Comparative analysis of life microinsurance providers and their products in two selected countries with improvements

Doctoral Thesis / Dissertation, 2012

93 Pages, Grade: 1,7



List of abbreviations

List of figures

List of tables

1. Introduction
1.1. Problem description
1.2. Research objectives
1.3. Definition of keywords
1.3.1. Microinsurance
1.3.2. Microinsurance products
1.3.3. Microinsurance providers
1.3.4. Market analysis

2. Conception of the market analysis
2.1. Main problem and research aims
2.2. Data sources
2.3. Data assessment method
2.4. Data assessment tool
2.5. Sampling plan
2.5.1. Determination of considered countries Microinsurance sector in India Microinsurance sector in Brazil
2.5.2. Determination of considered product
2.5.3. Determination of considered providers
2.5.4. Determination of considered items
2.6. Form of questioning

3. Realisation of the market analysis
3.1. Data assessment
3.2. Data and information analysis
3.2.1. Data preparation
3.2.2. Data evaluation
3.3. Representation of the results
3.3.1. Results for India
3.3.2. Results for Brazil

4. Suggested improvements
4.1. Conceptual framework
4.2. Situation
4.3. Objectives
4.4. Strategy and tactics based on the extended marketing mix
4.4.1. Product
4.4.2. Price
4.4.3. Place
4.4.4. Promotion
4.4.5. Service
4.5. Actions and Controlling

5. Critique

6. Conclusions

List of literature

List of Internet links

A Other participants in India
B Other participants in Brazil
C Life microinsurance products and providers in India
D Life microinsurance products and providers in Brazil
E Sources India
F Sources Brazil
G Email American Life-Freitas, R. 2012-02-13, 01:33 pm
H Email Banestes Seguros-Siqueira, R. 2012-02-13, 02:28 pm
I Email Allianz-Ribeiro, A. 2012-02-23, 03:01 pm
J Email MetLife-Satake, C. 2012-02-13, 07:21 pm
K Email Luterprev-Dienstmann, P. R. 2012-02-13, 07:15 pm
L Email Caixa Seguros-N., N. 2012-02-16, 12:18 pm

Insurance in lieu of an oath

List of abbreviations

Abbildung in dieser Leseprobe nicht enthalten

List of figures

Figure 1: Microinsurance market potential

Figure 2: Microinsurance market participants

Figure 3: SOSTAC® planning framework

List of tables

Table 1: Microinsurance market potential of the BRICS

Table 2: Country profiles of India and Brazil

Table 3: Item evaluation for India

Table 4: Item evaluation for Brazil

Table 5: Inflation-adjusted amounts insured in India

1. Introduction

1.1. Problem description

In developed countries, the penetration of insurance is high and markets often appear saturated. In contrast there is a large potential market of between 1.5 and 3 billion insurance policies in emerging countries, and only 5 percent of these people are so far covered.[1] Previously the growth rate in developing countries was over 10 percent per year and predictions go as far as a seven-fold increase over ten years.[2] Also, a correlation between a country’s development level and insurance coverage has been observed,[3] so that great potential can be seen in implementing microinsurance in developing countries. Microcredits have proven that it is possible to enter emerging markets profitably.[4] For insurance companies seeking growth strategies, diversification with microinsurance products in emerging markets may be adequate.

Especially poor people are exposed to risks due to poor hygiene, nutrition, safety precautions, and medical care. Also natural disasters, climate, and demographic change have even larger impacts.[5] Limited resources can lead to large financial disruption in the case of unexpected events.[6] Life insurance provides coverage in case of death. It is easy to provide and there is a high demand.[7] Yet, there is little information about providers and their products. Currently many researches concentrate on theoretical models and not on what is done in practise. Where are their differences in supply and product design? Where are their strengths and weaknesses? Answering these questions shall help make life microinsurance more feasible, acceptable, and affordable for customers and providers.[8]

1.2. Research objectives

This dissertation aims on revealing differences between life microinsurance providers and their products in two selected countries, on which basis improvements shall be suggested for providers and products in both countries regarding the extended marketing mix.

Due to differences in risks and the little research on microinsurance, differences in situation, objectives, strategy, tactics, actions, and controlling are presumed. Analysing these points in two countries is expected to show common practices and where one side can learn from the other.

