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Since 1998, BRAC’s Social Development Programme has produced plays to highlight unjust, illicit and exploitative practices in society while preserving Bangladesh’s rich tradition of local drama and folk songs. Participants are selected from among the MFI’s clients and are provided with 10 days of intensive training in rural theatre. During the last three days of training, participants visit different villages to collect real-life stories reflecting critical social issues. Such methods promote the health insurance scheme by portraying the benefits if struck by a health problem.
A modern version of the popular theatre is the video, used by organizations like Tata-AIG to help potential customers understand how insurance works and why they should buy it. Unlike the street theatre, the video approach does not have the advantage of involving participants in the process of delivering the message, but in India Bollywood-style films can have a powerful impact on the target audience. Tata-AIG shows the videos from branded vans, and then once the film is over, the micro-agents can answer questions and sign up policyholders.
Low-tech education strategies can also be effective if they take into account the target market’s education level. Perhaps one of the more comMicroinsurance operations mon marketing techniques is the use of pictorial presentations – used by BRAC MHIB, AssEF and others – to illustrate how insurance works. An illustrated flipchart is a visual aid that helps to standardize the delivery of the main messages and increases the likelihood that audience will understand those messages. Yet the approach is still interactive and allows prospective policyholders to ask questions.
Literacy levels in a given community should influence the design of an educational campaign. In defining the depth and breadth of its market, a microinsurer must consider whether or not prospective clients are illiterate.
If this is the case, microinsurers must provide the necessary information, about microinsurance in general and about the particular products being offered, without relying heavily on written communication.
One of the challenges when using any of these education techniques is to ensure that people actually understand and remember the main messages being conveyed. To address this challenge in Viet Nam, the Ninh Phuoc scheme has turned the exercise into a game. Key questions are written inside paper flowers, which are then placed in a tree or bush. Clients take turns picking the flowers and trying to answer the questions. If they get them right, the clients get a sweet or some other reward.2 When designing an education campaign, it is important to consider the market’s heterogeneity. Different communication methods and messages may be required for each prospective market segment – a lesson learned by CETZAM (see Box 32). It is also important to define terms and avoid jargon.
For example, in Uganda, the word “beneficiary” is associated with one who benefits from a social programme. Thus, clients frequently consider themselves as beneficiaries of their MFIs. Since there has not been adequate training, neither clients nor loan officers understand what this word means in the context of insurance.
Regional differences in ZambiaBox 32
In September 2002, CETZAM conducted market research to gauge its clients’ reaction to the new life microinsurance product, Ntula. The research demonstrated that 81 per cent of clients thought that Ntula helped protect them and their business at a time of stress. The research also highlighted the reason for the demand for insurance: 41 per cent of clients reported a death in their family during the previous year. Interestingly, 15 per cent of CETZAM’s clients were opposed to the introduction of Ntula and nearly all of these were located in Livingstone, a town in southern Zambia.
2 This information about Ninh Phuoc was provided by Nguyen Thi Bich Van of the ILO office in Hanoi.
Marketing microinsurance 187 CETZAM’s head office and the majority of its clients are based in the northern towns of the Copperbelt. It is common for clients to travel between these towns. As a common language is spoken, clients in other northern towns heard about the insurance pilot that was being conducted in Kitwe via the community radio stations. By the time Ntula was rolled out to the other Copperbelt towns, clients were already asking their loan officers for the product and as a result, its introduction was enthusiastically received.
By contrast, Livingstone in the south is a day’s drive from Kitwe with a different local dialect and culture. “Ntula”, which means “lifting up the burden” in Bemba, does not mean anything to the people in Livingstone. The clients and staff in Livingstone had not been informed about Ntula and so its introduction was met with resistance and suspicion.
It was later revealed that at the time of Ntula’s introduction, two other factors conspired to discourage Livingstone clients. First, loan disbursements had been recently delayed, which led clients to become concerned about CETZAM’s financial health. The introduction of the insurance product, which was compulsory and involved a deduction from the loan, struck clients as a desperate measure to ensure the survival of the organization.
They did not consider that Ntula would ever pay claims, and rather saw it as a levy on the loan to keep CETZAM running. Secondly, at the time of its introduction, a local newspaper was exposing incidents of “black magic” in the town. Clients linked Ntula, a product covering the death of the client plus five family members (six people in all), as being somehow demonic. It took several weeks of street theatre by a local organization to change public perception of insurance in Livingstone.
Source: Adapted from Leftley, 2005.
When developing insurance education tools, it is also useful to consider the diverse array of potential communicators. Many microinsurers team up with other organizations (or other parts of their own organization), including healthcare workers, social workers and government officials, to communicate with many prospective policyholders. For example, GK in Bangladesh uses the maternal and child health services provided to poor households by the roving health assistants of a sister organization as a promotional tool.
