Microinsurance Product Pool

Transcription

1 Microinsurance Product Pool Overview and assessment of Allianz microinsurance products Allianz SE Oct 2014 public

2 Introduction This microinsurance product pool lists the microinsurance products of Allianz Group that currently provide insurance cover to low-income people in emerging markets and developing countries. Products launched since June 2013 which still have less than 1,000 inforce (active) policies are not included. Two non-microinsurance products are included at the end to show why some Allianz products are not considered microinsurance although they also serve low-income people. This initiative supports the Transparency value of our Allianz microinsurance values: Allianz Microinsurance Values 1 Passion Quality Fairness Transparency Information on each product is presented in three sections: e.g. product pool A. Product specifications Gives a high-level explanation how the product looks like (distribution, benefits, pricing) B. Product assessment 2 Matches the product against the Allianz microinsurance definition and assessment tool. C. Product brochures where available This includes 1. Knock-out criteria: Can we call this product micro?, and 2. Qualitative criteria: How well does the product fulfill our microinsurance values? 2 We will update this product pool every April/May and October as new microinsurance products are launched and existing products are modified or taken off market. We try to list products from the moment that over 1,000 inforce (active) policies are first reached until the last policy matures. However, there is no duty to update (see disclaimer). Contact Martin Hintz Microinsurance Allianz SE martin.hintz@allianz.com Is this really the latest? See our microinsurance website for the most recent reports and publications 1) To learn more about the Allianz microinsurance values please see our latest microinsurance business updates. 2) The product assessment shows how well the products is intended to serve low-income families in compliance with our microinsurance values ( as planned ). It does not verify how products and distribution look on the ground ( as is ). Example: Allianz may have produced product brochures although for various logistical reasons they do not reach the insured. The assessment is also no indicator for actual business success. 2

3 Overview 1 Knock-out criteria: "Can we call it micro?" Qualitative criteria: "How well aligned with our microinsurance values?" A B C D update # Country Company 1 Colombia 2 Colombia 3 Colombia 4 Ivory Coast 5 India 6 Indonesia 7 Ivory Coast 8 Indonesia 9 Malaysia West Africa & Egypt West Africa Allianz Colombia Allianz Colombia Allianz Colombia Allianz Africa Bajaj Allianz Life Allianz Life Allianz Africa Allianz General Allianz General 12 Burkina Allianz Africa 13 India 14 India Product Name Family Term Life Home Business Life & Maternity Mobile Funeral Insurance principles Dev. Country or EM Low-income focus No subsidies >50% Strong Risk Mgmt Other benefits Customers involved - - Life Savings - - Credit Life Plus Funeral Insurance Voluntary Customer education Scratch- card PA Motorcycle PA 2 Allianz Africa Credit Life - Allianz Africa Crop Index Bajaj Allianz General Bajaj Allianz General Savings- Life Cattle & Livestock PA Plus Product simplicity Low transaction costs Quality rank avg. c1-c7 Details on page ) See our website for a full explanation of our assessment methodology 2) PA: Personal Accident Note: A high ranking is only an indicator for compliance with Allianz microinsurance values, not an indicator for actual business success 3

4 Overview 1 Knock-out criteria: "Can we call it micro?" Qualitative criteria: "How well aligned with our microinsurance values?" A B C D # Country Company Product Name Insurance principles Dev. Country or EM Low-income focus No subsidies >50% Strong Risk Mgmt Other benefits Customers involved Voluntary Customer education Product simplicity Low transaction costs Quality rank avg. c1-c7 Details on page 15 India 16 India Bajaj Allianz Life Bajaj Allianz General Group Term Life Personal Accident Phased out products since last update May 2014 # Country Company 3 1 Colombia Madagascar Allianz Colombia Allianz Africa Product Name Knock-out criteria: "Can we call it micro?" Qualitative criteria: "How well aligned with our microinsurance values?" A B C D PA 2 & Dental Mobile PA Quality rank avg. c1-c Reason for phase out Distribution contract ended Phased out due to low product quality Non-qualifying products due to failing on criteria A - D # Country Company Product Name Knock-out criteria: "Can we call it micro?" Qualitative criteria: "How well aligned with our microinsurance values?" A B C D Quality rank avg. c1-c7 Details on page 1 Ivory Coast Allianz Africa Mobile Savings not micro 49 2 Malaysia Allianz Life General Life & PA 2 not micro 53 Non-qualification means that a product has failed to meet any of the four basic criteria A D of the Allianz Group microinsurance definition, although they may still address needs of low-income people. Sample cases are shown here to better illustrate conditions under which this may happen. 1) See our website for a full explanation of our assessment methodology 2) PA: Personal Accident Note: A high ranking is only an indicator for compliance with Allianz microinsurance values, not an indicator for actual business success 4

