War Room

Team Kung-Fu Pandey || Batch of 2014, FMS Delhi
Financial services- Rural health insurance

Aparajita Puri
Shivani Mittal
aparajita.p14@fms.edu
shivani.m14@fms.edu
Vinay Prithiani
Vineet Jain
vinay.p14@fms.edu
vineet.j14@fms.edu
Case approach
Insurance Industry analysis
Rural India understanding
Issue identification
Strategy overview
Implementing strategy
Conclusion
Case Approach
Problem statement
Objective: To enable MIBL to reach to rural
customers with a suitable Health Insurance product
Key questions
to be answered
How to innovate disruptively , to enable health

insurance reach to rural masses?
Product catering to lower income groups in
terms of premium payable
Make insurance a priority list like historical
trio of Roti-Kapda-Makaan
Marketing of such insurance product to the
masses
Methodology
Research
Issue
Issue
Identification
Analysis
Demand side
Primary : Interviews and word association tests
with 28 people from villages in UP & Haryana:
Chakkarpur
Bateshwar
Baduan
Secondary : Insurance awareness survey , IRDA
and various other reports on consumer health
seeking behaviour and consumption expenditure
Strategy
Actionables
Roll out plan
Supply side
Primary : Interviews and interactions from
industry experts of:
Health insurance
Hospitals
MFIs
Secondary : Various industry reports on
hospitality , health insurance and MFIs prepared
by government and private firms
Case approach
Insurance sector in India

Insurance brokers and role

Strategy overview
Conclusion
Overview: Insurance in India

What is insurance ?
A risk mitigation strategy that allows individuals to transfer risk from

an individual to a pool of people
across different points in time
Indian insurance: Trends

Insurance market is expected to reach US$140B,
growing at CAGR 22%
Total 49 insurance companies in India, 24 offering
general insurance
Insurance density and penetration levels have been
rising marginally
Indian insurance: Growth drivers

General insurance expected to see increase in insurance
penetration and density levels
Health insurance accounts for 23% share of general
insurance; expected to grow at ~30%
Takeaway
Indian insurance sector
is 10th largest in the
world; growth in health
insurance and
increasing rural uptake
to drive future growth
Five new distribution channels ( broking ,

bancassurance etc.) account for ~40% of private
insurance from 0% in 2001
Increasing rural penetration to drive growth

Companies expected to add Rs. 1000 Cr. to net worth from
200M rural people looking for alternate savings channels
Case approach
Insurance sector in India

Insurance brokers and role

Strategy overview
Conclusion
Takeaway
Insurance broker adds
value to three key stake
holders: insured,
insurer and reinsurer
facilitated by other
intermediaries
Insurance brokers and their role

Brokers add value to
multiple
Who
is aninsurance
insurance broker ?
companies by
increasing their reach
and sales
Brokers
add value
to
Insurance brokers act as an intermediary between clients and
insurance
companies
insured
by
helping
him
They use their in-depthUnderstand
knowledge of risks and the insurance
to create
buy market
most suitable
needs
Commission
and arrange suitable insurance policies and arrange
cover
insurance
product at
agreements
Product
branding and
promotion
Negotiating
policies
as per
customer needs
Find a suitable
company to
transfer
portfolio risks
of insurance
company
Reinsurance company
helps reduce risk of
insurance company and
provides reinvestment
opportunities to
reinsurer
of the
clients
Insurance
broker
Negotiate
premium claim &
other conditions
with reinsurance
company
Educate ,sell
insurance
& collect
premiums
favorable price
Facilitate
claim
settlement
Leverage
intermediaries
like MFIs,
Cooperatives
to reach
target
They act as facilitators
customers
for broker to
intermediate between
insurer and insured.
Understanding rural India
Case approach
Who is the rural consumer?

Exposure to financial services
Attitude towards health/
insurance
Why is penetration low: Issues
Strategy overview
Conclusion
Takeaway
The rural consumer is
diverse and has
different needs. Even
with low incomes,
healthcare eats a
substantial share of his
expenditure
Who is the rural consumer ?

Socio economic characteristics
Family: 74% stay in nuclear families and only
26 % in Joint families
Rural population-Literacy
Housing :48 % of rural population resides in

pucca houses , rest 52 % in kuccha and semi
pucca dwellings
Occupation: 66 % of rural population is
engaged in agricultural activities , followed
by construction(12.4%) and manufacturing
(6.5%)
38%
62%
Illiterate
Literate
Occupation (%)
Self employed
(non agri.)
31.39
Agri. Labour
25.14
Other Labour
23.83
Self employed
(in agri.)
19.63
Income and expenditure

Of the rural population, 34% lie Below Poverty
Line and 66% Above Poverty Line
Income class (average annual

per capita)
Average annual household income is Rs.

