Emerging Insights

For more information about microinsurance, check out the ILO's Emerging Insights, which provide bite-sized lessons from microinsurance practitioners about various themes including distribution, client value, product design and others.   Be sure to check out the latest edition of the ILO's Emerging Insights at the link above featuring one of our latest MILK project papers and also Barbara Magnoni and EA Consultants! 

Documents

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MILK Brief #32: Colombian life microinsurance - The business case for Solidaria's distribution partners MILK Brief #32: Colombian life microinsurance - The business case for Solidaria's distribution partners

new!
Published: 04/23/2014
Author: Richard Koven and Xavier Martin

As a follow up to our study of life microinsurance in Colombia (MILK Brief 21 – Colombian life microinsurance: an emerging success story) the Microinsurance Centre's MILK team returns to this intriguing market to study the business case for life microinsurance at various stages of the value chain. Our analysis focuses on Solidaria and its distributors, all cooperative institutions in Medellin, which distribute credit and group life products.

We found that Solidaria had robust profitability on two of its three partnerships; the third was terminating, requiring run off reserves which made it somewhat unprofitable. For the distribution partners, each made solid profit margins. However, it is not clear how material these profits are relative to the scale of the distributors' overall businesses, and therefore Solidaria must rely on other intangible benefits to support the business case for its partners.

MILK Brief #31: What would you have done without insurance? MILK Brief #31: What would you have done without insurance?

new!
Published: 04/14/2014
Author: Laura Budzyna

The MILK Project's 16 Client Math studies chronicle the ways in which microinsurance clients cope with large and small shocks. But if these clients had to cover the costs of the shock on their own, what would they have done? This brief follows the MILK team's quest for this counterfactual using two methods: (1) interviewing uninsured people who suffered similar shocks and (2) by asking insured people what they would have done without insurance.
Key Findings:
• At first glance, the results match up closely: the most common strategies used by the uninsured were the same as the most common strategies predicted by the insured. Both methods give us a good sense of which strategies are most available and desirable in the absence of insurance.
• Insured clients may also have an exaggerated perception how burdensome the shock would have been, a possible sign of how highly they value, or even overvalue, their insurance. This suggests a potentially powerful link between the tangibility of a product and the perception of its value.
• Finally, we propose that the insured respondents themselves are a compelling counterfactual. Based on empirical comparisons between insured and uninsured, we posit that the strategies that insured clients use in combination with insurance are likely to be the same strategies that they would have used without insurance.

 

MILK Brief #30: Opportunity costs of a hospitalization - implications for men and women MILK Brief #30: Opportunity costs of a hospitalization - implications for men and women

Published: 04/03/2014
Author: Danielle Sobol, Emily Zimmerman, and Barbara Magnoni

In this brief, MILK utilizes data from a Client Math study of high-cost hospitalizations in Kenya to investigate how a hospitalization affects paid and unpaid work differently among men and women. Unpaid work is disproportionately performed by women, and accordingly, the opportunity cost of a shock may be higher for a woman than what is commonly recorded. By better understanding how these costs emerge and by whom they are borne, we can better understand the role that insurance plays and the gaps it leaves in ability to cope with risk.

We found that while the opportunity costs of missing paid work are similarly high for both men and women, but the burden of missing unpaid work is substantially higher for women. While insurance may not be effective in covering this additional need directly, the larger non-financial burden of illness for women may drive them to have greater need for risk-coping tools than their male counterparts.
 

Opportunity costs of a hospitalization - implications for men and women (infographic) Opportunity costs of a hospitalization - implications for men and women (infographic)

hot!
Published: 03/31/2014
Author: The MILK Project

Gender Infographic

How does gender affect the costs and coping mechanisms related to a health-related shock? Findings from a new MILK study indicate that women bear a larger non-financial burden of illness. This infographic provides a sneak peak at the upcoming study, which is based on MILK's client value and business case research with two health insurance programs in Kenya. Full MILK Brief coming soon!