5 1. Colombia: Family Term Life A. Product Specifications Product name (generic or marketing name) Product type (e.g. term life, endowment, motorcycle) Seguro de Vida (Life Insurance) Term Life Company name Allianz Colombia Country Colombia Distribution partner type (e.g. MFIs, banks, coops, retailers) Launch date (and stop date if any) Microfinance Institution (MFI) 1 July sentence product description Voluntary Group Term Life Insurance that provides life insurance cover to the group s members (and optional their partners) plus additional funeral cover to the insured group members and up to 4 freely chosen close relatives Group or individual product Group Voluntary opt-in, opt-out or compulsory Covered risks & benefits / sum insured Premium range (min, max) Avg. premium / year (annualize if necessary) Voluntary opt-in Death due to any cause of insured (i.e. group member and optional against additional premium the partner): COP 3mn to COP 15mn depending on chosen premium plan (~ USD 1,600 to 8,000) Funeral benefit to member and 4 freely chosen close relatives (which can include the partner): up to maximum COP 3mn (~ USD 1,600) for all premium plans. Benefit expires after 2 death cases Maximum sum assured per person: COP 30mn (~ USD 16,000), e.g. if a client has multiple policies of this product Minimum COP 9,960 per month (~ USD 5.50) for minimum benefits for single insured and 4 relatives Maximum COP 42,068 per month (~ USD 23.00) for maximum benefits for insured, partner and 4 relatives COP 122,880 (USD ~ 68.00) Other comments The product is only available to active clients of the MFI, i.e. those who have an active credit and/or savings account with that MFI 90 days waiting period for minor pre-existing conditions 180 days waiting period for major pre-existing conditions (e.g. cancer) and suicide 5

6 1. Colombia: Family Term Life B. Product Assessment 1 Product: Seguro de Vida Ranking 2 Rationale / Comments A Insurance principles applied Fully applied B C D Developing country or emerging market Great majority of insured people or assets from low-income segment No government subsidies of more than 50% Significant contribution to risk management of end customers End-customer receives other tangible benefits (e.g. discounts, lottery etc.) End-customers involved in product development Voluntary opt-in (), voluntary opt-out () or compulsory (-) Customer education and feedback mechanisms in place Simple product specifications (e.g. pre-underwritten, few exclusions) Strong measures to ensure low transaction costs - None Colombia is an emerging market according to S&P and a developing country according to World Bank The MFI distributor targets low-income families, i.e. strata 1-3 of the 6-step Colombian socioeconomic stratification. This can also be seen by the low maximum loan amount of their micro-credit segment of COP 2.3mn (~ USD 1,300) No government subsidies The product protects several family members against death which is a significant risk. Coverage includes pre-existing conditions which allows for the inclusion of more vulnerable people (subject to waiting periods). Workshops were done by the MFI in selected branches to garner input for the product design, especially as previous life insurance offers had not found wide acceptance among customers Fully voluntary for existing customers of the MFI Simple brochures are provided, and because many customers are not fully literate - the bank s staff also gives verbal explanations. Customers receive insurance certificates, have access to a 24/7 hotline and to a special claim help desk Simple product without health declaration. Several plan options exist, so the distinction of which family member has what level of coverage takes time to understand. Certain waiting periods and exclusions exist. Monthly batch processing from MFI to insurer, sales are done complementary on top of other products (credit, savings). A claim help desk and a bank agent help desk achieve streamlining of the service processes Overall ranking C. Product Brochure: not available 1) See our website for a full explanation of our assessment methodology 2) For knock-out criteria A-D: or ; for criteria 1 7: - (0), (1) or (2) 3) Average of criteria 1 7. Minimum 0.0, maximum 2.0. Note: A high ranking is only an indicator for compliance with Allianz microinsurance values, not an indicator for actual business success 6

