Microinsurance Product Pool

Transcription

1 Microinsurance Product Pool Overview and assessment of Allianz microinsurance products Allianz SE Emerging Consumers April 2016 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 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 updated updated new new updated # Country Company 1 Colombia 2 Colombia 3 Colombia 4 5 Ivory Coast Madagascar 6 India 7 Indonesia 8 Indonesia 9 Ivory Coast 10 India 11 India 12 India 13 Malaysia West Africa & Egypt West Africa Allianz Colombia Allianz Colombia Allianz Colombia Allianz Africa Allianz Africa Bajaj Allianz Life Allianz Life Allianz Life Allianz Africa Bajaj Allianz Life Bajaj Allianz General Bajaj Allianz Life Allianz General Product Name Family Term Life Home Business Life & Maternity Mobile Funeral Mobile Term Life Insurance principles Dev. Country or EM Low-income focus No subsidies >50% Strong Risk Mgmt Other benefits Customers involved Life Savings - - Credit Life Plus Term Life Funeral Insurance Life Savings Crop Index Voluntary Customer education Group Term Life - - Motorcycle PA 2 Allianz Africa Credit Life - Allianz Africa Crop Index 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 Product simplicity Low transaction costs Quality rank avg. c1-c7 Details on page

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 updated 16 Burkina Allianz Africa 17 India 18 India Bajaj Allianz General Bajaj Allianz General Savings- Life Cattle & Livestock - - Personal Accident Phased out products since last update April 2015 # Country Company 1 Indonesia Allianz General Product Name Knock-out criteria: "Can we call it micro?" Qualitative criteria: "How well aligned with our microinsurance values?" A B C D Scratch- card PA Quality rank avg. c1-c7 1.1 Reason for phase out Replaced by Si Peci product Non-qualifying products due to failing on criteria A - D # Country Company 1 Ivory Coast 2 Malaysia Allianz Africa Allianz Life General Product Name Mobile Savings Life & PA 2 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 not micro not micro 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 Details on page

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 1,000 to 5,000) Funeral benefit to member and 4 freely chosen close relatives (which can include the partner): up to maximum COP 3mn (~ USD 1,000) for all premium plans. Benefit expires after 2 death cases Maximum sum assured per person: COP 30mn (~ USD 10,000), e.g. if a client has multiple policies of this product Minimum COP 9,960 per month (~ USD 3.50) for minimum benefits for single insured and 4 relatives Maximum COP 42,068 per month (~ USD 15.00) for maximum benefits for insured, partner and 4 relatives COP 122,880 (USD ~ 45.00) 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 C. Product Brochure: not available - 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 800) 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 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 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 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 Institutions (MFIs) 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 of home and home content damages due to below risks are covered as follows and up to the given maximum values. Maximum values may differ per MFI and the highest value applied to any MFI is listed below: A: Fire, lightening, explosion, windstorm (incl. related rains and floods), falling trees, falling aircraft and vehicle crashes: up to COP 20mn (~ USD 7,000) B: Water damage, flooding, avalanche and landslides: up to COP 15mn (~ USD 5,000) C: Violent strikes, civil commotion and malicious acts by 3rd parties: up to COP 15mn (~ USD 5,000) D: Actions to contain damage, actions of public authorities and debris removal: up to COP 2mn (~ USD 700) E: Earthquake, volcanic eruption and tsunami (only applicable at some MFI): up to COP 15mn (~ USD 5,000) Max. sum insured from all risks per home over the entire life of the policy is COP 20mn (~ USD 7,000), i.e. should the accumulated damages exceed that amount, the excess is not covered Minimum: COP 4,995 (~ USD 1.70) per month Maximum: COP 6,700 (~ USD 2.30) per month COP 78,000 (~ USD 25) 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 800) 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 1,800) 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 600,000 (~ USD 210) Maximum sum assured per person: COP 32mn (~ USD 11,000), e.g. if a client holds multiple policies of this product COP 4,990 per month (~ USD 1.70) One standard plan only; no other premium and benefit options COP 59,880 (~ USD 20) 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 C. Product Brochure: not available 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 2.3mn (~ USD 800) No government subsidies 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 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 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: XOF 500,000 (~ USD 840) Accidental death: XOF 1,000,000 (~ USD 1,700) 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) XOF 8,000 (~ USD 15) for yearly or XOF 700 (~ USD 1.20) for monthly payment; premiums are automatically deducted from mobile money account XOF 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 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 Premium collection through auto-debit from mobile money accounts is very efficient 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. Madagascar: Mobile Term Life (Updated) A. Product Specifications Product name (generic or marketing name) Product type (e.g. term life, endowment, motorcycle) Airtel Antoka Enhanced Mobile Term Life Company name Allianz Africa Country Burkina Faso and Madagascar Distribution partner type (e.g. MFIs, banks, coops, retailers) Launch date (and stop date if any) Airtel telecommunication company, with MicroEnsure as service provider June sentence product description In its current first phase, the product provides free cover for (a) death due to all causes, (b) total permanent disability due to accident, and (c) a lump sum hospital cash benefit for inpatient stays of minimum 3 days. Sums insured are linked to airtime consumption ( the more you call the more cover you get ). Premiums are paid by Airtel as a loyalty scheme In a second phase (still to be launched), sums insured will double, a flat standard monthly fee to customers will be added, and customers will be able to enroll another family member (against extra premium). Group or individual product Group Voluntary opt-in, opt-out or compulsory Covered risks & benefits / sum insured Voluntary opt-in Sums insured depend on the previous month s airtime consumption Death due to all causes and Total Permanent Disability due to accident: Phase 1: MGA 100,000 1mn (~ USD ) Phase 2: MGA 100,000 2mn (~ USD ) Hospital cash lump sum, paid for every hospital stay of min. 3 days: Phase 1: MGA 15,000 50,000 (~ USD ) Phase 2: MGA 15, ,000 (~ USD ) Premium range (min, max) Avg. premium / year (annualize if necessary) Phase 1: free, starting from min. previous month s airtime consumption of MGA 3,500 (~ USD 0.95) and max. sum insured reached if previous month s airtime consumption is MGA 20,000 (~ USD 6.50) or more Phase 2: MGA 1,500 (~ USD 0.45) for 1 person or MGA 3,000 (~ USD 0.95) for 2 persons per month with no min. airtime and max. sum insured reached if previous month s airtime is min. MGA 20,000 (~ USD 6.50) Phase 1: free Phase 2: MGA 21,600 (~ USD 7.00), i.e. average MGA 1,800 (~ USD 0.55) per month Other comments In phase 2, if customers don t choose at least the MGA 1,500 (~ USD 0.45) monthly plan (i.e. 1 person), all coverage will stop Even in phase 2, benefits will continue to increase with the previous month s airtime consumption regardless of the flat membership fee In cooperation with MicroEnsure 15

