Mobile Insurance:

Freemium to Premium

Adjoa BoatengRegional Director – West Africa

November, 2015

AIO Life Seminar Lome, Togo | November, 2015

Outline

MicroEnsure– Who We Are & Global Footprint

The Freemium Model– The Lemonade Stand– The Win-Win-Win Model– Why Offer Freemium– Experience from Airtel Insurance

Upgrading to Premium– Current Position– Converting Free to Paid

Key Lessons

Founded in 2002 by Opportunity International

2007 Gates grant, 2012 conversion to for-profit social enterprise

Investors: AXA, IFC, Omidyar Network, Sanlam, Opportunity, Telenor

African footprint: Ghana, Malawi, Zambia, Nigeria, Kenya, Tanzania, Uganda, Mozambique, Niger, Burkina Faso, Madagascar

Design, implement and operate micro insurance products worldwide

85% of customers are new to insurance

Cover various classes of risk: life, inpatient/outpatient health, crop, political violence, micro asset, accident/disability, “decongestion”

90 banking and microfinance partners in 12 countries

70 insurance partners , 3 telecom partners

3-Time Winner of Financial Times/IFC Awards

‘’Best Micro Insurance Provider, Africa” - Mobile Money Africa Awards 2014

"Best Low Income Group Product, Africa" Mobile Money Africa Awards 2015

MicroEnsure - Who We Are & Global Footprint

10 –year – old Alex setup his lemonade stand. There were 6 other lemonade stands around but all of them

were offering similar lemonade flavours.

Decision? He decided to give:

A plain lemonade for Free plus; Offer 5 other lemonade flavours at a Price of $1 per

glass.

Note : The $1 is to make up for the cost of giving away the free lemonades.

What was the result? His stand attracted more crowd. He earned more than the other stands.

The Lemonade Stand

https://www.chargebee.com/blog/freemium-business-model/

The Win-Win –Win Model

Win – Win –Win Subscriber – Telco - Insurer

I. Subscriber is able to access FREE Insurance

probably for the first time

II. Telco is able to EARN MORE REVENUE from

LOYAL customers

III. Insurer gains access to a SIZEABLE risk Pool

Free

A Better Model

Why Offer Freemium?

The Win-Win-Win Model

Market Penetration Tool

People willing to pay, but after they have

experienced how the product works

More paid sales than paid products alone

Increase loyalty and spend

Product pays for itself via ARPU Uplift and

Churn Reduction

three for free!

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

15,671101,704

534,106

898,068

1,212,769

airtel three for free!

insurance for everyone – only from airtel

Enjoy peace of mind from airtel

life, accident, and hospital cover, all in one great package. Use more airtel, get more insurance!

Earn up to GHS 2,500 insurance just for using your airtel line

Freemium Market Impact – Airtel Ghana

Airtel Insurance (2014 Data)

• One of the largest benefits on a mobile insurance product in the world

• First launched in Ghana ; now 8 countries

• Airtel Ghana Three for Free, launched January 2014.

• Product to cover life, accident and hospital cash

• About 70% of registered Subs qualify each month for cover

• Conversion Rate of 65%

Upgrading to Premium

Current Position

Total Paid Subscribers 86,377

Avg. Daily Uptake 392

Avg. Monthly Uptake 11,020

Avg. Monthly Paying Subscribers (from inception

19,594Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-1

5

Sep-

15

Oct-1

5 -

10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000

Monthly Subscriber Base

Overall there has been a 94% increase in payment success from 19% to 37% in April and

October respectively.

Converting Free to Paid

Sales Channels

– Field Agents– Call Centre – Telco Retail Offices– USSD– SMS

Best Option: Call Centre

– Product explained by real person.– Reach 3x more than field agent per day.– 70% of enrolments for Airtel Insurance in Ghana

Key Lessons

In-house call

centre more

effective & cost-efficient

Flexible payment

terms e.g. monthly,

weekly and daily

Staff knowledg

e on product offerings

& compone

nt is essential

Use customer balance data to design

payment structure.

Customer Education

is important

Use a combination of Above-the-Line & Below-the-

line Marketing

Thank You

Adjoa Boatengadjoa.boateng@microensure.com