7 2. Colombia: Home Business A. Product Specifications Product name (generic or marketing name) Product type (e.g. term life, endowment, motorcycle) Seguro de Hogar (Home insurance) Property Company name Allianz Colombia Country Colombia Distribution partner type (e.g. MFIs, banks, coops, retailers) Launch date (and stop date if any) Microfinance Institution (MFI) 1 July sentence product description Voluntary Group Property insurance that covers private homes, including those used for home-based business, against damage to the building and its content arising from various risks such as fire, lightening, flooding, windstorm, civil commotion etc. Group or individual product Group Voluntary opt-in, opt-out or compulsory Covered risks & benefits / sum insured Premium range (min, max) Avg. premium / year (annualize if necessary) Voluntary opt-in Costs of repair or replacement (but not improvement) of home and home content damages due to below risks are covered as follows for Plan 1/Plan 2 respectively A: Fire, lightening, explosion, windstorm (incl. related rains and floods), falling trees, falling aircraft and vehicle crashes: up to COP 20mn/15mn (~ USD 11,000/8,000) B: Water damage, flooding, avalanche and landslides: up to COP 5mn/3mn (~ USD 2,500/1,600) C: Violent strikes, civil commotion and malicious acts by 3rd parties: up to COP 10mn/7.5mn (~ USD 5,000/ 4,000) D: Actions to contain damage, actions of public authorities and debris removal: up to COP 2mn/1.5mn (~ USD 1,100/800) Max. sum insured from all risks per home over the entire life of the policy is COP 20mn (~ USD 11,000), i.e. should the accumulated damages exceed that amount, the excess is not covered and coverage will end Minimum (Plan 2): COP 4,995 (~ USD 2.75) per month Maximum (Plan 1): COP 6,660 (~ USD 3.60) per month COP 67,200 (~ USD 37.00) Other comments The product is only available to active clients of the MFI, i.e. those who have an active credit and/or savings account with that MFI Earthquake risk is not covered, as this is not considered important by customers and would significantly increase the premium A deductible of 10% applies to risks B and C above; risks A and D do not have a deductible 7

8 2. Colombia: Home Business B. Product Assessment 1 Product: Seguro de Hogar Ranking 2 Rationale / Comments A Insurance principles applied Fully applied B C D Developing country or emerging market Great majority of insured people or assets from low-income segment No government subsidies of more than 50% Significant contribution to risk management of end customers End-customer receives other tangible benefits (e.g. discounts, lottery etc.) End-customers involved in product development Voluntary opt-in (), voluntary opt-out () or compulsory (-) Customer education and feedback mechanisms in place Simple product specifications (e.g. pre-underwritten, few exclusions) Strong measures to ensure low transaction costs - None Colombia is an emerging market according to S&P and a developing country according to World Bank The MFI distributor targets low-income families, i.e. strata 1-3 of the 6-step Colombian socioeconomic stratification. This can also be seen by the low maximum loan amount of their micro-credit segment of COP 2.3mn (~ USD 1,300) No government subsidies Several serious risks to home property are covered. The sums insured are high enough to allow microentrepreneurs to quickly get back on their feet and resume their home-run businesses after a claim. The product was developed based on strong customer demand to cater to the insurance needs of small entrepreneurs that borrow from the MFI and often run their business out of their private homes Fully voluntary for existing customers of the MFI Overall ranking C. Product Brochure: not available 1) See our website for a full explanation of our assessment methodology 2) For knock-out criteria A-D: or ; for criteria 1 7: - (0), (1) or (2) 3) Average of criteria 1 7. Minimum 0.0, maximum 2.0. Note: A high ranking is only an indicator for compliance with Allianz microinsurance values, not an indicator for actual business success Simple brochures are provided, and because many customers are not fully literate - the bank s staff also gives verbal explanations. Customers receive insurance certificates, have access to a 24/7 hotline and to a special claim help desk For a property product, design and policy wording are kept relatively simple, with only 2 available coverage plans. Still, time is needed to explain the exact covered risks, the deductibles and the claim procedure. Monthly batch processing from MFI to insurer. No on-site claim inspection needed. A claim help desk and a bank agent help desk achieve streamlining of the service processes 8