Similarly, BRAC’s non-formal education teachers promote the health insurance scheme to parents of their students. Mutual and cooperative insurers use their affinity groups, which often have education committees, as a key means of promoting insurance education. In general, for these “insurance educators” to be effective, they need sufficient tools and training to deliver the messages.
188 Microinsurance operations One of the strongest lessons that emerged from the case studies is that it is much easier to communicate with clients if the product is kept simple. La Equidad in Colombia has two microinsurance products and has had greater success with the simpler of the two. As described in Chapter 3.1, it is easier for clients to understand the product if there are no exclusions, if the benefits are uniform or at least straightforward, and if the pricing is transparent. Ideally, it should be possible to explain the details of the product in five minutes or less.
Where products are complex, field staff often explain just a fraction of the benefits, exclusions and procedures. If staff do not mention certain benefits, then clients will not claim those benefits if the insured event occurs. If staff do not explain the procedures, then the process of making claims is also likely to be extremely inefficient for all involved.
A major obstacle to increasing the market’s understanding of the insurance product is the fact that many people in the distribution system do not understand it. This staff problem, common among microinsurers, emerges for several reasons, including a lack of good staff training, insufficient monitoring and incentives for staff and high salesperson turnover. This challenge, which few organizations have succeeded in overcoming, is discussed in
2.3 Activate the customer Once the market is aware of insurance and the insurer, and it has an understanding of the product, the third phase in the marketing process is to arrange for the customers to sign their contracts and pay their premiums.
One approach to activating the customer is through annual subscription periods or enrolment campaigns, such as those used by VimoSEWA and UMSGF. As summarized in Table 22, there are advantages to both annual campaigns and rolling admissions. Annual campaigns can motivate staff for one big push to sign up customers. It activates some lukewarm or undecided persons to buy insurance because they do not want to wait another whole year before receiving cover. In addition, once-a-year enrolment provides some underwriting control, since policyholders could not choose to enrol only when they became ill; they can only sign up during the campaign. A key disadvantage is that it creates a peak workload period for staff. Furthermore, members missing the campaign have to wait a year to get insurance. The campaign also has to be timed so that policyholders have a year’s worth of premiums available during the enrolment period – as Karuna Trust learned (see Chapter 3.3).
Marketing microinsurance 189 Table 22 Rolling admission versus annual campaign
Other promotional activities include raffles or lotteries. For example, Columna periodically organizes raffles in which policyholders can win household appliances. Such an approach can be designed to benefit the policyholders, the sales agents, or both.
One activation strategy that microinsurers should avoid was tried by Delta Life. In the 1990s, it introduced a complementary product whereby policyholders could get a microenterprise loan. Indeed, a key reason for Delta’s exponential growth during this period was that agents used the prospect of getting a loan as an enticement to start an insurance policy. This offer was quite attractive because one could get a Tk. 5,000 (US$83) loan after paying a few hundred takas in premiums. However, many of these policies lapsed, and many loans were not repaid (see Box 37 in Chapter 3.3).
Regardless of whether marketing is stimulated by an annual campaign, raffles or other sales gimmicks, ultimately the most important factor in selling voluntary insurance is the agent’s technique, the persuasiveness of the personal sales pitch and word of mouth from their peers who have had a good experience by having a microinsurance policy. Unfortunately, microinsurers are generally lacking in this area. Since they tend to rely on low-cost or even volunteer promoters, or on salespersons who distribute insurance in addition to their main activity (e.g. savings and loans), there is significant room for improvement, as illustrated in Box 33.
The insurer recognizes that it is easier for CUs and their part-time insurance agents to sell insurance that is linked with savings or credit products than stand-alone insurance policies. If someone wants a contractual savings product, for example, then it is quite natural to ask them if they would like the inexpensive savings completion insurance in the event of accidental death or disability. It is much harder to sell a tenant’s insurance product that has no link to either savings or credit.
For the member-pay products, the credit union and the insurer could be competing for the member’s finite financial resources.3 The only way they can both succeed is if they can increase the amount of money that the consumer is willing (and able) to spend on both.
To overcome some of these challenges, TUW SKOK invests time and money in cultivating a good relationship with the CUs, with a strong emphasis on communication and information-sharing. Twice a year, the insurer holds a retreat with the managers of the major credit unions, and uses that opportunity to inform the CUs of upcoming plans, to solicit feedback on product design and customer service, and to cultivate sales competition between credit unions.
Source: Adapted from Churchill and Pepler, 2004.