16 5. Madagascar: Mobile Term Life (Updated) B. Product Assessment 1 Product: Airtel Antoka Ranking 2 Rationale / Comments A Insurance principles applied Fully applied B C D 1 2 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.) - None Madagascar is a developing country according to World Bank With its small sums insured and eligibility limited to prepaid airtime customers only (instead of the generally betteroff post-paid customers), it can be safely assumed that the great majority of insured is low-income No subsidies Of the three covered risks (death, accidental disability and hospitalization) at least death and hospitalization can be considered a high risk to most, especially for low income people to whom the sums insured are meaningful 3 End-customers involved in product development - No 4 Voluntary opt-in (), voluntary opt-out () or compulsory (-) Voluntary opt-in 5 Customer education and feedback mechanisms in place Giving the product away for free in its initial launch phase carries a strong learning by doing element, i.e. a form of customer education. Moreover, a 24h toll-free hotline is available for inquiries. 6 7 Simple product specifications (e.g. pre-underwritten, few exclusions) Strong measures to ensure low transaction costs 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 Enrollment is straight forward through USSD with few questions asked, on the spot acceptance. Exclusions are minimal. Claim requirements are also reduced to an absolute and flexible minimum. Fully digital enrollment and (in phase 2) digital collection, plus simplified processes and documentation requirements allow for efficient, low-cost mass-scale administration 16

17 5. Madagascar: Mobile Term Life (Updated) C. Product Brochure 17

18 6. 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 Last policies will mature in 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 40), no limit on maximum coverage (Subject to underwriting limits) Risks covered: Natural and accidental death disability Minimum INR 500 (~ USD 7.50) per annum no limit on maximum premium INR 1,750 (~ USD 25) Other comments The product has won numerous awards, including the Skoch Award for Financial Inclusion 2011 &

19 6. 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 30) 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 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 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 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 Allianz hotline printed on every brochure and policy document. A systematic Value for the Customer education initiative has been put in place, too Guaranteed issuance except where questions on the health declaration are marked as affirmative. Only exclusion: Suicide not covered in year 1 The delivery channel fully integrates the product into existing business processes. Collection is often aligned with loan repayment. Other operational tasks are also outsourced 19