1.3. Definition of keywords

Since microinsurance is rather unknown, this chapter gives a short introduction of the most important keywords and points out the restrictions of this thesis.

1.3.1. Microinsurance

Microinsurance provides insurance protection to low-income people.[9] Like traditional insurances, it allows consumers to transfer their risks[10] in exchange for premium payments proportionate to the probability and cost of the risk involved.[11] It is an ex ante formal method of risk management.[12] Yet, this form of insurance concentrates on the special needs of poor people, since they are very vulnerable to risks and far less able to cope with occurring crises.[13]

Together with microcredits and microsavings, it forms microfinance.[14] Of these, microcredit is best known, also since Muhammad Yunus and the Grameen Bank received the Nobel Peace Prize in 2006[15] for “their efforts to create economic and social development from below”[16]. Microcredit helps lowincome people grow economically and move out of poverty, and microinsurance makes this growth sustainable and prevents from falling back into poverty. This shows why microinsurance is often sold by microcredit organisations.[17]

Next to this social-protection approach, microinsurance is a market-based approach enabling a new market for insurers.[18] Offering insurance products to low-income people must no longer just be a part of corporate social responsibility, but it is a corporate growth strategy.[19] Using Ansoff’s matrix, a company has four ways to grow, based on the two dimensions: Product and market. Products are defined by their physical and performance characteristics. Markets then are an equivalent set of missions, the products shall accomplish.[20] For insurance companies in industrialised countries, offering microinsurance is a form of concentric diversification with marketing and technology relation. Insurers can satisfy the need for risk protection and make a long-term investment by building up brand value, customer connectivity, and achieve the trustworthiness and acknowledgement needed for future development.[21] “Today’s low income communities in China, India or Latin America could be tomorrow’s affluent consumers.”[22]

The target group for commercial microinsurance are those earning between 1.25 and 4 dollars (international dollars based on the purchasing power parity in the year 2005) a day. This is an estimated market of 2.6 billion people. The 1.4 billion people earning less than 1.25 dollars a day will need support by state or development aid agencies to gain access to microinsurance.[23] Figure 1 visualises this.

Abbildung in dieser Leseprobe nicht enthalten

Figure 1: Microinsurance market potential

Source: Adapted from: Schweizerische Rückversicherungs-Gesellschaft Aktiengesellschaft (AG) Economic Research & Consulting (2010), p. 11.

1.3.2. Microinsurance products

The insurance product is the service sold by insurers. The insurer promises to provide a certain insurance benefit in case a prior agreed condition occurs. This is the insured event. The benefit can be an agreed sum of money, for example (e.g.) with life insurance, or the settlement of the resulted damage, e.g. with liability or household contents insurance.[24] Therefore, the policy holder agrees to pay the calculated premium and to fulfil the obligations.[25] In general, the insurance coverage begins with the payment of the first premium.[26] The premises of the coverage arise out of the contract and the policy conditions.

The speciality of insurance products is that as services they are immaterial and are in need of explanation. The customer cannot assure himself of the product quality beforehand. He must count on the fact that the product has the desired quality. Therefore, insurances are goods that need trust.[27] Even after purchase or signing the contract, as a rule, the customer receives no immediate confirmation to have chosen the right product and the right provider. Only in the insured event, does the insurance product prove itself valuable or not.[28] For this reason, the detailed clarification with regard to the insurance extent, and the rights and duties which arise from the contract is very important.[29]

Most microinsurance products cover the same risks as in traditional markets: life, health, accidental death and disability, property, index,[30] livestock, and crop insurance.[31] 2007, a research identified 357 microinsurance products separate from the 116 social security schemes in 100 countries.[32]

In order to meet the special needs of poor people

- The premiums must be affordable and payable in small sums in a non-bureaucratic way. Therefore, the benefits are small, too.
- Terms and conditions of the policy must be kept simple.
- Claims regulation must be quick and uncomplicated.
- Special strategies are needed, to create better awareness and trust in insurances in general.[33]

Yet, the core principals of insurance must be kept, such as mechanisms against adverse selection, control of moral hazard, and prevention of frauds.[34] Adverse selection describes that people feeling in greater risk a more likely to look for ex ante risk management forms.[35] Moral hazard is the term used for the change in behaviour after the consumer has concluded an insurance contract. The reason for this change lies in the risk transfer, meaning that the beneficiaries no longer suffer a loss or damage if the insured event occurs.[36]

1.3.3. Microinsurance providers

This thesis focuses on the supply of microinsurance through commercial insurers that provide microinsurance products for a long-term profit. This basically involves four categories of market participants: Reinsurers, regulated or informal insurers, delivery channels, and policy holders. Further, participants at the meso- and macro levels are relevant, as shown in the figure below.[37]

Abbildung in dieser Leseprobe nicht enthalten

Figure 2: Microinsurance market participants

Source: Adapted from: Lloyd’s (2009), p. 12.