The business case for microinsurance intermediaries - part II The business case for microinsurance intermediaries - part II

Published: 03/25/2014
Author: Richard Koven

 

As a follow up to our previous paper on the Business Case for Microinsurance-only Multinational Intermediaries (see MILK Brief #19, January 2013), the MicroInsurance Centre’s MILK Project team conducted a series of interviews with key management of microinsurance intermediaries. Based on 5 years of data and interviews with management of MicroEnsure, Star Micro, Aon Bolivia, and PlaNet Guarantee, MILK analyses key aspects of the business case for intermediaries, including scale, business model, product type, and distribution. 

 

Microinsurance intermediary interview - PlaNet Guarantee Microinsurance intermediary interview - PlaNet Guarantee

Published: 03/18/2014
Author: Richard Koven

 

As a follow up to our previous paper on the Business Case for Microinsurance-only Multinational Intermediaries (see MILK Brief #19, January 2013), the MicroInsurance Centre’s MILK Project team conducted a series of interviews with key management of microinsurance intermediaries to try to answer some of the outstanding questions raised in the first paper. This Q&A with management of PlaNet Guarantee is the fourth of four interviews, culminating in a final short paper that brings together the lessons we have learned regarding the business case for microinsurance intermediaries. 

In this short interview, MILK and PG management discuss, among other things, how the company has improved its financial results over time by consolidating operations and focusing on consulting during the early phases of the product life cycle. PlaNet Guarantee’s financial highlights from 2008-2012 are provided.

 

Microinsurance intermediary interview - Jose Luis Contreras, Aon Bolivia Microinsurance intermediary interview - Jose Luis Contreras, Aon Bolivia

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Published: 03/13/2014
Author: Richard Koven

As a follow up to our previous paper on the Business Case for Microinsurance-only Multinational Intermediaries (see MILK Brief #19, January 2013), the MicroInsurance Centre’s MILK Project team conducted a series of interviews with key management of microinsurance intermediaries to try to answer some of the outstanding questions raised in the first paper. This Q&A with Jose Luis Contreras of Aon Bolivia is the third of four interviews, culminating in a final short paper that brings together the lessons we have learned regarding the business case for microinsurance intermediaries. 

In this short interview, MILK and Mr. Contreras discuss how Aon Bolivia leveraged its position in the market and gained a profitable position within several years of entry into the market. Aon Bolivia’s financial highlights from 2008-2011 are provided.

 

Microinsurance intermediary interview - Afua Boahemaa Donkor, Star Micro Microinsurance intermediary interview - Afua Boahemaa Donkor, Star Micro

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Published: 03/12/2014
Author: Richard Koven

 

As a follow up to our previous paper on the Business Case for Microinsurance-only Multinational Intermediaries (see MILK Brief #19, January 2013), the MicroInsurance Centre’s MILK Project team conducted a series of interviews with key management of multinational microinsurance intermediaries to try to answer some of the outstanding questions raised in the first paper. This Q&A with Afua Boahemaa Donkor is the second of four interviews, culminating in a final short paper that brings together the lessons we have learned regarding the business case for microinsurance intermediaries. 

In this short interview, MILK and Afua discuss Star Micro's status as a standalone affiliate of the commercial insurance firm Star Group, its relatively quick attainment of profitability, its shift in strategy from indvidual to group sales, and its use of innovative distribution channels. Star Micro’s financial highlights from 2008-2012 are provided.

 

Balancing client value and business case in Kenyan health microinsurance Balancing client value and business case in Kenyan health microinsurance

hot!
Published: 03/01/2014
Author: Richard Koven, Barbara Magnoni, Emily Zimmerman, Danielle Sobol, and Laura Budzyna

 

Balancing value and business goals often challenges insurance providers. In an effort to better understand how profitability and client value complement one another, and how they conflict, the MILK team conducted extensive research on health microinsurance in Kenya from both a business case and a client value perspective. This paper provides an in-depth look at two private health insurance providers: the Afya Yetu Initiative and the British-American Insurance Company’s (Britam) microinsurance program with the Majani tea farmers. It then discusses the trade-offs between and the key factors affecting client value and business case.  