9 3. Colombia: Life & Maternity A. Product Specifications Product name (generic or marketing name) Product type (e.g. term life, endowment, motorcycle) Voy Seguro (I go safely) Term Life Company name Allianz Colombia Country Colombia Distribution partner type (e.g. MFIs, banks, coops, retailers) Launch date (and stop date if any) Microfinance Institution (MFI) 1 November sentence product description Voluntary Group Term Life Insurance that also provides maternity benefits to the insured or partner during pregnancy and after birth Group or individual product Group Voluntary opt-in, opt-out or compulsory Covered risks & benefits / sum insured Premium range (min, max) Avg. premium / year (annualize if necessary) Voluntary opt-in Death of the insured due to any cause: COP 4mn basic life benefit COP 600k for food basket COP 500k funeral assistance, i.e. total death benefits of COP 5.1mn (~ USD 2,800) Maternity benefits for insured or partner: COP 400k at 6 months into pregnancy and COP 200k after birth, i.e. total maternity benefits of COP 600k (~ USD 330) Maximum sum assured per person: COP 32mn (~ USD 18,000), e.g. if a client holds multiple policies of this product COP 4,990 per month (~ USD 2.75) One standard plan only; no other premium and benefit options COP 59,880 (~ USD 33.00) Other comments The product is only available to active micro-loan clients of the MFI (the MFI offers no savings services) The food basket and funeral assistance benefits are usually paid out as a cash lump sum together with the basic life insurance benefit 90 days waiting period for pregnancy and minor pre-existing conditions 180 days waiting period for major pre-existing conditions (e.g. cancer) and suicide 9

10 3. Colombia: Life & Maternity B. Product Assessment 1 Product: Voy Seguro Ranking 2 Rationale / Comments A Insurance principles applied Fully applied B C D Developing country or emerging market Great majority of insured people or assets from low-income segment No government subsidies of more than 50% Significant contribution to risk management of end customers End-customer receives other tangible benefits (e.g. discounts, lottery etc.) End-customers involved in product development Voluntary opt-in (), voluntary opt-out () or compulsory (-) Customer education and feedback mechanisms in place Simple product specifications (e.g. pre-underwritten, few exclusions) Strong measures to ensure low transaction costs - None Overall ranking Colombia is an emerging market according to S&P and a developing country according to World Bank The MFI distributor targets low-income families, i.e. strata 1-3 of the 6-step Colombian socioeconomic stratification. This can also be seen by the low average loan amount of their borrowers of COP 2mn (~ USD 1,100) No government subsidies Death is a significant risk and coverage includes preexisting conditions (subject to waiting periods). Moreover, maternity expenses are a very frequent risk even if the related policy benefits are not high. Focus Group Discussions with the MFI customers have strongly influenced the product, for example that the larger part of the maternity benefits is already paid out at 6 months pregnancy. This allows the expectant mothers to prepare in time for the delivery and post-natal phase. Fully voluntary option that can be added to the MFIs credit offering Customers receive verbal explanations from the bank s staff. Brochures are not used as customers are often semiliterate. Customers receive insurance certificates, have access to a 24/7 hotline and to a special claim help desk Simple, easy to understand product design with only one available standard plan. No health declaration required. However, certain waiting periods and exclusions exist. Monthly batch processing from MFI to insurer, sales are done complementary on top of other products (credit, savings). A claim help desk and a bank agent help desk achieve streamlining of the service processes C. Product Brochure: not available 1) See our website for a full explanation of our assessment methodology 2) For knock-out criteria A-D: or ; for criteria 1 7: - (0), (1) or (2) 3) Average of criteria 1 7. Minimum 0.0, maximum 2.0. Note: A high ranking is only an indicator for compliance with Allianz microinsurance values, not an indicator for actual business success 10