20 7. Indonesia: Credit Life Plus (Updated) 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 a voluntary personal accident 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 Mandatory 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 0-15,000) Voluntary rider (since Dec-2013): Personal Accident for accidental death and total or partial permanent disability, with benefits of up to IDR 25,000,000 (~ USD 1,800) - 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 Mandatory base Product: IDR 100 to 1mn (~ USD ), depending on loan amount, tenor & benefits Voluntary rider (annualized premium, coverage runs as long as loan): Personal Accident: IDR 8,000 20,000 (~ USD ) 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 0.90) Rider: n.a. Other comments Base product is modular, with theoretically 54 different benefit configurations for MFIs to choose from Additional resources MILK Doing the Math - Brief no 36 (Microinsurance Centre 2015) Case Study: Escaping the credit life gap (Allianz 2015) Case Study: How Allianz Indonesia reached over 1 million with microinsurance (Allianz 2013) 20

21 7. Indonesia: Credit Life Plus (Updated) 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 370). 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. The voluntary personal accident rider adds further flexibility to customers. 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 rider can be taken by customers on voluntary basis Customer education and feedback mechanisms in place Simple product specifications (e.g. pre-underwritten, few exclusions) Strong measures to ensure low transaction costs 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 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 product. No systematic feedback collection. Free coverage limit up to IDR 10mn (~ USD 730). Only 2 exclusions: Suicide and insurance related crime ( age limit 17-65) 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 21

22 7. Indonesia: Credit Life Plus (Updated) C. Product Brochure Compulory base product Member Card as alternative to brochure Front Back 22

23 7. Indonesia: Credit Life Plus (Updated) C. Product Brochure Voluntary add-on rider Front Back 23

24 8. Indonesia: Term Life (New) A. Product Specifications Product name (generic or marketing name) Product type (e.g. term life, endowment, motorcycle) Si Peci (abreviation of Asuransi Penuh Cinta or Insurance filled with Love) Term Life Insurance Company name Allianz Indonesia Country Indonesia Distribution partner type (e.g. MFIs, banks, coops, retailers) Launch date (and stop date if any) Microfinance Institutions (MFIs), Allianz Agents 1 July sentence product description Simple term Life insurance with guaranteed acceptance in voucher format that has a one year duration and one-time premium of IDR 50,000 (~ USD 3.70). The policy is activated by sending a unique activation code printed on the voucher card via SMS to Allianz and coverage is immediately confirmed by Allianz via SMS as well. Group or individual product Individual Voluntary opt-in, opt-out or compulsory Covered risks & benefits / sum insured Premium range (min, max) Voluntary opt-in Risk covered: Death due to all causes Sum insured: Natural Death: IDR 5mn (~ USD 370) Accidental Death: IDR 25mn (~ USD 1,800) All vouchers cost IDR 50,000 (~ USD 3.70) and are valid for one year Avg. premium / year (annualize if necessary) IDR 50,000 (~ USD 3.70) Other comments Si Peci is a standard product that was developed under the guidance of AAJI, the Indonesian Life Insurance Association, and is currently marketed by a number of Indonesian life insurance companies. Only one Si Peci policy can be bought and activated per person. This product replaced the previous Kartu Proteksiku scratch-card Personal Accident product of Allianz. 24

25 8. Indonesia: Term Life (New) B. Product Assessment 1 Product: Si Peci Ranking 2 Rationale / Comments A Insurance principles applied Fully 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 D Great majority of insured people or assets from low-income segment No government subsidies of more than 50% No government subsidies Product is mainly distributed through MFIs that focus on low-income customers. Moreover, the product was specifically developed as a microinsurance product by the Indonesian Life Insurance Association. 1 Significant contribution to risk management of end customers Death is a significant risk for low-income families in Indonesia. The sum insured for natural death is meaningfully high and the payout to annual premium ratio of 100 for natural death is good 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 - No. During the product development process, the Indonesian Life Insurance Association did not carry out direct customer research. It relied on the input and experience of its member insurance companies. 100% voluntary 5 Customer education and feedback mechanisms in place Customer receives full policy wording as booklet and a handy insurance card to be put in wallet, including Allianz service number and address. 6 7 Simple product specifications (e.g. pre-underwritten, few exclusions) Strong measures to ensure low transaction costs 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 Simple-to-understand product benefits, costs and product format (voucher); automatic acceptance via SMS with only two exclusions (suicide and insurance related crime). SMS activation and single premium payment minimize distribution and collection costs. Claim settlement is traditional. No integrated IT system. 25

