by

available resources

3. Updates

Challenges

Challenges

Agenda

Why: Motivation for the Databank

What is Microinsurance Map (MiM)?

Putting It All Together

Analysis: Outputs from MiM

Observations – The Story in the Data

Benefits

Microinsurance Map: Trends and Maps

• Market Trends: • Outreach

• Provider Profile

• Product feature comparison

• Government sponsored insurance schemes

• Best practices

• Asset based data outputs and tools: • Agriculture: Crop variety based Premium Calculators at an agro-

meteorological unit

• Cattle: Valuation based on breed and region

Stakeholder Value: Solutions for Insurers

Use • Disaggregated region specific risk data to develop actuarially sound

product pricing • Market insight for development of outreach strategies – competitor

and profitability analysis, exposure to innovative product and processes

Benefit • Public platform to market products, find potential intermediaries, new

relations (IT providers, TPAs) • Plan market entry based on a range of factors- geographical,

distribution models, risk specific and competitor based analysis • Market assessment – Updated about ‘sector news’; Trend analyses

(over years, regions, risk type and market players) • Own portfolio monitoring, analysis and tracking

Stakeholder Value: Solutions for Intermediaries (Co-ops, NGOs, MFI)

Use • Reports to compare pricing and features of own product by various

criteria (region, risk type and insurer, premium and claims) Benefit • Use sector best practices to measure own and partner’s (insurer)

service quality • Improve own visibility to find partners • Assess insurers based on products and performance

Stakeholder Value: Solutions for Policy Makers

Use • Monitor impact of regulation on providers and products Benefit • Create industry benchmarks on product, process and service quality • Identify early trends (sectorally and also for specific providers and

risk categories) to respond accordingly • Make proactive regulation and policy for underserved regions and

track its impact on the market

Agenda

Why: Motivation for the Databank

What is Microinsurance Map (MiM)?

Putting It All Together

Analysis: The Story in the Data

Going Forward

Benefits

The Features

• Outputs- Static and dynamic market snapshots

• Examples:

• Volumes, value, risk category

(life, non-life), ownership

(public, private)

• Claim status (amount & number

settled and repudiated)

• Geographical Coverage

• Product Features

Public v/s Private cumulative premium

Companies v/s Premium Amount

Agronomy report for a region

• Map based output

• District level Premium

Calculators

• Agronomy reports

• Cattle risk reports,

• Health Morbidity

reports (in 2011)

Growth: New Products registered Rural, Social & Microinsurance growth: Public & Private

0

2

4

6

8

10

12

14

2001-02 2002-03 2003-04 2004-05 2006-07 2007-08 2008-09 2009-10

Cou

nt

Financial Year

Private

Public

Growth: (contd.) New Products registered

Rural, Social & Microinsurance growth: Public & Private

0

10

20

30

40

50

60

70

0

2

4

6

8

10

12

14

2001-02 2002-03 2003-04 2004-05 2006-07 2007-08 2008-09 2009-10

Perc

enta

ge G

row

th

Cou

nt

Financial Year

Count

%age

Growth: (contd.)

Premium underwritten: Public & Private (General Insurers)

0

2000

4000

6000

8000

10000

12000

14000

2008-09 2009-10

INR

in M

illio

ns

Financial Year

Private

Public

Growth: (contd.)

in Premium (General Insurers) Company-wise Premium underwritten

-

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

10.000 St

ar H

ealth

and

Alli

ed In

sura

nce

The

Orie

ntal

Insu

ranc

e

Uni

ted

Indi

a In

sura

nce

Nat

iona

l In

sura

nce

The

New

Indi

a As

sura

nce

Cho

lam

anda

lam

Ms

Gen

eral

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sura

nce

Rel

ianc

e G

ener

al I

nsur

ance

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re G

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alli

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a

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io G

ener

al In

sura

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Bha

rti A

XA G

ener

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sura

nce

Roy

al S

unda

ram

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ance

In

sura

nce

ICIC

I Lom

bard

Gen

eral

Insu

ranc

e

Apol

lo M

unic

h H

ealth

Insu

ranc

e

HD

FC E

RG

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sura

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Shrir

am G

ener

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sura

nce

Baj

aj A

llian

z G

ener

al In

sura

nce

Tata

AIG

Gen

eral

Insu

ranc

e

Rah

eja

QB

E G

ener

al I

nsur

ance

Agric

ultu

re In

sura

nce

Com

pany

Expo

rt C

redi

t Gua

rant

ee

Cor

pora

tion

of In

dia

Uni

vers

al S

ompo

INR

in M

illio

ns

General Insurers

2008-09

2009-10

Claims Performance

Microinsurance Portfolio (2007-08 & 2008-09)