Reinsurance is a special security system between insurers. A reinsurer does not have a contractual relationship to the policy holder, but a secondary relationship to the original risk insured through the insurer. It aims at taking over the actuarial risk of the insurer due to the possibility of divergence in the course of damages or losses.[38] Worldwide, reinsurers are involved in microinsurance initiatives supporting the product development or reinsuring particular schemes.[39]

Insurers develop the products, in some cases together with the distributors, carry the risks, and perform the administration in terms of premium collection and claims payouts. They may be regulated or informal. Informal microinsurance providers are tendentially community-based organisations (CBOs) or nongovernmental organisations (NGOs). Regulated and mutual insurers are run by professional insurance employees, and are normally regulated and supervised, sometimes under a Cooperatives Act.[40]

The delivery channels bring the products to the customers. Since distribution costs must be kept low, delivery channels are needed that have the potential to reach large numbers of customers. For this reason they are mostly institutions rather than individuals, like microfinance institutions (MFIs), NGOs, post offices, employers, and other organisations with large networks.[41] There are also brokers, governments, and retailers selling microinsurance policies,[42] although brokers tend to be more active in the more profitable commercial or multinational markets.[43]

Policy holders can be individual people, families, or other groups e.g. employees.[44]

Participants at the meso- and macro levels are “government policymakers, regulators and supervisors, international organisations, local and international NGOs, consultants, actuaries, providers of IT services, and communication experts. They are not directly in the microinsurance supply chain, but they shape the business environment and provide some of the capacity that allows microinsurance to prosper.”[45]

1.3.4. Market analysis

A market analysis is based on Porter’s Five Competitive Forces-Model. The threat of potential entrants, the bargaining power of buyers, the threat of substitute products, the bargaining power of suppliers, and rivalry among the industry competitors are the five forces which influence competition and profitability.[46] Therefore, statistical- and opinion surveys are carried out. A systematically methodical examination of these forces is required to gain a long-term market monitoring and market transparency on which the business policy of the company can be established.[47]

The market analysis of this thesis is adapted from the marketing research process defined by Philip Kotler, Kevin Lane Keller, and Friedhelm Bliemel. It applies to the chapters 2 and 3. A systematic marketing research consists of the steps ‘definition of the main problem and the main research aims’, ‘conception of the research plan’, followed by the practical ‘data assessment’, ‘data and information analysis’, ‘representation of the results’, and finally, the ‘decision making’.[48] In this thesis, it has a comparative character. It compares and contrasts the rivalry among the industry competitors in the life microinsurance market of two countries, whereas they are both equally weighted.

2. Conception of the market analysis

2.1. Main problem and research aims

The first step requires the definition of the main problem on which the following descriptive survey is based:[49] Which differences are there between life microinsurance providers and their products in two selected countries?

The following research aims arise from this:[50]

- Which countries are appropriate for a comparison?
- Which life insurance products are there?
- Which life microinsurance providers and products are there?
- Which items are to be considered?
- Which differences exist in situations, objectives, strategy, tactics, actions, and controlling?

2.2. Data sources

The material for the analysis is derived from primary and secondary data. As far as possible, existing information, which was gleaned for other purpose, will be used. This is inexpensive and accessed quickly, although the information can be elusive, obsolete, inexact, incomplete or even unreliable. If the secondary data is insufficient, additional primary data will be gathered for this analysis. Since no comparable analysis exists, it allows and requests an own compilation of the required information.[51] Main sources will be insurance companies, microinsurance initiatives, governments, and financial service brokers.