11 4. Ivory Coast: Mobile Funeral A. Product Specifications Product name (generic or marketing name) Product type (e.g. term life, endowment, motorcycle) Allianz Obsèques Term life insurance Company name Allianz Côte d Ivoire Assurance Vie Country Ivory Coast Distribution partner type (e.g. MFIs, banks, coops, retailers) Launch date (and stop date if any) Telecommunication company 1 June sentence product description Voluntary group life insurance for mobile money account holders of the partnering telecommunication company; coverage includes protection against death due to all causes and total permanent disability Group or individual product Group Voluntary opt-in, opt-out or compulsory Covered risks & benefits / sum insured Premium range (min, max) Avg. premium / year (annualize if necessary) Voluntary opt-in Natural death or total permanent disability: FCFA 500,000 (~ USD 900) Accidental death: FCFA 1,000,000 (~ USD 1,800) Part of the death benefit (up to 100%) can be chosen as direct payment to a designated funeral home to cover funeral expenses (i.e. in kind benefit) FCFA 8,000 (~ USD 14) for yearly or FCFA700 (~ USD 1.3) for monthly payment; premiums are automatically deducted from mobile money account FCFA 8,400 (~ USD 15), based on the fact that most insured choose the monthly premium payment option Other comments Age limits are 21 to 65, with disability coverage expiring at age 61 Enrollment still happens by physical form filling at the telco s outlets, but premium payment is only possible through mobile money Multiple enrollments are not allowed 11

12 4. Ivory Coast: Mobile Funeral B. Product Assessment 1 Product: Allianz Obsèques Ranking 2 Rationale / Comments A Insurance principles applied Fully applied B Developing country or emerging market Ivory Coast, after 10 years of civil war and a political crisis in 2011, is more still very much a developing country C Great majority of insured people or assets from low-income segment The vast majority of the population of Ivory Coast is low income and the low sums insured also only appeal to lowincome segments D No government subsidies of more than 50% No government subsidies Significant contribution to risk management of end customers End-customer receives other tangible benefits (e.g. discounts, lottery etc.) End-customers involved in product development - None - No Death is a significant risk for low-income families in Ivory Coast. Optional direct payment of a part of the benefit to funeral homes helps to insure proper payout usage. The payout to annual premium ratio of 60 is decent 4 Voluntary opt-in (), voluntary opt-out () or compulsory (-) Fully voluntary. Moreover, the monthly premium payment option allows for cash-flow friendly payment 5 Customer education and feedback mechanisms in place Customers receive a physical insurance certificate, additional information via SMS and have access to a 8/5 hotline of the insurer 6 Simple product specifications (e.g. pre-underwritten, few exclusions) Policy terms and exclusions are much simplified. No health underwriting and waiting period 7 Strong measures to ensure low transaction costs Premium collection through auto-debit from mobile money accounts is very efficient Overall ranking ) See our website for a full explanation of our assessment methodology 2) For knock-out criteria A-D: or ; for criteria 1 7: - (0), (1) or (2) 3) Average of criteria 1 7. Minimum 0.0, maximum 2.0. Note: A high ranking is only an indicator for compliance with Allianz microinsurance values, not an indicator for actual business success 12