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

2007 2008 2007 2008

Claims Paid No. of Lives

INR

in M

illio

ns

Financial Year vs No. of Lives

Public

Private

Risk wise patterns: Agriculture Insurance Company of India:

Premium underwritten (2005-06 to 2009-10)

5.558 5.647

8.351 8.334

15.204

-

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

2005-06 2006-07 2007-08 2008-09 2009-10

INR

in M

illio

ns

Financial Year

Risk wise patterns (contd.) Performance of Govt. Health Schemes

Govt. Schemes Outreach (in Millions)

RSBY- National 19.69 (BPL Families)

Aarogyashri – State Specific 3.75 (BPL Families)

Kalaignar – State Specific 1.4 (BPL Families)

Risk wise patterns (contd.) Performance of Govt. Health Schemes: RSBY

60

49

39 45

60

50 48 45

18

60 56

31

57

75

53

67

32 39

64 67

15

49 56

46

-

10

20

30

40

50

60

70

80

0,00

2,00

4,00

6,00

8,00

10,00

12,00

Ass

am

Bih

ar

Cha

ndig

arh

Chh

attis

garh

D

elhi

G

oa

Guj

arat

H

arya

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Him

acha

l Pra

desh

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arkh

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Kar

nata

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Ker

ala

Mah

aras

htra

M

anip

ur

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hala

ya

Miz

oram

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agal

and

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sa

Pun

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ilnad

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ipur

a U

ttar P

rade

sh

Utta

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and

Wes

t Ben

gal

Perc

enta

ge o

f Fam

ilies

Cov

ered

No.

of F

amili

es in

Mill

ions

States

RSBY Scheme : Families Covered

Total BPL Families BPL Families enrolled till Date %age Families Reached

Agenda

Why: Motivation for the Databank

What is Microinsurance Map ?

Putting It All Together

Analysis: The story in the data

Going Forward

Benefits

Going Forward…

• A site overview: www.microinsurancemap.com • Completing data collection process • Launching product comparison matrix • Creating incentives for periodic updates

• Expanding Agriculture risk maps nationally • Launching Cattle Risk maps in one state • Initiating Data collection of Health risk Maps

Thank You

Please visit us at http://www.ifmr.ac.in/cirm

Our Blog Safety Nets for all

http://www.ifmr.ac.in/cirm/blog

Click here to generate basic information report

Advanced Report Selection

Advanced Report Query Selection Page

Queries Selected

Queries Selected

Public vs Private

Graphical Report generated

Sample Snapshot: Public v/s Private Premium

Sample Snapshot (contd.): Companies v/s Premium

Graphical Report generated

Sample Snapshot (contd.): Agronomy Report

Choose desired state of India (Tamilnadu)

Choose desired district of Tamilnadu

(Thanjavur)

Choose desired block in Thanjavur district

(Papanasm)

Right click on Papanasm to open block information window

Choose type of crop category for which info is desired

(Cereals)

Choose type of crop for which info is desired

(Paddy)

Choose type of crop variety for which info is desired

(Kuruvai Paddy)

Agronomy report for kuruvai paddy can be downloaded from this link

List of rural, social & Microinsurance products Acts & Regulations in Microinsurance

Pre-defined Report Links (Market Information)

Pre-defined Report Links (Risk Information)

Click here to go to market information page

Click here to go to risk information page

Database Capabilities

• Micro Insurance Map database is scalable and reliable and can easily handle data for multiple countries.

• Database design is done in such a manner data can be managed by administrative boundaries at all levels.

• Other core capabilities of the database

– Supports transactions

– integrity checks

– less data redundancy

– fundamental organization and operations handled by the DB

– multi-user support

– security/access control

– Locking

– backups

Technology Platform

November 16, 2010

• Micro Insurance Map have been completely developed using open source tools • Language : Java/J2EE • Web Server : Apache Tomcat • Map Server : GeoServer • Database Server : PostgreSQL/PostGIS • Client Layer : Ext JS/HTML

Market/Risk data

Map data

Webserver Mapping Server

Database Server

Internet

Database : PostgreSQL/PostGIS

PostgreSQL •PostgreSQL is a Open source Relational Database Management System(RDBMS). •A standards-compliant SQL-based database server with which a wide variety of client applications can communicate PostGIS •Open source Spatial Extension for PostgreSQL developed by Refractions Research •An implementation of the OGC Simple Features for SQL Specification within PostgreSQL for the storage of geospatial data (points, lines, polygons) within an SQL based relational database management system (RDBMS). •Developed as a set of functions and data types that ‘spatially enable’ the PostgreSQL object-relational database system.