Health Microinsurance -A Case Study in Kenya-

Transcription

1 Health Microinsurance -A Case Study in Kenya- International Congress for Actuaries, 7-12 March 2010, Cape Town, South Africa Charles Mutua Regional Consultant Financial Services Swedish Cooperative Centre

2 Presentation Outline Kenyan Insurance Market A case on Health Microinsurance Partnerships Member Benefits Suggestions for Scale up

3 Kenya s Insurance Market Reinsurance companies 2 Insurance Companies 44 Insurance Brokers 200 Insurance Agents 4000 Gross direct premium (Dec 08) US$ 726M Total Assets US$ 2 Billion Penetration rate 2.64%

4 A Case on Health Microinsurance The Health Sector policy in Kenya revolves around two critical issues: How to deliver a basic package of quality health services to a growing population How to finance and manage health services in a way that guarantees their availability, accessibility and affordability to those in need of them. However, the reality on the ground is the extreme opposite. A greater percentage of the Kenyan population do not have access to quality and affordable health care. The available and reliable health care management facilities are designed for the upper market and are thus expensive to the majority of the low-income population

5 Cont d CIC Insurance Company in Partnership with NHIF sought to bridge the gap by providing a composite product that covers the following: Comprehensive medical cover (Inpatient) Life (Accidental death & Disability) Loss of income Funeral expense An outpatient component is being pilot tested***

6 Benefits Structure Medical cover is accessed at mission, low cost and government hospitals (over 300 hospitals countrywide) Ensures there are no deposits required at admission Pays Maternity costs for Normal Births Pays all doctors fees Pays bed charges including food Pays for X-ray and laboratory costs Pays for all prescribed drugs and dressing Pays ICU charges Pays for treatment of chronic and pre-existing medical conditions Has no HIV&AIDS exclusion Exclusions Surgery - However, the Insured pays the first US$ 187 only, but no additional cost

7 Benefits Structure Description Value Comprehensive Medical cover Loss of income for the Principal (during hospitalization) Unlimited amount (180 days/annum per family) US$ 25 per week (max 25 weeks) Permanent disability for the principal US$ 1250 Accidental Death of the principal US$ 1250 Funeral Expenses for the principal US$ 375 Extension of funeral benefit to other family members US$ 3.3 spouse US$ 2.6 child

8 MSPs Customers (policy holders) Distribution/Service delivery Life & funeral cover Opportunity For MSPs Payment Systems MFIs CIC SACCOs NHIF Groups Agents/Brokers Hospitals Medical cover (Health)

9 Marketing Mainly done through the delivery channels using their staff Each delivery channel has a product champion Supplemented by use of print and electronic media (especially vernacular radio stations) Prints brochures, fliers, posters

10 Technology Use of Mobile phones for premium payments (through Kenya s MPesa services) PoS devices for data transfer as well as payment

11 Outreach Current policy holders 17,000 families (85,000 people) Projected by end ,000 families (1 Million people)

12 Claims Ratio High on medical 70% Low on life 30% We are monitoring this statistics to review the product benefit structure for optimal returns/claims

13 Partnerships Public/Private Partnership BYJ -Life (Accidental death & Disability) -Loss of income -Funeral expense -Comprehensive medical cover (Inpatient)

14 Benefits Strategic alliances like this create synergy and value that would otherwise be missing with singular institutional approaches Brings product costs down BYJ is only USD 50! Opportunity to use existing expansive infrastructure Bigger voice for lobbying and advocacy for policy making Increased outreach because of the wide constituent of members Opportunity to strengthen institutional brands

15 Benefits to Members Testimonial Lameck and his wife Faith live in a rented room divided by a curtain in Huruma, a suburb East of Nairobi. Lameck makes a living by selling second hand shoes at the Gikomba market in the same area. As soon as Lameck heard about the Bima ya Jamii insurance he was impressed. They spoke about how the insurance would help them pay for hospital bills and how it would take care of the family if there were any problems. Before, I had never thought about buying insurance. I was more preoccupied with paying the existing bills. But since my wife was expecting a baby I had started to think differently. No one else but God knows what will happen tomorrow, says Lameck. Their first son, Ian, was born just before the New Year and there were unforeseen complications during the delivery. The hospital visit cost USD 270 a lot of money for the family it s the equivalent of approximately four months of expenses. The usual way to get money for unforeseen expenses is to ask ones family, friends, neighbours or your own SACCO for help. It is quite embarrassing to go around asking for money Bima ya Jamii is the best! Lameck says and laughs. To be on the safe side, Lameck had saved money before the birth was due. He wasn t sure that the insurance would work. He will now use the savings to pay for his son s school fees in the future. Lameck describes his satisfaction as follows: I felt like I had eaten a whole goat when the insurance company (Cooperative Insurance Company of Kenya) told me that I didn t need to pay anything.

16 Benefit to Members Easy access to healthcare Cover against life shocks brought about by ill-health, death or accident Insurance/financial education Peace of mind no worries about medical bills etc A family cover whole family benefits

17 Suggestions for Scale-up Regular product review to realign and manage customer expectations Partnerships Partnerships with large networks (membership organizations, hospital networks, retail chains etc.) Systemized awareness process with frequent use of testimonials Customer service mechanism with efficient feedback/action process Use of technology for easy payment of premiums Efficient quality assurance mechanism

18 Thank you! Merci! Gracias!