13 4. Ivory Coast: Mobile Funeral C. Product Brochure Front 13

14 4. Ivory Coast: Mobile Funeral C. Product Brochure Back 14

15 5. India: Life Savings A. Product Specifications Product name (generic or marketing name) Product type (e.g. term life, endowment, motorcycle) Sarve Shakti Suraksha (SSS) 5-year term life insurance with systematic savings incorporated Company name Bajaj Allianz Life Insurance Company Limited Country India Distribution partner type (e.g. MFIs, banks, coops, retailers) Launch date (and stop date if any) Non-bank Microfinance Institutions (MFIs), Regional Rural Banks, Banking Correspondents, Customer Support Centers, Cooperatives Launch date: April 2008 Stop date: effective August 2013, this product has been closed for the issuance of new group policies, due to regulatory changes New members could still enroll under existing group policies until latest July 2014 Now completely closed for new business and phasing out over the next 5 years until sentence product description A combination of term insurance and systematic savings benefits designed to provide risk protection as well as alternative savings opportunities The product term is 5 years Group or individual product Group Insurance Voluntary opt-in, opt-out or compulsory Covered risks & benefits / sum insured Premium range (min, max) Avg. premium / year (annualize if necessary) Voluntary opt-in Sum Insured: Minimum INR 2500 (~ USD 50), no limit on maximum coverage (Subject to underwriting limits) Risks covered: Natural and accidental death disability Minimum INR 500 (~ USD 10) per annum no limit on maximum premium INR 1,750 (~ USD 35) Other comments The product has won numerous awards, including the Skoch Award for Financial Inclusion 2011 &

16 5. India: Life Savings B. Product Assessment 1 Product: Sarve Shakti Suraksha (SSS) Ranking 2 Rationale / Comments A Insurance principles applied Fully applied B Developing country or emerging market India is an emerging market according to S&P and a developing country according to World Bank C Great majority of insured people or assets from low-income segment Majority of the premiums collected for this product are under INR 2,000 (~ USD 40) per year D No government subsidies of more than 50% All premiums are paid by the customer. There is no premium subsidy Significant contribution to risk management of end customers End-customer receives other tangible benefits (e.g. discounts, lottery etc.) End-customers involved in product development - None - No SSS offers life coverage and a savings feature but claims and especially savings balances are relatively small, even for low-income Indians. Moreover, in case of RBBs outstanding loan balances are deducted first 4 Voluntary opt-in (), voluntary opt-out () or compulsory (-) It is a voluntary opt-in. In some cases premium amounts are also bundled with the loan installments to make the product affordable. However, there is no compulsion from the distribution partner s side at any point in time 5 Customer education and feedback mechanisms in place Allianz hotline printed on every brochure and policy document. A systematic Value for the Customer education initiative has been put in place, too 6 Simple product specifications (e.g. pre-underwritten, few exclusions) Guaranteed issuance except where questions on the health declaration are marked as affirmative. Only exclusion: Suicide not covered in year 1 7 Strong measures to ensure low transaction costs The delivery channel fully integrates the product into existing business processes. Collection is often aligned with loan repayment. Other operational tasks are also outsourced Overall ranking C. Product Brochure: not available 1) See our website for a full explanation of our assessment methodology 2) For knock-out criteria A-D: or ; for criteria 1 7: - (0), (1) or (2) 3) Average of criteria 1 7. Minimum 0.0, maximum 2.0. Note: A high ranking is only an indicator for compliance with Allianz microinsurance values, not an indicator for actual business success 16