88,660 , out of which at an average 23% is
saved, rest being household consumption
expenditure
Upto 10000
31.39
10001-16000
25.14
The share of expenditure on non foods is

rising with rising income
16001-27000
23.83
27001 and above
19.63
Total
100
Combination of healthcare and transport has

taken up a substantial share of rural spends
Consumption pattern
51%
Food
49%
Non food
Case approach

insurance
Strategy overview
Conclusion
Exposure to financial services in rural India

Financial services in rural India
Rural population
Rural India has seen recent upsurge in availability of
financial services and infrastructure
Bank branch density in rural India is higher than
Russia, Brazil
Rural India has seen

steep growth in
financial services in the
last decade; However,
non-life insurance
penetration has lagged
26%
41%
59%
74%
~30% of rural farmers have credit cards

Share of formal rural credit has grown by ~27% over
last 10 years
Banked
Unbanked
Formal
Informal
Insurance in rural India

Only 12% of rural India has opted for any
form of insurance
Takeaway
Share of rural credit
In contrast to financial services, current

uptake of insurance in rural India is very
low
However, there is clear trend of increasing
acceptability of insurance with financial
inclusion
Life insurance penetration in the banked
segment of rural India is as high as 40%
Non-life insurance products are expected

to row in the near future
Reach of rural insurance
Rural insurance uptake
Life
12.1%
General
0.4%
Health
0.7%
Motor
3.1%
Tractor
0.3%
Crop
0.3%
Case approach

insurance
Strategy overview
Conclusion
Consumers attitude towards health and insurance

Indian poor and health
Health care costs - responsible for ~55% decline to poverty
Where do the rural poor go for treatment?
~50% poor families have major health crisis each year
Hospitals are visited ~30% of reported health incidents

Rural families prefer private healthcare; ~75% of health
expenses are attributable to pvt. clinics and hospitals
Medicines represent largest cost, ~40% of total expense
34%
40%
36%
30%
20%
10%
12%
15%
3%
0%
Primary
health
care
Major source of finance for health expenditure is loans from

moneylenders, friends & family
Govt.
hospital
Private
clinic
Private
hospital
Other
Indian poor and insurance
Takeaway
Although health risk is
perceived as high, few
have health insurance
owing to lack of
suitable products.
Private health facilities
are favored
What is the biggest risk as perceived by

rural consumer?
Majority rural consumers feel health insurance schemes in

their present form offer limited value
80%
Impediments to health insurance include:
60%
Complexity of insurance product
40%
Lack of easy access (Delivery)
20%
High premiums
Poor claim-settlement ratio
63%
18%
12%
7%
0%
Health risk Death risk
Property Crop failure

loss
There is a huge mismatch between the supply and demand for health insurance owing to the relative complexity
of the productthus the health risk, although recognized by the poor, remains unmitigated
R. Devaprakash, Project Director, CARE
Case approach

insurance
Strategy overview
Conclusion
Why health insurance penetration is low: Issues
Awareness
Never
heard
Willingness to
buy
Ability to buy
Demand side
Value
Recognition
Wrong
perception
Status Quo
Theory
Complexity
Documents
needed
Prospect
Theory
Eligibility
and extent
Need for low

Premiums
High Default
Settlement
process
Payment
Terms
Relative
Value
Design
difficulties
Supply side
Mistrust
Company
Hospital
Operational
bottlenecks
High risk to
health
Health
infrastructure
Sales network
creation
Premium
collection
Documentation
Case approach
Demand side issues

Supply side issues
Strategy overview
Conclusion
Demand side issues (1/5)

Demand side
Awareness
Ability to buy
Value
Recognition
Willingness to
buy
Complexity
Mistrust
54% of all uninsured rural people said that they could not buy health insurance as it was too expensive
Financial product progression
with rising income
Typical micro health insurance
scheme premiums are Rs.150-200
per person per month, 10-15% of
average monthly spend
This when health insurance is not
the top priority in financial
services makes it expensive for
most
Potential solutions
Design products which
have reduced premiums
or provide other forms
of premium payment
Savings account
Life Insurance
General Insurance
Har mahiney paisey dena
thoda chubhta hai
90% of the rural population spends less
than Rs.1500 per capita per month
Health Insurance
Case approach
Demand side issues

Supply side issues
Strategy overview
Conclusion
Willingness to
buy
Ability to buy
Demand side
Value
Recognition
Awareness
Complexity
Mistrust
Only 9% of all rural Indians have heard of health insurance, and much lesser understand its concept
Statewise Awareness
Rajasthan
Perceived benefits of health insurance