2.3. Data assessment method

The data assessment method is an exploratory monitoring of the available information complemented by inquiries.[52] By monitoring the market participants at micro-, meso- and macro level existing information shall be composed in a new way. The desk research includes seeking data via the Internet, literature, microinsurance experts and providers. The assessment will have a deductive character, starting with monitoring information about the chosen countries, the respective insurance companies, those offering life insurance, to finally identifying those offering life microinsurance.

2.4. Data assessment tool

A research matrix, as a form of a questionnaire, will be used to describe the providers and products. The analysis will be a quality-based, rather than a quantity-based approach because the microinsurance market is still fairly new, and not many companies and products are expected to be found. Classifying the meagre data might mean losing individual information and not gaining information on what the companies really do. For this reason a mathematical evaluation will not be extensive but only involve univariate operations. The items, as assessment criteria, require open answers.[53]

The design of the assessment tool is based on the structure of the India Infoline Limited (Ltd),[54] a financial service platform.[55] A first check has shown that this is also the main information presented on the company’s websites. For each country a separate matrix will be arranged. Each item is a column and each product is a line.

2.5. Sampling plan

The sampling plan requires decision making about the entirety, the size of the sample, and the selection process of the considered countries, providers, products, and items.[56] A detailed analysis of all providers and products is not foreseen.

2.5.1. Determination of considered countries

For developing countries, microinsurance can be helpful in terms of social protection and poverty reduction.[57] Yet, taking the other point of view on it, offering microinsurance must also be profitable.[58] In determining the two selected countries, the focus is laid on the so-called BRICS countries. The abbreviation stands for the initials of the emerging countries Brazil, Russia, India, China, and South Africa. In 2001, Jim O’Neill from Goldman Sachs used this abbreviation for the first time and stressed the future economic weight of the first four countries.[59] 2010, South Africa officially became the fifth member nation.[60] Regarding the gross domestic product (GDP), the ranking of the top economies has changed indeed. The BRIC countries have climbed two to seven positions in the period of 2000 to 2010 in this ranking, whereas the former Group of Seven (G7) countries, “an informal forum of Heads of State and Government”,[61] have either maintained their position or descended by one or two positions.[62] “About 42 percent of the world's population, and 30 percent of the world's territories, are in BRICS countries. It is expected that by 2015, the GDP of BRICS will reach 22 percent of the global total.”[63]

The following table shows the percent of population living in households with consumption or income per person below the poverty line of 4 dollars a day for the BRICS, based on the survey year 2005.

Abbildung in dieser Leseprobe nicht enthalten

Table 1: Microinsurance market potential of the BRICS

Source: Adapted from: The World Bank (Povcal Net),

As Russia has a comparably small percentage of population living below the poverty line it is not as interesting for a comparison of countries. China shows no explicit interest in the regulation of microinsurance, which makes it less favourable.[64] So far, the number of generally insured people lies at 6.9 million in India, 5.6 million in Brazil, and 4.1 million in South Africa.[65] This, and the fact that South Africa is still far away from any regulation,[66] means it is not considered, too. For these reasons, microinsurance providers and their products in India and Brazil will be compared.

The next table shows some key figures of the two chosen countries. The human development index (HDI) combines the three dimensions health, education, and living standards, in one figure. It is a reference for social and economic development, expressed as a value between 0 and 1.[67] In the following, an introduction to the microinsurance sector of the chosen countries is given.

Abbildung in dieser Leseprobe nicht enthalten

Table 2: Country profiles of India and Brazil

Source: Adapted from: Bundeszentrale für politische Bildung (2012a); Bundeszentrale für politische Bildung (2012b); United Nations Development Programme (2011), p. 139 f; Schweizerische Rückversicherungs-Gesellschaft AG Economic Research & Consulting (2011), p. 33. Microinsurance sector in India

India has taken a special role in the development of microinsurance: “Nothing globally has so dramatically changed the face of microinsurance as India’s regulatory compulsion.”[68] Due to regulations made in India in 2002, which “compel insurance products to be sold to the poor, they account for the surge in the life insurance provided, as well as the number of life products offered since 2002.”[69] This has led to a great quantity of products.[70] Furthermore, maturity and death benefits are tax free.[71] The number of covered lives through microinsurance in India is 30 million,[72] but the total market is estimated to be between 140 and 300 million policies.[73]

