AIO Life

2. AIO Life Presents Penetrating The Micro Insurance Market Venue: CRRAE UMOA, Abidjan- Cote d’Ivoire Date: November 13, 2013

3. PENETRATING THE MICRO INSURANCE MARKET By Olugbenga Falekulo Executive Director (Life) Continental Reinsurance Plc.

4. Course Outline • Introduction to Micro insurance • The 1st Thing 1st in Achieving a Positive Penetration in Micro insurance • Market Segmentation Pyramid • Penetration Level Across Africa • Possible Engine Growth Drivers for Micro Insurance • Essential Features of MI Products Using the Acronym – UASAVE (You are Save) • Some Global Facts About Micro Insurance • Questions and Answers • Conclusion

5. Introduction to Micro Insurance • Micro Insurance may simply be described as the various insurance policies primarily designed to protect people living below the poverty line against the risks of disability and death as well as their important assets which are being used for income generation for them and their family. • Some elements of savings may equally be incorporated in addition to the risks disability and death as maturity benefits for micro life policies

6. The 1st Thing 1st in Achieving Positive Penetration in Micro Insurance? • The 1st thing 1st in micro insurance is the Proper Market Segmentation by: • Classifying and re-classifying the markets to be targeted using certain defined criteria in order to achieve a positive result. • Some of the criteria that may be used are as follows: – Level of Income – Economic Sectors – Proximity in terms of accessibility to these people etc

7. Market Segmentation Pyramid An example is illustrated in the pyramid below: High Income Earners Medium Income earners Low Income Earners

8. Market Segmentation Pyramid FARMERS ARTISANTS MARKET WOMEN

9. Market Segmentation Pyramid Agriculture Credit Life Pure Life Property Health and medical

10. Penetration Level Across Africa 0.06 1.86 0 0.01 0.0002 0.25 0.16 0.76 5.98 0.002 0 0 0.5 0.42 1.31 0 0.32 0 0 0.68 2.6 0.02 0.38 0 2.27 1.68 0 7 0 4.57 0.78 3.19 3.07 0.12 0.32 1.1 7.31 Seychelles 0 2.64 0.23 0 0.94 10.98 0.08 55.85 1.18 1.68 Mauritius 6.1 12.03 0 54.47

11. Why Low Penetration? In-effective distribution strategies – Distribution strategies have not been effective Consumers’ unawareness level – The awareness level on the part of the consumers is very low Weak partnership – Robust partnership should be sought with banks and mobile companies Weak regulations – Economic realities of the day Dominance of conventional insurance – Over concentration on the conventional insurance

12. Possible Engine Growth Drivers for Micro Insurance Effective awareness programmes Simplicity of MI products MI products expansion to cover other needs Creating trust in the minds of MI policyholders Effective and efficient alternative distribution channels Highly robust technology Commercial sector Good competition Highly robust regulations

13. Essential Features of MI Products Using the Acronym – UASAVE (You are Save) Understandable Affordable Simple Accessible Valuable Efficacy

14. Some Global Facts About Micro Insurance It is a useful tool in economic development A proven record of viability in some of the countries well practiced MI products are available to meet the needs of all of the low-income people across all the sectors of the economy Growth rate of 10% – 20% p.a. Versus Global conventional insurance growth rate of 5% p.a

15. Questions and Answers?

16. Conclusion Thank you