0%
4%
9%
11%
Southern
Bihar
Haryana
2%
7%
Potential solutions
Maharashtra
41%
3%
12%
Eastern
8%
Andhra Pradesh
6%
Northern
10%
Health insurance awarenenes is heavily

skewed by geography
15%
55%
22%
5%
37%
34%
16%
5%
20%
0%
10%
Critical illness
All illness
30%
16%
Mizoram
50%
14%
15%
0%
Cashless
Only OPD
11%
Uttarakhand
Not just inform, but

educate people about
the concept of health
insurance
36%
10%
8%
Western
Gujarat
No benefits
27%
6%
20%
30%
40%
50%
60%
Most rural people are not aware of all entitled

benefits of health insurance
Case approach
Demand side issues

Supply side issues
Strategy overview
Conclusion

Demand side
Awareness
Hum toh fit hai sahab, beemar nahi

padenge
Resident, Chakkarpur, Haryana
Reinforce magnitude of
potential financial and
social loss.
Provide frequent
gratification
Value
Recognition
Complexity
Mistrust
Certain behavioral biases block out health insurance because of its intangible and future oriented nature
Status Quo Bias
Potential solutions
Willingness to
buy
Ability to buy
People believe that the present state

will continue indefinitely
They have the I wont fall ill
assumption
They assign a very small probability to
the incidence of a major disease
If this probability is below a threshold
which they deem significant, they block
it out completely
Prospect Theory
Jab kabhi beemar padenge tab
dekhenge, abhi nahi sochte iske baare
mein
- Resident, Budaun, Uttar Pradesh
Relative Perceived Value

Aur bahut saare kharche hai humare roz
ke, ye ek aur kharcha kyu kare
- Resident, Bateshwar, Uttar Pradesh
People end to discount future benefits a

lot more than present losses
The insurance product is not tangible

and so people will assign a lower value
to it compared to other tangible things
They are unable to imagine the scale of

potential financial and social distress
that comes with a major illness
People have multiple bad days and so

they dont see the value in saving for
one very bad day
They are unable to appreciate benefits

as they are uncertain and far into the
future
Concept of saving and risk hedging is

not understood by most, they dont see
the point
Case approach
Demand side issues

Supply side issues
Strategy overview
Conclusion

Demand side
Awareness
Potential solutions
Reduce caveats and

make product simple to
explain and understand,
minimum T&Cs and
simple paperwork
Ability to buy
Value
Recognition
Willingness to
buy
Complexity
Mistrust
Schemes are too complex for the rural people to understand, misunderstanding leads to claim rejections
What the rural customer really wants is a product that he can understand and trust. Everything else
apart, if we can show them transparency, they trust us
- Kartik Mehta, CEO Pahalfinance
Documents needed
Eligibility/Extent
Many people are illiterate

and not capable of
understanding paperwork
Caveats in T&Cs, diseases

covered and extent of
cover are not understood
easily by people
Claims settlements are an

issue due to complex
documentation
Most rural people cant

differentiate one disease
from another
This leads to low claims to

settlement which makes
people lose trust
They are permanently

aggrieved if their claim is
rejected
even
on
legitimate grounds
Settlement process
Multiple intermediaries
makes it difficult for the
insured to get claims
processed
People dont understand
the range of processes to
be adopted
Prior
intimation
for
cashless, people dont
have the money to pay
and then reclaim in case
of emergencies
Payment Terms
Cashless services are
fundamental, and are not
usually
available
for
emergencies
Many people dont have
bank accounts, hence
premium payments are
cumbersome
Premium amounts are
larger for less frequent
premium collections
Case approach
Demand side issues

Supply side issues
Strategy overview
Conclusion

Ability to buy
Demand side
Value
Recognition
Awareness
Only Profit
seeking
Piggy-back on networks
or individuals who have
high social equity with
the locals
Complexity
Mistrust
There are too many caveats in most health insurance schemes, and this is the main cause of mistrust
Rural mindset against insurers
Potential solutions
Willingness to
buy
Outsiders
Trying to loot
me
Insurer wont
honour claim
Hospital wont
honour claim
Some Unpleasant past experiences

A man died of a severe infection, but not before his wife spent a lot of
money on medicines and doctors. After his death, she submitted the
bills to the insurance company, but the company refused to pay up on
the grounds that he had never spent a night in the hospital. Appalled
by this incident, all the women in her borrowing group stopped paying
premiums.
One woman said that she decided not to renew her health insurance
after SKS refused to reimburse her when she went to the hospital with
a stomach infection as the policy only covered catastrophic events. A
stomach infection, as horrible as it can be, did not qualify. It wasnt
clear if she understood the distinction.
Case approach
Demand side issues

Supply side issues
Strategy overview
Conclusion
Supply side issues (1/2)

