Well, my 15 minute trip to the Blue Pearl hotel became a 40 minute trek through Dar Monday morning traffic. The driver gave me a lot more scenery driving through dirt roads and back alleys to avoid the traffic.
I left an hour in advance, so I got to the workshop with some time to spare and catch up on the news. This time I was greeted by another person asking about the American elections. This time a man from Tanzania.
He wanted to know what was going on with the chaos in Florida. I said I hadn't heard and he showed me the top story of Google Tanzania . Florida voting debacle causes chaos and confusion.
I surfed CNN and couldn't find anything. I even went to the Miami Herald and it was not in their top stories. I searched the paper and there it was. Several pages back. Evidently a polling place in Miami had decided to not open because the mayor and deputy mayor of Miami, couldn't decide whether to open the polling for 4 hours on Sunday. Florida had evidently disallowed early Sunday voting this year because of the large turnout in the last presidential election on Sunday which had favored Obama. Someone, changed that at the last minute without the mayor's consent, and well it ended in confusion. If you want the details here is the story as it didn't seem to appear in network news outlets at the time I am writing this.
http://www.miamiherald.com/2012/11/05/3082304/voting-debacle-in-florida-causes.html#storylink=misearch
I told him that it appeared to be an isolated incident at one poll in Florida, but I think he found that hard to believe since it was the top stories that came up when he opened up Google. I don't think he really believed me. So for the second day in a row I had to concede that I just didn't know and the "I guess democracy can be a little bit messy at times."
It did make we question how other people in the work view us based on the news stories they see that we may not, and what kind of algorithm Google in Tanzania has that pulls up this story when it is not covered in most U.S. news outlets. I am fascinated by how much interest there is in U.S. elections. I suppose in the U.S. we don't have an equivalent event where another country's election would affect our growth and stability in the way that our government does other parts of the world.
Anyway, I was glad when the workshop started as I was on firmer ground discussing insurance. Had some good learning lessons on the simulation running the microinsurance company . Here are some insights from the day
1. Factors Affecting the Microinsurance Purchase Decisions
- Perception of Insurance (unfortunately there have been several examples of insurance agents who sold products and then collected the money and took off or of companies that were undercapitalized and went under).
- Understanding the Insurance Concept (Examples from Mongolia and other countries where insurance did not exist made it difficult to distribute microinsurance as people had no idea what insurance was). It was interesting to see that most microinsurance companies have public education as part of their expenses and they even have an education expense ratio.
- Product/Demand Match- This came up in discussions yesterday too. Too many commercial insurers take off the shelf products and try to sell them in the microinsurance market and they fail. The needs for simplicity, affordability, understanability, value, and efficiency for microinsurance requires custom products and processes.
- Easy Payment Mechanism- Has to be a way to make smaller affordable payments from location where poor live and work.
- Cost of Coverage- Product has to have relevant limits and benefits but has to be cost effective.
- Available Income for Insurance- This came up last year at Rio conference. And it was mentioned several times in this workshop. Companies do market research, develop products that meet what people say they want and then few people buy it because they need the money for seeds, or to send their kids to school, or something like that. I spoke with one executive with an Indian mutual insurer who was frustrated by this issue who said that they just started developing four or five products to offer and then see what people take up. (He admitted that the regulatory environment for mutuals there permitted that kind of experimentation, but that doesn't usually exist with insurance regulation).
The keys to success in microinsurance were seen as 1) knowing your clients, 2) knowing how to reach those clients, and 3) being efficient. Trust was seen as critical for success as well. Important goals to sustainability were 1) to have access to large number of insureds, and 2) offering low cost policy.
As mentioned earlier, cost is critical. In order to lower costs company has to be efficient and have at large pool of policyholders in order for pooling of risks to work and adverse selection to be avoided.
Paying claims was also seen as a way of driving up demand. One partcipant said here company saw its policies go up by five after it paid off on a flood loss.
Another said that his company had a requirement that the agents pay the funeral insurance coverage while the famiily was AT the Funeral. This gave them the largest exposure since all the mourners were there and saw the payment being made. This helped in getting the word out about insurance and developing trust. (I think this should come with warning: Please don't try this at home"
Examples of how microinsurance products have adapted include:
Going from hard to sell and understand individual policy rating to community rating
Including spouse as insured as well as the borrower in credit life insurance
Reducing the exclusions for life insurance as the date for when claim was made moves farther from inception. Originally had lots of exclusions. Basically just put in a waiting period with limited payment amounts for first six months and then after that exclusions were lifted.
Make documentation required for making claim easier in order to be able to process claims quicker.
After the workshop I took off for Best Western. Fought through rush hour traffic. Got to hotel and had a cold one while watching the fishing boats. See below. The fish were really jumping high out of the water and entertained the patrons while we ate dinner and I wrote this blog.
More tomorrow.
Jim