26 8. Indonesia: Term Life (New) C. Product Brochure Insurance Voucher - Front Insurance Voucher - Back Brochure 26

27 9. Ivory Coast: Funeral Insurance A. Product Specifications Product name (generic or marketing name) Product type (e.g. term life, endowment, motorcycle) Assurance Obséques (Funeral Insurance) Funeral Insurance Company name Allianz Ivory Coast Country Ivory Coast Distribution partner type (e.g. MFIs, banks, coops, retailers) Launch date (and stop date if any) Microfinance Institutions (MFIs) October sentence product description Payment of a lump sum in case of death due to any cause, with variable options (accidental death, education grant for children, family coverage); exact offering may vary per MFI Group or individual product Group Voluntary opt-in, opt-out or compulsory Covered risks & benefits / sum insured Premium range (min, max) Voluntary opt-in Death: lump sum from XOF 300,000 to 2,000,000 (~ USD 500 3,400), depending on selected benefit plan With some MFIs, spouse, children, and parents can be selectively added to coverage the death benefit is doubled in case of accidental death the insured can choose to have approx. 60% of the death benefit paid directly to an undertaker a supplementary education rider can be added, which provides additional XOF 250,000 to 500,000 (~ USD ) for 4 to 6 months as school fees payment (depending upon chosen option) From XOF 5,000 to 92,000 (~ USD ) per year An additional XOF 1,000 (~ USD 1.70) one time subscription fee is charged Avg. premium / year (annualize if necessary) Other comments None XOF 22,000 (~ USD 35) 27

28 9. Ivory Coast: Funeral Insurance B. Product Assessment 1 Product: Assurance Obséques 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 still very much a developing country C Great majority of insured people or assets from low-income segment The customers of the MFI distribution partners are lowmedium segment, with at least 80% of the insured belonging to the 60% of population with the lowest incomes D No government subsidies of more than 50% Premiums are not subsidized 1 Significant contribution to risk management of end customers Funerals are a significant expense in Ivory Coast, and the product significantly contributes to covering these. Family and parents can be covered as well at very competitive pricing. The possibility to add an education rider gives further options to customize the product to customer needs. 2 End-customer receives other tangible benefits (e.g. discounts, lottery etc.) - No tangible other benefits. But with some MFIs the insured has the option that part of the payout is paid to the undertaker to ensure a proper funeral, no matter what 3 4 End-customers involved in product development Voluntary opt-in (), voluntary opt-out () or compulsory (-) - No customer studies 100% voluntary Customer education and feedback mechanisms in place Simple product specifications (e.g. pre-underwritten, few exclusions) Strong measures to ensure low transaction costs 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 Simple language brochures are provided. Some MFIs also give Allianz contact details on their brochures. No service hotline and systematic collection of customer feedback. Simple base product, with simple add-on options (e.g. education rider), no medical selection The MFIs takes charge of distribution, subscription, data and premiums collection, and parts of the claims process. This significantly lowers costs 28

29 9. Ivory Coast: Funeral Insurance C. Product Brochure MFI1 Outside Inside 29

30 9. Ivory Coast: Funeral Insurance C. Product Brochure MFI2 Front Back 30

31 10. India: Life Savings (new) A. Product Specifications Product name (generic or marketing name) Product type (e.g. term life, endowment, motorcycle) CSC Bachat Plus (CSC Savings Plus) Variable Life Insurance Plan Company name BajajAllianz Life Insurance Company Limited Country India Distribution partner type (e.g. MFIs, banks, coops, retailers) Launch date (and stop date if any) CSCs only, i.e. Common Service Centers. Under CSC, a special purpose vehicle has been formed to enable services through the CSC network. These centres offer public and private services, such as private financial services like insurance, via a fully digitalized platform. There are now over 200,000 CSCs in India. 26 August sentence product description Life insurance with regular premium contributions, the larger share of which will accumulate as a savings value (Policy Account Value) and the smaller share of which will be used to pay the Life insurance cover and administration; at policy maturity, customers will receive more back than they paid in gross premiums. Group or individual product Individual Voluntary opt-in, opt-out or compulsory Covered risks & benefits / sum insured Voluntary opt-in Risk covered: Death due to all causes of policyholder Sum insured: between INR 12,600 (~ USD 190) and INR 200,000 (~ USD 3,100) Maturity Benefit: Policy Account Value, i.e. net paid premiums credited with 1% guaranteed interest rate every year and additional interest rate of 4% (years 1 5) or 0.5% (years 6); guaranteed minimum maturity benefit is gross paid premiums (less any withdrawals) compounded at 1% per year Premium range (min, max) Avg. premium / year (annualize if necessary) Minimum INR 150 (~ USD 2.30) per month or INR 1,800 (~ USD 30) if yearly mode Maximum INR 1,665 per month (~ USD 25) or INR 20,000 (~ USD 310) if yearly mode INR 2,000 (~ USD 30) per year Other comments CSC-labeled products fall under a special CSC guideline of the Indian insurance regulator. They can only be distributed through the CSC network. Other distribution channels are not allowed. All products to be sold from these CSC outlets have to be pre-fixed with the name CSC. 31