Supply side
Need for low
Premiums
Design
difficulties
High Default
Operational
bottlenecks
High risk to
health
Health
infrastructure
Sales network
creation
Premium
collection
Documentation
Low premiums are required while operational costs and systematic risks are high in rural areas
Many insurance companies are not very serious about rural areas, they dont have representatives here
- Dr. Zain Khatib, Government health centre, Hoobly, Karnataka
People cant afford high premiums
Potential solutions
Look for alternate

payment models for
revenues and partner
with existing networks
to reduce costs
Costs and risks

in traditional
insurance
Costs and risks

in micro
insurance
Lower revenues with high defaults

High expected frequency of claims
Low growth with low renewal rate
High operational costs
High demand generation costs
Severe
margin
pressures
Case approach
Demand side issues

Supply side issues
Strategy overview
Conclusion
Supply side issues (2/2)

Design
difficulties
Supply side
Need for low
Premiums
High Default
Operational
bottlenecks
High risk to
health
Health
infrastructure
Sales network
creation
Premium
collection
Documentation
Very high operational cost due to poor infrastructure and communication networks
Our biggest operational challenge is being able to touch base with people and collect money quickly
- Sakshi Chaddha, Employee, Microsave
Healthcare
infrastructure
Potential solutions
Leverage existing
networks and upcoming
government
infrastructure
Most rural areas have a

weak hospital network
Many of the hospitals
dont have infrastructure
and manpower to treat all
illnesses
Villagers may have to
travel to hospitals in cities
for certain procedures
Sales Network
creation
Limited infrastructure
Limited understanding of
local market dynamics
Limited social equity with
people
Limited sensitisation and
training of potential sales
force in understanding
the rural consumer
Premium collection
Underpenetration of rural
banking institutions low
savings account linked
premium collection
High tendency of delay or
default of premium from
certain members
Physical
collection
a
challenge in absence of
informal networks
Documentation
Lack of availability of
documentation to enroll
in a scheme
Most rural people dont
always have the requisite
documents for successful
claim settlement
They dont understand
the scope of documents
and riders at point of
claim
Case approach
Strategy overview
Conclusion
From issues to success strategy

Issues
identified
Success
strategy
Potential
solutions
Takeaway
Affordability, Trust,
Simplicity, Efficiency
have to be the core
value proposition that
drive success in rural
insurance
Supply side
Demand side
Operational
bottlenecks
Ability to buy
Willingness
to buy
Affordability
Trust
Simplified
offering
Operational
efficiency
Reduce
premiums
Insurance
education
Simple
procedure
Use existing
networks
Frequent
gratification
Health risk
education
Minimum
T&C
Selective
rollout
Alternate
payment
modes
Renewal
benefits
Simplify
paperwork
Show
probability of
occurrence
Design
difficulties
Implementing strategy to enable Rise
Product Design
Network partners
Communicate
Claim settlement
Case approach
Strategy overview
Product design
Network partners
Communication
Claim settlement
Roll-out strategy
Conclusion
Product Design (1/3)

Reduce
Premiums
Simple
products
Frequent
gratification
Premium
flexibility
Final Product
Premiums : Issue at hand
Cannot pay high

premiums
Insurance
company
Consumer
Low premiums not

feasible
Who should pay premiums? Those who benefit from insureds good health
Who benefits from consumers good health
Lenders
Payment
ecosystem
Lenders
Consumer
Healthcare
widened
Consumer
Banks
providers
MFIs
Premium
Partners
payable by
Partners
consumer will
Healthcare
Organizations they supply
to
reduce
providers
Organizations that supply to
them
areIndia
: fordoesnt
Partners
Critical
reason
loan defaults
is health
~30% rural
visit hospitals
1.costs
Those
who
supply
to
consumers
due to high medical expenses
(FMCG,
telecom
etc.)the user
Financial
shocks lead
into debtof
Health
Insurance
increases
occupancy
Insurance
1.traps,
Thoseleading
whom
consumers
to
default supply to
healthcare
providers
company
(ITC, PepsiCo
etc.)
Health
insurance
mitigates
against
health
Results
in increased
incomes
for hospitals
shocks
Good
health
leads
to
stability
of
supply
Insured patients provide higher revenue
and income
Lenders
risk reduces if consumer has a
reliability
health
Contribution
to healthcare
of rural
insurance
Level of
benefit : HIGH
people
adds
to
the
brand
image/CSR
Level of benefit : MODERATE
Level of benefit: MODERATE
Beneficiaries should contribute to premiums. How?
Healthcare providers
Lenders
Partners
Discounted services
Easier to give out
Directly linked to their benefit
Reduce operational costs

Provide network/infra
Low marginal cost
Direct cash contribution

Most feasible form
Adds to CSR brand
Case approach
Strategy overview
Product design
Network partners
Communication
Claim settlement
Roll-out strategy
Conclusion

