customer education in agriculture insurance
TRANSCRIPT
Customer education in agriculture
insurance
Interfacing with the webinar system
2
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Issues and challenges around customer
education in agriculture insurance
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Presenter:Brenda Wandera
International Livestock ResearchInstitute
Presenter:Lory Camba Opem
International Finance Corporation
Presenter:Navin Sharma
ICICI Lombard General InsuranceCompany
Facilitator:Pranav Prashad
Impact Insurance Facility
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Achieve better understanding of how to mitigaterisk
Create value for the customers
Help providers reach more clients and expandmarkets
Change behaviours in agricultural communities
Poll: Why is it important to educate
clients
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Customer education at the core of
responsible finance
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Staying Resilient and Keeping Customers FIRST
Why does customer education in
responsible insurance matter
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Inadequate understanding and low consumer protection can lead to further impoverishment of low income consumers and can limit market expansion and profitability of product.
The benefits of insurance products are difficult to understand for consumers, more so in mandatory products
Where products are voluntary and consumers must make out-of-pocket premium payments, there is a risk of involuntary lapse of the policy. Better understanding creates safeguard to minimize this risk.
Greater focus on consumer’s needs and their better understanding helps organizations build stronger relationships with their clients. This enhances trust, increases client retention, and reduces the risk of lapses or false claims.
Adherence to consumer protection goals creates more socially valuable and financially stable institutions and products
Why it matters to our clients and their
customers
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Serves customers with products that fit their needs: both traditionaland digital financial services; microenterprises (NGO transformations,cooperatives, etc), banks (downscaling), NBFIs (insurance, housing)
Builds long-lasting customer relationships: customer education,product understanding & use; importance of credit reporting, managingmultiple loans; diversified services to retain/obtain customers
Manages risks for more prudent growth: help develop riskmanagement systems and processes as backbone for more prudent,resilient business growth, solid customer base for expanded services
Anticipates uncharted risks of opportunities (like use of technology):low customer uptake, unreliable agents/networks, data/info security,KYC, fraud
Measured by responsible insurance
indicators
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A number of Social Performance Indicators (SPIs) are tracked so insurers can develop a better understanding of where consumer protection needs are met and where challenges remain. This knowledge can inform capacity-building efforts throughout the value chain.
Consumer Protection Question Indicator
Are products appropriate for the clients they are sold to?
• Incurred claims ratio• Claim Settlement Turnaround
time
What safeguards exists to protect client data? • Guidelines on privacy of client data
What renewal process is used? • Renewal ratio
What process exists to tell consumer a claim is rejected? Is the ratio appropriate?
• Claim rejection ratio
What opportunities do clients have to file complaints?
• Complaints ratio
Are clients satisfied? • Client Retention Rate
Challenges in developing responsible
insurance through education
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Challenge 1: Lack of Awareness and Poor Perception of Risk
Challenge 2: Low Demand and Uptake
Challenge 3: Need for Clarification of Roles
Challenge 4: Lack of Adequate Regulatory Frameworks
• Provide information and education for consumers at different engagement points
• Partners with known brands to increase trust
• Bundled products and modular products• Digital Products (not just for distribution)• Incentive models for voluntary insurance take-up
• Better understanding of partnerships and business models
• Designing appropriate Risk-pooling mechanisms• Improve cooperation between entities – better
relationship between insurers and actors in the value chain
• Promote engagement between regulators and industry• Develop guidance for providers (for traditional and
digital insurance)
Evolution of education tools and approach
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Index based insurance is a new concept. It is important that clients receive accurate and complete information. Misinformation leading to unrealistic expectation and subsequent disappointment will damage the reputation of the product.
IBLI potential clientsMostly illiterate or semi illiterateHave had zero or limited prior experience with insurance
Continuous education on the product and its benefit is keyTools need to be easy to understand for them Approaches need to be acceptable and interesting for the clients
Consumer education tools and approach adapted based on
Experience & Feedback
Objective of consumer education
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Proposed theory of change around consumer education
Key challenges & possible solutions in
rural segment
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Improving awareness among farmer community
Innovative distribution & marketing activities – promotional activities, add on services like agro advisory
Optimise costs Using technology & cross utilization of existing infrastructure
Manpower and infrastructure requirement
Creative
distribution+
Use of technology
Engagement activity to create awareness
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Creating awareness about Crop Insurance
Facilitate better understanding of the NCIP
Importance of Insurance as a collateral security
Understanding of Roles & Responsibilities
Feedback from Banks & Govt. & Scope for improvement in our services
Engagement with channel partners
Engagement with government
Engagement with end users
Marketing collaterals –awareness and promotion
Newspaper & radio spots
Objective Intervention
Use of IEC activities to achieve behavioral change in the target segment
Product information – benefits, cost etc.
