Converting Freemium customers at Scale

Transcription

1 Converting Freemium customers at Scale Tughral Ali Head of MicroEnsure Africa Casablanca, Nov th International Microinsurance Conference

2 MicroEnsure Overview: by the Numbers Founded in 2002 by Opportunity International 2007 Gates grant, 2012 conversion to for-profit social enterprise Investors: AXA, Omidyar Network, IFC, Sanlam Design, implement and operate micro insurance products worldwide 16 million customers in Africa/Asia 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 70 insurance partners 14 telecom partners 4-Time Winner of Financial Times/IFC Awards

3 Freemium Mobile Insurance in Africa Competitor 1 MicroEnsure Competitor 2 Competitor 3 Competitor 4 Leo Namibia 2007 EcoNet Zimbabwe Tigo Ghana 2010 Tigo Tanzania 2011 yumobile Kenya 2012 Grameenphone BD 2013 TNM Malawi Telenor Pakistan 2013 Airtel Ghana 2014 Airtel Zambia 2014 Airtel Burkina Faso 2014 Airtel Nigeria 2014 Airtel Niger 2014 Airtel Madagascar Airtel Kenya 2014 Airtel Malawi 2015 Equitel Kenya 2015 Telenor India Tigo Senegal 2012 Robi Bangladesh 2012 Tigo Mauritius 2013 Dialog Sri Lanka 2013 XL Axiata Indonesia 2013 Vodacom TZ Telkom SA MicroEnsure built and operated the first major freemium mobile product with Tigo in 2010 which has been copied by several companies since MicroEnsure has deployed more freemium mobile products than all competitors combined: freemium is the dominant model for mobile insurance success as documented by CGAP, GSMA and other independent researchers

4 The MicroEnsure Value Proposition Unprecedented Products High-Volume Systems Market Knowledge Robust Operations Speed, Efficiency, Agility Technical Strength Customer Value

5 Freemium Product Examples: Telecom Bank/MFI

6 The Mobile Insurance Revolution

7 Mobile Insurance Freemium Model Earn free life, accident and hospital cash cover up to $2,500 when you top up $2 The more you top up, the more you earn Pay $1 per month and double the free cover you earn Earn up to $5,000 in life/accident and hospital insurance Buy additional cover for a family member Buy additional types of cover: health, handset, travel, crop

8 Embedded leads to paid uptake Embedding entry strategy educates the market

9 Product Example Ghana 3 for Free Phase 1 January 2014 Monthly Recharge Life Cover Accident Cover Hospital Cash GHS GHS 250 GHS 250 GHS 25 GHS GHS 500 GHS 500 GHS 50 GHS GHS 1,250 GHS 1,250 GHS 100 GHS 50 and up GHS 2,500 GHS 2,500 GHS 150 Phase 2 March 2015 Double Cover pay GHS 1 per month to double your 3 for Free Cover: enjoy up to GHS 5,000 in life, accident cover and GHS 300 hospital cash Family Cover pay GHS 3 per month to double your 3 for Free Cover and give them same coverage to a loved one

10 Free Product Impact 2014 Data Increased ARPU and decreased churn leads to an excellent return for the MNO Insurance Launched Average Recharge per User (ARPU) Oct Nov Dec Jan Feb Mar Apr May June Control All Insured While financial inclusion & insurance penetration skyrocket as claims are paid 18,0% 16,0% 14,0% 12,0% 10,0% 8,0% 6,0% 4,0% 2,0% 0,0% Jan Feb Mar Apr May Jun

11 Mobilizing Deposits: Proven Results Example from Ghana: Savings-Linked Life Insurance Product - Cost the bank N10,000,000, returned N45,000,000 in value: 450% ROI

12 Mobilizing Deposits: Proven Results Ghana: Savings-Linked Life Insurance Product June-November 2011 Increase in Deposit Balances Below 10,000 NGN Branch Balance As At June 2011 Ending Balance As At Nov 2011 Ending Savings Increase % Branch 1 7,314,012 22,003, % Branch 2 5,666,264 17,637, % Branch 3 7,822,223 25,308, % Branch 4 10,971,826 29,841, % Branch 5 9,899,560 27,702, % Branch 6 11,681,174 39,608, % Branch 7 6,782,638 22,321, % Total 60,137, ,423, % MicroEnsure insurance product was the only intervention during the period

13 Selling Loans through Microinsurance Must extend beyond credit life insurance to drive value ADD Permanent Disability/Critical Illness ADD Flood/Fire Catastrophe Cover Bank, borrower and trust groups benefit Bank / MFI Borrower ADD Spouse / Children Funeral Cover ADD Credit Health Cover Borrower and family benefits directly Borrowers Families

14 Converting Freemium Customers: Lessons Learned

15 Freemium to Paid Choosing Sales Channels Reach Field Agent Retail Call Centre SMS Product Understanding 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

16 Field Agents some challenges Agents face limitations on achieving scale required for profitability Cost of agent reduces the value that can be provided to the customer. Result: low benefits Training and new product introduction are complex and expensive Insurance sales is not a frequent transaction model

17 Freemium to Paid Lessons Learned Use customer balance data to design payment structure. Worked with telecom to go through historical data. Daily payment options must allow for missed payments. Originally 20 daily payments per month, but customers balances are too inconsistent for so many transactions. Solution: increase payment amount, decrease number of payments.

18 Freemium to Paid Lessons Learned Characteristics of successful sales leads: Subscribed to freemium product Active on network Consistently has balance Has balance at point of enrolment In-house call centre more effective, cost-efficient Greater control of scripts, quality of information. Direct connection with agents, easier to manage morale. Significant cost saver, quickening pace to break-even.

19 Thank You Tughral Ali Head of Africa, MicroEnsure Nairobi, Kenya