Reduce
Premiums
Simple
products
Frequent
gratification
Premium
flexibility
What health
insurance covers
Standard health expenditure

Cost
Surgery
Inpatient
Hospitalization
Diagnostics
Outpatient
OPD Consultation
Making products simple to

them and showing them
tangible benefits is crucial for
them to trust you
Terms an d conditions about
coverage and costs will deter
them from renewing
-Mr. Kartik Mehta,
Founder and CEO, Pahal Finance,
Final Product
Illnesses : Frequency vs.

criticality
High cost. Covered

by most health
insurance plans
Cancer,
heart attack
High frequency.
Cumulative costs
high for consumers
Common cold,
Gastroenteritis
Incident Criticality
frequency of illness
Frequency of
occurrence
Expert speak
Issues
People have multiple bad days and
so they dont see the value in
saving for one very bad day
The complexity of terms and
conditions is hard to understand
They relate to beemari and
hospitalization, not to specific
diseases, inpatient, outpatient etc.
The product has to be in

terms that they understand
Need to minimize caveats
which are
Illness specific
Procedure specific
Case approach
Strategy overview
Product design
Network partners
Communication
Claim settlement
Roll-out strategy
Conclusion

Reduce
Premiums
A product which adds

premium contributors,
simplifies coverage
while protecting from
health shocks
Frequent
gratification
Premium
flexibility
Final Product
Scheme 1: Low premium; Only high risk cover
Scheme 2: Higher premium; Full risk cover
Target: Low income; Low paying capability
Target: Higher income; Higher paying capability
Premium
Contributors
Premium
Contributors
~Rs. 30-50 per month

~Rs. 8-13 per week
Direct: Insured, Partner

Indirect: Hospital, Lender
~Rs. 90-120 per month

~Rs. 23-30 per week
Direct: Insured, Partner

Indirect: Hospital, Lender
Cash, Savings linked or kind
Cover
Cash, Savings linked or kind
Cover
Service type
Outpatient
Hospitalization,
Surgery
Out of
pocket
OPD consultation,
diagnostics
Covered
by
insurance
~Rs 1500-2500
Price floor
Service type
Outpatient
Partial cover: ~30%
OPD consultation,
diagnostics
Inpatient
Takeaway
Simple
products
Inpatient
Hospitalization,
Surgery
Cost
Salient features
Insurance ONLY for
Cashless cover
Tangible benefit to
empanelled hospitals
everyone
Partial cover : Partial
All
diseases and
Scheme rollout only in
amount paid by the
ailments
to be
areas with empanelled
hospital (indirect premium
covered.
hospitals
contribution)
Partial cover: ~40%
Covered by insurance
No price floor
Cost
Risks & Mitigations

Moral hazard: Scheme design : Small expenses
paid out of pocket
Adverse selection: Sales network and reach
Fraud: In-house doctors to validate claims
Product Design
2 proposed schemes at
low premiums
Simple products
encompassing most
health issues
Frequent gratification
Flexible payments
Network partners
Communicate
Claim settlement
Case approach
Strategy overview
Product design
Network partners
Service provider
Sales and distribution
Communication
Claim settlement
Roll-out strategy
Conclusion
Takeaway
Exclusive tie-ups with
existing RSBY
empanelled hospitals
to effectively roll-out
scheme
Network: Service Provider

Key requirements from service provider
Scope
Infrastructure
Suitable
location
Ability to cater to majority health

concerns and different diseases
Meets health demand of all ages
Presence of doctors, nurses,
diagnostic and surgical facilities
Capacity and adequate space
In close proximity of village
targeted for insurance
Easily accessible for insured
Potential service provider

RSBY empanelled hospitals
Total of 530 hospitals have been empanelled under RSBY scheme

launched by GoI
These hospitals have all required medical facilities and
infrastructure to meet demands of people in the district
Certain empanelment criteria need to be met for a hospital to be
certified as RSBY empanelled
Use RSBY empanelled hospitals as

service provider partners
RSBY empanelled hospitals are certified on availability of basic amenities and provide cash-less insurance
facility ONLY for BPL citizens protected under the RSBY scheme
Our strategy
for service
providers
Choose product roll-out location based on availability of RSBY empanelled hospitals.
Tie-up with RSBY empanelled hospitals as exclusive service providers for above BPL users
Follow spread of RSBY empanelled hospitals into new districts and slowly achieve pan-India
coverage
RSBY
Dual role
empanelled
Serves as service provider for BPL scheme GoI RSBY

Serves as service provider for M&M non-BPL scheme
Case approach
Strategy overview
Product design
Network partners
Service provider
Communication
Claim settlement
Roll-out strategy
Network: Sales & distribution (1/2)