Process for claims (and enrolment)
Information on risks and insurance principles
Alternative solutions to manage risks
Poll: What topics should insurance
consumer education address
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Consumer awareness and financial
education: customer journey
15Wiedmaier-Pfister & McCord (2012)
Point of SaleAgent educates consumer before selling policy
TV, radio, Internet and phones Drama, talk show, Interactive website jingles, SMS
Workshops Train the trainers: Need trainers equipped to train adults in practical ways
SchoolsFinancial education included in curriculum Extra-curriculum activities: clubs, school visits
Community events Road show, street theatre, movie
In-community knowledgeable persons Either community leaders or simple members Trained for specific messages and advice
Educating customers helps for client-centric
product design via diversified channels
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Improving Client-Driven Product Design
Diversifying Distribution Channels
Build Consumer and Local Players’ Awareness
Develop the reach and diversity the distribution network
Identify, pitch, enter agreements with, and provide tailored insurance policies for local distributors
Increase consumers trust in provider and insurer, training officer to explain advantages of insurance
Provide capacity building trainings on index insurance for local actors, including insurers, distributors, regulators and other stakeholders
Offer bundled products, insurance + credit, leading to higher uptake
Assess data modeling methodology and techniques used for calculating risk, pricing and handling of underlying data to make these more transparent
Review and recommend improvements to product coverage terms, including the claims assessment methodology (i.e. in determining what qualifies for a payout)
Use feedback for
Consumer education approaches
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• Face to face trainings - Agents endorsed by community for trust
• Interactive radio programs - Local radio station and languages
• Pre- recorded radio programs - Local language
• Insurance games - Based on pastoral production system
• Edutainment videos - Shown in the evenings in the villages
• Community meetings - Oral community • Skits - Local artists• Use of village chiefs - Trust issues
Using Games and “Village Elders” for
“consumer education”
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Insurance simulation games effective for insurance
understanding
• Used some of the pastoral systems to explain the difficult concepts
• More sales were recorded in these areas as opposed to areas where there were no games
• Resource intensive and time consuming • Not feasible to play the games with the all the
households in the area : choose carefully
Village elders have proven to be some of the most
effective Master Trainers and VIPs
• Convincing the other village elders of the validity of the insurance product
• Reducing the skepticism of the local population• Sub division of roles between Master Trainers and VIPs
worked well• The older men, who were trusted by the
pastoralists, relayed information while the younger men finished the transaction
• Evolved to lead and sub agent relationship -commercial
Past tools
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● Cartoon● General
Video● Poster● Insurance
simulation games
● Quick Ref● Edutainment
Video● IBLI Training
Manual
● IBLI Payout Video● Jingles● Updated Pictorial● Issue Cards● Pocket Guides:
FAQs, Communication Skills, Rate Cards
● IBLI Pictorials for Ethiopia
● Updated Pictorial for Kenya
● Updated quick reference guides
● Index announcement poster
2010 2011 2012/2013 2014
Material for clients: pastoralists
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Material for clients (II)
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Material for sales agents
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Latest tools and approach - 2015
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We pride ourselves in being innovation champions… each setback for us is an opportunity to do even better!!!
Gamification
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Pocket IBLT
Find out where
you are on the
Leaderboard
Earn Badges
Kenya Livestock Insurance Program -
KLIP
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Consumer education strategy
Level 1: Knowledge and tools for government and insurance industry policy makers
Level 2: Knowledge, skills and job aids for IBLI/KLIP sales agents and promoters
Level 3: Awareness raising for potential clients
Through community leaders and farmercooperatives
Through relevant agriculture input providers
Through mass media – radio and newspapers
Using mobile phones
Poll: What are the most effective ways to
engage with rural agricultural households
on insurance awareness & education
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Stakeholder Mapping – work through
Government
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The Insurer
District Admn.DM & Agri.