32 10. India: Life Savings (new) B. Product Assessment 1 Product: CSC Bachat Plus Ranking 2 Rationale / Comments A Insurance principles applied Fully applied to the risk portion of the product. There is also an interest bearing savings component. 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 - India is an emerging market according to S&P and a developing country according to World Bank Majority of the premiums collected for this product are under INR 2,300 (~ USD 35) per year All premiums are paid by the customer. There is no premium subsidy CSC Bachat Plus offers the double benefit of life coverage and a savings feature with clear guarantees. The sums insured and maturity values are high enough to make a difference for low-income Indians. No. The regulations on CSC products by the insurance supervisor leave little room for product feature flexibility. Customer involvement could therefore only have little impact on product design. 100% voluntary 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 There is no direct customer education from the company to customers in place. However, in order to obtain their necessary insurance sales license, CSC sales staff need to undergo 20 hours of training to educate customers on the product. Contact numbers for complaints are clearly provided, and complaints are tracked and reported on as required by the regulator. For a variable insurance plan, the product is relatively simple. However, an understanding of interest rate guarantees is required. Regulations lead to a few rather complex definitions, e.g. of the exact Sum Assured at Death. CSC products piggy-back on the fully digitalized CSC infrastructure of over 200,000 CSCs in India. This ensures low operational costs, transparent digital processes and good accessibility for customers, even in rural areas. 32

33 11. India: Crop Index A. Product Specifications Product name (generic or marketing name) Product type (e.g. term life, endowment, motorcycle) Weather Protect Index Insurance Company name BajajAllianz General Insurance Co. Ltd. Country India Distribution partner type (e.g. MFIs, banks, coops, retailers) Launch date (and stop date if any) Banks March sentence product description This insurance is subsidized by the public Indian WBCIS scheme (Weather-Based Crop Insurance Scheme) and covers loan-taking smallholder farmers against adverse weather conditions through weather related index insurance. The more adverse the index, e.g. below-average rainfall, the higher the likely losses for the farmer and the higher the insurance payout. up to a maximum sum insured Group or individual product Individual Voluntary opt-in, opt-out or compulsory Covered risks & benefits / sum insured Premium range (min, max) Avg. premium / year (annualize if necessary) Compulsory (tied to agricultural loans) Cover: Adverse behavior of a weather index (as a proxy for actual losses) with payouts starting from a pre-defined trigger point (strike) and proceeding in notional steps until a pre-defined exit point, at which the maximum sum insured would be paid Several weather indices can be used, e.g. rainfall (excess, deficit, dry spells), temperature (high/low), humidity, wind speed or any other measurable weather parameter The trigger, exit and sum insured depend on the location, season, crop, claim experience and business potential Sum insured is equal to the loan amount Avg. loan size is INR 15,000 30,000 (~ USD ) for food crops and INR 20, ,000 (~ USD 310 1,500) for cash crops Per hectare: INR 250 to 1,000 (~ USD ) Per loan: 5-12% of loan for rainy season crop and 4-8% for winter season crop Around INR 1,700 (~ USD 25) per loan for food crops and INR 5,000 (~ USD 75) per loan for cash crops Annualization is not applicable because coverage only runs 3.5 months Other comments This product carries public premium subsidies in the range of 30% 75% under the WBCIS scheme This assessment only relates to the portion of the portfolio where subsidies do not exceed 50% If subsidies exceed 50%, Allianz Group s microinsurance definition does not consider it as micro-insurance but rather as social protection schemes. It is excluded from microinsurance reporting The product is also available on voluntary basis. However, this option plays a marginal role 33