Key requisites from sales network
Reach
Infrastructure
Trust
Leverage familiarity,
equity and existing
networks of Banks/
MFIs, Co-operatives,
M&M dealerships or
NGOs to extend sales
network
Established network partner with

high credibility
Minimize fraud/corruption
M&M branch
/dealership
Banks/MFIs
Co-operatives
NGOs
Analyse potential partner relationships
Conclusion
Takeaway
Targeted access to large groups

Understanding of customer base
Monitor, evaluate pdt. adoption
Presence of physical infra. across
locations to enable sales, issue
resolution, claim settlement
Potential sales partners satisfying key requisites
M&M branch/
Co-operatives
dealership
NGOs
Banks/MFIs
What do we gain ?
What do they gain ?
Role
Existing infrastructure
Access to large
groups
Know-how
of local
people
Possibility
of saving
linked plans
Existing
sales
network
Easy premium
collection,
Access
to financially
stableclaim
people
settlement
branch
People
whothrough
trust and
value location
Customersbrand
exposed to finance
Mahindra
Reduction of risk related to

health for consumers of MFIs
leading toservices
default in loans
financial
Savings linked
deposits cost
Possibility
of exploiting
synergies
Intimate new account creation
Enhances trust
faith in MFI
Opportunity
to and
cross-sell
Sales team representative stationed at

MFI network
physical locations of M&M
network
One stop shop for issue resolution,
doubt clearing, claim settlement
MFIs toto
Leverage mobile network of M&M
maximize reach across village
Highlycredibility
trusted by
local
people
High
with
local
people
large groups
Access to groups
of people whore
Possibility
of kind linked
plans
open to accepting
new ideas
Easy premium collection,
claim
Understanding
of local people
settlement
through
officeclaim
location
Easy
premium
collection,
settlement through office location
of risk related
to for
Reduction
Seen as promoting
welfare
health
for members
the
village
Seen
as promoting
for
Addition
of service welfare
in current
the village
portfolio
Kind linked payments may
incentivise more associations
co Sales team will co-ordinate with NGO

operative
headbusiness
for daily needs
head
for daily
Premium collections made easier via
co-opNGO
office
local
office
co-opand
andinstant
Intervention through NGO
instant sign-ups
co-op gatherings
sign-ups
in NGO in
gatherings
Case approach
Strategy overview
Product design
Network partners
Service provider
Communication
Claim settlement
Roll-out strategy
Conclusion
Network: Sales & distribution (2/2)

Choice of network partner by geography
Scheme roll-outs in different geographies could
involve varying degrees of partnership with
different sales partner basis
Relative reach of each sales partner
Relative strength of sales network
Local dynamics and preferences
Equity of sales partner in specific area
Referral program to maximize mass reach

Referral programs in the rural setting can bring learning
from other industry to maximize reach to the masses
Given the trust barrier, word of mouth and coercion
from known people would be effective
Realm of trust
Early adopter refers 5 people
Case in point: Gujarat

Milk production and pasteurization is the mainstay
of the Gujarat economy with production at 270lakh
kg per day.
GCMMF is the countrys largest milk coopertive
with a strong established network across Gujarat
Takeaway
Maximize reach to
masses and overcome
trust barrier through a
strong referral program
Sales strategy
for Gujarat
Reach
Network
Equity
Ease
Partner with GCMMF

Establish sales kiosks at
GCMMF outlets
Leverage GCMMF mobile
network to maximize reach
Leverage GCMMF equity
Referred 5 buy insurance
Successful referral benefit
1 month premium discounted

You pay 11 months, we pay 12th
Product Design
Network partners
low premiums
Simple products
encompassing most
health issues
Flexible payments
Service provider:
RSBY empanelled
hospitals
Sales network:
partner MFIs/Coops/M&M dealer
Referrals scheme
Communication
Claim settlement
Case approach
Strategy overview
Product design
Network partners
Communication
Claim settlement
Roll-out strategy
Conclusion
Communication strategy
Potential solutions:
Effective communication on
Category creation
Insurance,
health, risk
Initiate communication
targeted at creating
product category,
followed by building
product affinity and
finally, consumer loyalty
Risk education
Insurance education
Product acceptance
Product concept & associated benefits
Product introduction
Product adoption
Payment terms, cover, claim settlement
Product logistics
Loyalty
Renewals, relationship building
Renewals
Phase 1
Takeaway
Future value &

health expense
Communication plan
Phase 2
Phase 3
Risk education
Insurance edu.
Product intro.
Prod. logistics
Renewals
Potential health
risks for family
Understand
potential costs of
health issues
Past experience
of local villagers
with health risk
and its impact
Clarity about
concept of
insurance
Benefits of
insurance
Need and
relevance of
insurance
Future value
Proposed
product details
Explain benefits
from product
Usage details of
product
Premiums
payable
Inclusions
Payment terms
Max. cover
Claim settlement
Terms &
conditions
Documentation
Push to renew
Incentives
Remind of
product benefits
Build long-term
relationships
Extend policy
base across
family
Case approach
Strategy overview
Product design
Network partners
Communication
Claim settlement
Roll-out strategy
Category creation: Risk and insurance education