 

MILK Condensado #28: "Sacando los calculos" - Microseguros de salud para mujeres en Guatemala MILK Condensado #28: "Sacando los calculos" - Microseguros de salud para mujeres en Guatemala

hot!
Published: 02/20/2014
Author: Barbara Magnoni y Derek Poulton

Lea esta versión “condensada” de MILK Brief #28: "Sacando los cálculos" - Microseguros de salud para mujeres en Guatemala que está disponible aquí en el sitio web del MicroInsurance Centre (Centro de microseguros). En este documento de sólo dos páginas, se presentan los resultados clave de este estudio de caso y también una lista de las publicaciones de MILK.

Is there value in microinsurance? Client value series brief no. 1 Is there value in microinsurance? Client value series brief no. 1

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Published: 01/30/2014
Author: Aparna Dalal, Emily Zimmerman, Barbara Magnoni, and Michal Matul

Is there value in microinsurance? Drawing on several years of original research as well as other evidence from the field, the MicroInsurance Centre’s MILK Project and the ILO’s Microinsurance Innovation Facility provide concrete insights into how, when, in what ways, and to what extent clients receive value from microinsurance. This first of three briefs on client value introduces the theory of change through which value is realized and presents the evidence of impact in terms of improved financial protection, reduced vulnerability, and better health. 

Microinsurance intermediary interview - Richard Leftley, MicroEnsure Microinsurance intermediary interview - Richard Leftley, MicroEnsure

hot!
Published: 01/22/2014
Author: Richard Koven

 

As a follow up to our previous paper on the Business Case for Microinsurance-only Multinational Intermediaries (see MILK Brief #19, January 2013), the MicroInsurance Centre’s MILK Project team conducted a series of interviews with key management of multinational microinsurance intermediaries to try to answer some of the outstanding questions raised in the first paper. This Q&A with Richard Leftley of MicroEnsure is the first of five interviews, culminating in a final short paper that brings together the lessons we have learned regarding the business case for microinsurance intermediaries. 

In this short interview, MILK and Richard discuss MicroEnsure's role as a microinsurance intermediary, its work with distribution through mobile phone operators, and the move from reliance on donor-funding to operating a sustainable business model. MicroEnsure’s financial highlights from 2008-2013 are provided.

 

MILK Brief #29: Remittances and gifts: how friends and family affect health financing from outside of the province in Kenya MILK Brief #29: Remittances and gifts: how friends and family affect health financing from outside of the province in Kenya

hot!
Published: 01/09/2014
Author: Danielle Sobol, Laura Budzyna, and Barbara Magnoni

 

By supporting and diversifying income, remittances have potential to be a valuable tool in coping with risk, acting as a form of informal “insurance” for recipients. Using data from a client math study in Kenya, the MILK Project looked at how remittance income affects the receipt of gifts from family and friends in response to a health shock, and what that means for the role of microinsurance.  

We found that those who regularly receive remittances were more likely to receive remittances specifically aimed at helping to cover the health shock than those who do not regularly receive remittances, and they received larger amounts, covering a larger percentage of health shock costs. In contrast, respondents who do not receive regular remittances do not appear to have access to as much “surplus” support from migrant friends and family who live far away. They will typically be more vulnerable in the event of a large financial shock and might benefit even more greatly from insurance. We conclude that neither remittances nor insurance are enough alone to cover the range of costs related to hospitalization; insurance appears to complement - rather than crowd out - remittances for this purpose.

 

WIN WIN WIN - Profitability and client value along the life microinsurance value chain in the Philippines WIN WIN WIN - Profitability and client value along the life microinsurance value chain in the Philippines

hot!
Published: 01/06/2014
Author: Richard Koven, John Wipf, Emily Zimmerman, and Michael J. McCord

 

As a follow up to our study of life microinsurance in the Philippines (MILK Brief #14) the MicroInsurance Centre’s MILK team returns to this vibrant market to study the business case for life microinsurance at various stages of the value chain. The bulk of our analysis focuses on distributors and insurers, which we complement with a discussion of value (drawing from MILK’s Client Math work) and how an understanding of value can inform and even enhance an insurer’s or distributor’s business case. Detailed appendices show cost allocations for distribution expenses, providing a real picture of the profitability for microinsurance distributors. Key findings include:

  • There is a strong and unambiguous business case for life microinsurance in the Philippines both for risk takers and distributors; insurers’ combined ratios in 2012 averaged 74%, leaving ample margin for profit, and for distributors, commission revenue easily exceeded related costs, again leaving ample margins for profit. 
  • The clear-cut business case applies to MFI and cooperative distributors in partner-agent relationships as well as in-house MFI (MBA) distribution channel.
  • Positive financial outcomes were evident for distributors of both mandatory and voluntary covers.
  • The Philippines market is seeing increasing competition for life microinsurance business as commercial and cooperative insurers seek greater market share; competitive pressure on the MBAs is compounded by slowing growth of their sponsor MFIs’ memberships.
  • In the face of increasing competition, understanding the value proposition from a client’s perspective yields opportunities to compete not just with lower prices or larger payouts, but with appropriate, tailored coverage.

 

Condensed MILK: WIN WIN WIN - Profitability and client value along the life microinsurance value chain in the Philippines Condensed MILK: WIN WIN WIN - Profitability and client value along the life microinsurance value chain in the Philippines

hot!
Published: 01/02/2014
Author: Richard Koven, John Wipf, Emily Zimmerman, and Michael J. McCord

In its study of the profitability of life microinsurance in the Philippines, the MILK Project found a strong and unambiguous business case for both insurers and distributors. Get the key findings from this in-depth study in this 1-page Condensed MILK.

Infographic: WIN-WIN-WIN? Profitability and client value along the life microinsurance value chain in the Philippines Infographic: WIN-WIN-WIN? Profitability and client value along the life microinsurance value chain in the Philippines

hot!
Published: 12/10/2013
Author: The MILK Project

infographic - philippines value chainThis infographic provides a sneak peak at the findings from an upcoming MILK study that looks at the profitability of life microinsurance in the Philippines. Full MILK Brief coming soon!

 

 

Beyond the actuary's guess - lessons from 15 studies on client value of microinsurance Beyond the actuary's guess - lessons from 15 studies on client value of microinsurance

hot!
Published: 11/27/2013
Author: Emily Zimmerman, Barbara Magnoni, and Michael J. McCord

Over the course of three years, the MicroInsurance Centre's MILK project conducted 15 client math studies in 10 countries for a range of life, property, and health microinsurance products. This paper brings together lessons about the value that products provide to clients, exploring nuances around when, how, and to what degree. 

High-touch vs. Low-touch Microinsurance: exploring trade-offs in  low cost distribution (Infographic) High-touch vs. Low-touch Microinsurance: exploring trade-offs in low cost distribution (Infographic)

hot!
Published: 11/15/2013
Author: The MILK Project

infographic - high-low touchThis infographic provides a sneak peak at the findings from an upcoming MILK study that looks at the trade-offs between high-touch and low-touch distribution models. Full MILK Brief coming soon!

 

Are Remittances Insurance? (Infographic) Are Remittances Insurance? (Infographic)

hot!
Published: 11/15/2013
Author: The MILK Project

infographic - are remittances insuranceThis infographic provides a sneak peak at the insights from MILK studies in Kenya, looking at the role that remittances play in health financing. Full MILK Briefs coming soon!

 

A LITER OF MILK: Right Doctor, Right Treatment, Right Cost: Service Value and Perceived Value at UPLIFT India Association A LITER OF MILK: Right Doctor, Right Treatment, Right Cost: Service Value and Perceived Value at UPLIFT India Association

hot!
Published: 11/15/2013
Author: Elizabeth McGuinness

 

Uplift India Association is a mutual-based, community-managed health microinsurance program serving poor and low-income families living in the slums of Pune and Mumbai, India. The program combines its core hospitalization coverage (paid on a reimbursement basis) with a wide range of additional benefits, including discounts on outpatient care and drugs, health promotion and preventive care activities, and a 24/7 telephone helpline and referral services. An earlier study (McGuinness, 2011) found substantial financial value in the program for clients who used the hospitalization benefit, but only 2% of members use that benefit per year. This study seeks to understand the value, including the service value, gleaned from the product by all members, including those who do not make hospitalization claims. It also seeks insight into client perceptions of value in the many components of the product. Data was collected through focus group discussions with members and non-members of the program and interviews with staff of Uplift and partner institutions.

 

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