17 6. Indonesia: Credit Life Plus (additional brochure added, see page 20) A. Product Specifications Product name (generic or marketing name) Product type (e.g. term life, endowment, motorcycle) Payung Keluarga (Family Umbrella) Company name Allianz Indonesia Country Indonesia Distribution partner type (e.g. MFIs, banks, coops, retailers) Launch date (and stop date if any) Term Life (attached to credit accounts), with riders Banks, MFIs 1 Sep 2006 for base product 27 Nov 2013 for riders 1-sentence product description Compulsory group credit life coverage (conventional or takaful) with flexible benefits and voluntary add-on riders Group or individual product Group Voluntary opt-in, opt-out or compulsory Covered risks & benefits / sum insured Premium range (min, max) Avg. premium / year (annualize if necessary) Compulsory for base product (with benefit package pre-configured by MFI), and voluntary for add-on riders Base Product: Risk: Death of debtor and spouse (optional) Benefit: Outstanding loan balance, or original loan amount Additional funeral benefit of up to 2x original loan (optional) Loans: IDR 0 max. 200mn (~ USD 0-20,000) Riders (since Dec-2013): Personal Accident for accidental death and total or partial permanent disability, with benefits of up to IDR 25,000,000 (~ USD 2,500) - pro-rated for partial disability Home Insurance for fire; with relocation benefits up to IDR 5,000,000 (~ USD 500) and additional accidental death benefit of up to IDR 5,000,000 (~ USD 500) Hospital Cash; with daily lumpsum of up to IDR 250,000 (~ USD 25) from 1st day of hospitalization, for max. 180 days, and max. IDR 2,500,000 (~ USD 250) of surgery benefits Base Product: IDR 100 to 1mn (~ USD ), depending on loan amount, tenor & benefits Riders (annualized premium, as coverage runs as long at the loans): Personal Accident: IDR 8,000 20,000 (~ USD 0.8 2) Home Insurance: IDR 5,000 30,000 (~ USD 0.5 3) Hospital Cash: IDR 100, ,000 (~ USD 10 25) Base Product: IDR 12,000 (~ USD 1.3) Riders: n.a. Other comments Base product is modular, with theoretically 54 different benefit configurations for MFIs to choose from Additional resources Case Study: How Allianz Indonesia reached over 1 million with microinsurance (Allianz 2013) 17

18 6. Indonesia: Credit Life Plus B. Product Assessment 1 Product: Payung Keluarga Ranking 2 Rationale / Comments A Insurance principles applied Applied B Developing country or emerging market Indonesia is an emerging market according to S&P and a developing country according to World Bank C Great majority of insured people or assets from low-income segment 98% of insured loans are under IDR 5mn (~ USD 550). This serves as a reliable proxy for majority low income customers D No government subsidies of more than 50% No government subsidies Significant contribution to risk management of end customers End-customer receives other tangible benefits (e.g. discounts, lottery etc.) End-customers involved in product development Voluntary opt-in (), voluntary opt-out () or compulsory (-) - None Death of a breadwinner is a significant risk to low-income families in Indonesia. Although most loans are covered for the outstanding balance only, 20% of them also carry some cash payout to the families. Voluntary riders add further flexibility to customers to manage various other risks. Extensive market research was done to understand the target market. Life risk was only the top4 identified customer risk. The voluntary hospital cash rider, though, addresses the top1 identified customer risk of sickness. The base credit life cover is compulsory for customers as per the MFIs benefit configuration. However, the additional riders can be taken by customers on voluntary basis. 5 Customer education and feedback mechanisms in place Brochures are provided by some MFIs. Other MFIs distribute member cards instead. MFI staff is also equipped with flip-charts to explain the product on the spot. Direct helpline and Allianz address are not provided, except for the rider products. No systematic feedback collection. 6 Simple product specifications (e.g. pre-underwritten, few exclusions) Free coverage limit up to IDR 10mn (~ USD 1,100). Only 2 exclusions: Suicide and insurance related crime ( age limit 17-60) 7 Strong measures to ensure low transaction costs Product, distribution and collection are fully integrated with MFI micro loans, including for riders. Most of the data entry and claims handling is also outsourced to the MFIs Overall ranking ) See our website for a full explanation of our assessment methodology 2) For knock-out criteria A-D: or ; for criteria 1 7: - (0), (1) or (2) 3) Average of criteria 1 7. Minimum 0.0, maximum 2.0. Note: A high ranking is only an indicator for compliance with Allianz microinsurance values, not an indicator for actual business success 18

19 6. Indonesia: Credit Life Plus C. Product Brochure Compulory base product Member Card as alternative to brochure Front Back 19

20 6. Indonesia: Credit Life Plus C. Product Brochure Voluntary add-on riders (NEW) 20