Phase 1 : Category creation
Objective :
Attract attention of potential customer base
Explain risk and insurance concept
Prepare base to explain insurance product to
interested customers
Reach
Actionables
Message
Organize:
Health camps/melas
Short movies/
documentaries
Street plays
Speeches
The above will help
create
preliminary
interest
amongst
potential consumer to
further inquire about
possible ways to insure
against risks
Basic Health awareness,

sanitation
Conclusion
Panchayats
MFIs
Target people
through local
institutional
groups
Cooperatives
SHGs
Potential health risks

Implications
of health hazard
SHGs
debt trap
Local cases to demonstrate how
health concerns pushed to
poverty trap
Concept of insurance to
mitigate such risk
Case approach
Strategy overview
Product design
Network partners
Communication
Claim settlement
Roll-out strategy
Product adoption: Scheme and logistics education

Phase 2: Product acceptance & adoption
Objective :
Introduce product to targeted groups of early
adopters
Explain and educate on functional benefits of product
Explain product logistics and usage details
Incentivize referrals and word of mouth spread
Actionables
Reach
Conclusion
Communication
barriers:
1.Trust deficit
2.Inertia of
ignorance
3.Simplicity
Panchaayats
MFIs
Hospitals
Explain product
to interested
people and make
direct sales pitch
Kiosks
SHGs
Cooperatives
MIBL representatives at all channel
partners engage with interested
customers and sell products
Group sales through

panchayat, SHGs, MFIs
Identify opinion leaders
early adopters, push to
buy through direct sales
Use early adopters to
spread msg. of product
Referral scheme to
incentivize favorable
word of moth
Leverage local people and word of

mouth to increase trust element
Engage repeatedly via sales team
at channel partner locations
Convert opinion leaders into initial
consumers
Clarify doubts and questions,
minimize information
Message
What is the product ? How does

it work ?
Benefits from product usage
Premiums payable and
inclusions of product
Demonstrate product logistics
claims and settlement, cover and
required documentation
Local people using &
recommending product
Case approach
Strategy overview
Product design
Network partners
Communication
Claim settlement
Roll-out strategy
Loyalty creation: Push to renew scheme

Phase 3 : Loyalty
Objective :
Reinforce benefits of health insurance to existing
policy holders
Provide incentives to renew policy
Establish long term relationship with customers
Barriers
1. Undermine relevance as they
never claimed during last
policy tenure
2. Inertia to reinitiate premium
payment cycle due to low
liquidity
Reach
Actionables
Existing
policy holders
Compile and distribute

a brochure containing
details of 5 major policy
beneficiaries in village
Radio ads
beneficiaries sharing
experience
Poster/banners/ word
of mouth
communicating
incentives on renewal
of policy
Reinforce importance
Incentives to renew
policy
Message
Conclusion
Reach by multiple
channels
(especially policy
holders who never
claimed in policy
span)
Remind customers how covillagers have benefitted from

health insurance
Long term benefits of health
insurance
free health check-up available

to head of family on policy
renewal
Product Design
Network partners
low premiums
Simple products
encompassing most
health issues
Flexible payments
Service provider:
RSBY empanelled
hospitals
Sales network:
Referrals scheme
Communicate
Category creation
Product acceptance
and adoption
Loyalty creation and
relationship building
Claim settlement
Case approach
Strategy overview
Product design
Network partners
Communication
Claim settlement
Roll-out strategy
Claim settlement
Role of broker in claim settlement
Towards
insurer
Supporting the insurers profit

goal and avoid paying for
fraudulent claims
Towards
insured
Complying with the contractual

promises in the policy and
ensure realisation of adequate
claims
Implications of failure to settle valid claims

Insured loses faith in insurance policy and
company
No renewal of policy and further loss of
customer base with spread of information
Empanelled hospital loses business and
in long run mite cause discontinuation
of partnership
Proposed claim settlement procedure
Conclusion
Hospital informs MIBL
representative
Sales representative
from MIBL assesses and
claim
The empanelled
hospital -responsible
to initiate claim by
informing MIBL
representative
Hospitals have
incentive to inform
MIBL to realize their
cash claims
Check for necessary

bills and receipts for
validity of
hospitalization
Verify with the rate
sheet of hospital
MIBL rep. should
regularly update rate
sheet with
Claims not verified