Deptt
Deptt. of Agriat State Level
SLBC atState Level
Dist. LevelBanks
Farmer
Engagement at each level is a pre-requisite to Create awareness about scheme Earn the buy-in of each stakeholder and use them to promote Develop rapport and set up momentum
SLBC: State Level Banking Committee
Focused Engagement & Recognition
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R&R to motivate channel partners for high penetration
Engaging & explaining to govt. and bank officials –effective spokespersons
Workshops at multiple levels
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District workshops to sensitize the district officials about insurance covers and processes
Pradhans (village chiefs) workshop to mobilize the people’s representatives
Special women workshop
Marketing collaterals - reinforce the
message
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Posters & Banners
Wall paintings - effective in health too!
IEC Activities
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Using opinion makers Reach non motorables via “hand miking” (Bihar)
Local flavour (Jharkhand) Catching eyeballs (Odisha)
Innovations - Kite festival (Gujarat)
Mobile van campaigns
Participation in local events
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Nukkad Natak - Skits and drama at Durga Puja in Bengal
Promotion through most reachable and relevant media - the radio jingle
Innovative practices
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Innovation in enrollment for increased efficiency - Tab based enrollment of non loanee farmers
Impact of Increased engagement and
customer oriented activities
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Engagement with stake holders & other interventions helped in terms of extending reach
• Significant increase in no. of farmers covered as compared to previous year in the same district speaks volumes about the impact of effective engagement
161000
314760
24433
79300
Farmers covered K 14 Farmers covered K 15
MNAIS WBCIS
95%
224%
*Kharif 2014 and 2015
WBG/IFC responsible insurance strategy:
leveraging on Global Index Insurance Facility
(GIIF)
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• Support Insurance providers in developing strategies to strengthening responsible insurance practices across business functions
• Monitor and track progress against Smart Campaign social performance indicators, using a set framework and set of indicators
Consumer Protection & Responsible
Insurance Delivery
• Develop & distribute trainings on insurance management for non-traditional insurance distribution channels
• Capacity building for local insurance entities to track social performance
• Workshops & trainings to build consumer awareness through private and public financial education campaigns
ConsumerAwareness &
Financial Education • Evaluate the impact of insurance on the lives of the end-beneficiaries
• Evaluate progress in social performance based on indicators tracking
• Share lessons in international fora – e.g. Microinsurance Network, Consumer Protection Working Group
Evaluate Lessons & Share Results
Financial education lessons from IFC
projects in India
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Program should cover the entire delivery spectrum- broad based to intensive
Appropriate mobilization strategy is critical for client retention-participatory approach to contextualize content to match client expectations
Balance should be struck between scale of the program and its effectiveness
Regular monitoring for quality/evaluation and impact assessment for motivating HR
Employing appropriate technology can help achieve scale and reinforce learning among clients- MIS, radio, television, audio-visual content
Delivery of financial education should be followed up with access to appropriate products to increase retention
Very little evidence of cost benefit analysis. Benefits could be direct/indirect
Financial Awareness is like a vaccination drive– value unrecognized until afflicted by disease (in this case high debt levels/erosion of savings)
Case study: financial institutions
interventions in financial education
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An MFI in South Asia provides a 5 week financial literacy program to clients on basic money management (debt management & savings) Facilitates opening of savings accounts Graduates get perks:
Extra Rs.2000 on credit limit Eligible for Individual Loan if 2+ year client Access to cashless disbursements
An MFI in China uses informal trainings to raise client awareness of their products and their understanding of financial services via innovative means: emails, calendars and group trainings
An MFI in India set up a Financial Information Centre to give financial advice by telephone and uses a variety of interactive teaching methodologies like games, stories and cases during financial literacy trainings.
Elaborate Lessons for agri insurance
A greater number of countries is
developing national financial education
frameworks
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Data from OECD/INFE, PISA Frameworks
• Greater number of countries are relying on evidence and the measurement of financial literacy to develop their strategy based on evidence of needs and gaps across their population.
• Most countries have used national financial literacy surveys relying either on available international tools
WB Global Financial Literacy Survey
Accurate and complete information to clients helpsto create realistic expectations that are more likely tobe met - this helps with building trust.
Proper information and education about insurance ismust for all stakeholders for providing full benefits tothe farmer and create value at each level.
There is a lot work still be done for consumereducation and as we've seen today, for insurance asa product and more specifically for agriculturalfarmers. IFC/WBG remains committed to financialinclusion.
Concluding thoughts
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Issues and challenges around customer
education in agriculture (index)
insurance
4040
Presenter:Brenda Wandera
International Livestock ResearchInstitute
Presenter:Lory Camba Opem
International Finance Corporation
Presenter:Navin Sharma
ICICI Lombard General InsuranceCompany
Facilitator:Pranav Prashad
Impact Insurance Facility