For any discrepancy
or fraud the MIBL
mite not verify the
claims
The insured should
be informed clearly
of the reasons for the
same
Claim verified : Transfer

of requisite amount to
hospital
The claim amount is
directly transferred
to hospitals account
Complete cashless
insurance is easy to
implement for people
without a bank
account .
Roll-out strategy
Product Design
Network partners
low premiums
Simple products
encompassing most
health issues
Flexible payments
Service provider:
RSBY empanelled
hospitals
Sales network:
Referrals scheme
Communicate
Category creation
Product acceptance
and adoption
Loyalty creation and
relationship building
Claim settlement
Case approach
Strategy overview
Product design
Network partners
Communication
Claim settlement
Roll-out strategy
Roll-out strategy
Identify areas
with unmet
demand
Areas without
insurance coverage
Affordability of
insurance premium
Week 1
Analyze
demographics &
scheme
feasibility
Income levels
Education
Financial inclusion
Week 2
Week 3
Check
availability of
healthcare
infrastructure
Check
availability of
sales channels/
networks
Existence of RSBY
empanelled
hospitals
Possibility of tie-up
with RSBY hospitals
Week 4
Week 5
Reach and scope

of potential
channel partners
Feasibility of
partnerships
Week 6
Week 7
Execution
Communication
Direct sales
Claim settlement
Week 8
Week 9
Identify areas with unmet

demand
Conclusion
Analyze demographics &

scheme feasibility
Check availability of healthcare
infrastructure
Tie-ups with healthcare providers

Tie-ups with sales channel partners
Check availability of sales channels/ networks
Week 10
Week 11
Week 12
Week 13
Week 14
Week 15
Week 16
Week 17
Week 18
Execution
Risk & Insurance education
Product & logistics education
Initiate targeted direct sales
Set up kiosks and channel sales teams
Relationship building
Referrals
Communication
Sales
Case approach
Strategy overview
Conclusion
Conclusion
Actionable
Product design
Challenges
It may be difficult
to convince
hospitals to give
cash discounts as
they may not see
tangible benefits
from increased
occupancy
Way forward
Network partners
The non hospital

network partners
may not perceive
value in MIBLs
proposition and
hence a
hinderance to
execute the plan
Communication
Claim settlement
Many BTL
campaigns and
detailed personal
interactions with
customers may
increase operational
costs and stress
margins
To have cashless
treatment for
emergencies, all
hospitals may not
be comfortable
with accepting
delays in
payments
These are genuine issues and can only be overcome with the experience of a successful pilot.
Once the scheme is rolled out in one district and the benefits are documented, we can then use
our reach and networks to trigger a domino effect across various geographies. The first push will
however have to come from the empirical data and the willingness of a health service provider
to join hands to enable RISE.
Thank you

War Room

Caricato da

Informazioni sul documento

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

War Room

Caricato da

Copyright:

Formati disponibili

Team Kung-Fu Pandey || Batch of 2014, FMS Delhi

Financial services- Rural health insurance

How to innovate disruptively , to enable health

Roll out plan

Insurance sector in India

Rural India understanding

Overview: Insurance in India

A risk mitigation strategy that allows individuals to transfer risk from

Indian insurance: Trends

Indian insurance: Growth drivers

Five new distribution channels ( broking ,

Increasing rural penetration to drive growth

Insurance sector in India

Rural India understanding

Insurance brokers and their role

Understanding rural India

Who is the rural consumer?

Who is the rural consumer ?

Housing :48 % of rural population resides in

Income and expenditure

Income class (average annual

Average annual household income is Rs.

The share of expenditure on non foods is

27001 and above

Combination of healthcare and transport has

Who is the rural consumer?

Exposure to financial services in rural India

Rural India has seen

~30% of rural farmers have credit cards

Insurance in rural India

Share of rural credit

In contrast to financial services, current

Non-life insurance products are expected

Reach of rural insurance

Rural insurance uptake

Who is the rural consumer?

Consumers attitude towards health and insurance

Where do the rural poor go for treatment?

~50% poor families have major health crisis each year

Hospitals are visited ~30% of reported health incidents

Major source of finance for health expenditure is loans from

Indian poor and insurance

What is the biggest risk as perceived by

Majority rural consumers feel health insurance schemes in

Impediments to health insurance include:

Complexity of insurance product

Lack of easy access (Delivery)

Property Crop failure

Who is the rural consumer?

Why health insurance penetration is low: Issues

Need for low

Demand side issues

Demand side issues (1/5)

Demand side issues (2/5)

Demand side issues

Perceived benefits of health insurance

Health insurance awarenenes is heavily

Not just inform, but

Most rural people are not aware of all entitled

Demand side issues

Demand side issues (3/5)

Hum toh fit hai sahab, beemar nahi

Status Quo Bias

People believe that the present state