Insurance providers are in general formal registered insurance companies, owned by government or private. The few cooperative and community-based insurance systems are managed by NGOs.[74] Life insurers may not offer products of other insurance lines due to the law on separate accounts and funds.[75] Distribution is mainly through MFIs as partners or agents, which can also be NGOs, self-help groups or their associates, and co-operative societies.[76] The perception of insurance as a financial product is low, even though it varies by region.[77] Other reasons for not having insurance are to not afford it or a perceived low benefit, leading to a lack of trust.[78] The insurance premiums are between Rupees (Rs.) 2.08 (~ EUR 0.03) and Rs. 8.33 (~ EUR 0.13) per month depending on the coverage and assured sums.[79] Rs. 100 is approximately euros (EUR) 1.53.[80] The assured sums range between Rs. 5,000 (~ EUR 76.50) and Rs. 50,000 (~ EUR 765.00). This is by definition of the national insurance authority.[81] The products are often made for groups and include non-financial benefits such as ‘surrender value’ which is a pay-back of premiums or parts of premiums if the policy is terminated.[82] Microinsurance sector in Brazil

The 7th International Microinsurance Conference in 2011 took place in Brazil. Craig Churchill, the Chair of the Microinsurance Network, claimed “Brazil can become the India of Latin America”[83]. The Brazilian microinsurance market is the largest in Latin America, and is said to triple or even quadruple, from between 23 and 33 million microinsurance customers in 2009, to 100 million customers within the next 20 years. One reason is a regulatory framework coming shortly.[84] The target market in Brazil is mostly defined using either the fixed minimum wage with its multiples, or socio-economic classes from the letters A to E. The minimum wage was Real (R$) 465 (~ EUR 204.60) in 2009 for a single person and R$ 1,395 (~ EUR 613.80) for a family per month.[85] R$ 1 is approximately EUR 0.44.[86] The proportion of population living below this level is regarded as a low-income. On the other hand, the A to E socioeconomic classes do not regard income but variables like assets and education. Class A represents the highly developed population, and class E the least developed. Microinsurance is specially made available for the classes C and D.[87]

The insurance providers are mostly large commercial companies that are bank-affiliated.[88] The informal funeral assistance which is mainly offered by funeral homes is an exception. Funeral assistance is by law not an insurance product and there is no law to be found, that life insurers may not also offer other product lines, as in India and Germany.[89] Distribution channels are primarily banks, retailers, and existing customers of other companies through direct mail or call centres. Most products include special ‘benefits in life’ and capitalisation. These benefits can be funeral and emergency assistance, discounts on medical products and clinical costs as well as food baskets. The background of this is the Brazilians’ love for life and reluctance to discuss the topic death. They are well-informed on the value of insurance, but it is not seen to be essential. In the recent past, more than 20 million people have moved from the classes E and D, into C which has led to an optimistic vision of the future. They are developing a spending rather than savings culture. This involves the risk of the newly-empowered middle class losing their social and financial inclusion, due to insufficient savings and risk protection.[90]

The insurance premiums are between R$ 2 (~ EUR 0.88) and R$ 50 (~ EUR 22.00) per month depending on the coverage and assured sums which range up to R$ 50,000 (~ EUR 22,000.00). The perception of premium level is often too high.[91]

One difficulty of this analysis arises from the fact that the term ‘popular insurance’ exists in Brazil. Life popular insurances are simple and low-cost products, with basic life and personal accident coverage of R$ 10,000 (~ EUR 4,400.00) at the maximum. Other non-financial benefits may be added although restrictions apply to age group, premium payment, profit, and other components. They are groupunderwritten but with individual insurance certificates for the insured people. Usage of alternative distribution channels seems to be the only enhancement made. On international markets this differentiation is not made. Popular insurances are mainly distinguished from microinsurance by explicitly targeting the poor population.[92]

2.5.2. Determination of considered product

This thesis focuses on life microinsurance products, as they are comparatively easy to provide, because of:

- High demand,
- Simple pricing,
- Clear defined insured event,
- Resistance to fraud and moral hazard,
- Independence on the existence and efficient functioning of other infrastructure, and
- Linking possibilities to other microfinance savings and loan products.[93]

Life insurance is the most popular insurance product with those holding a microinsurance policy.[94] Together with other risk-management tools, life microinsurance can help achieve the Millennium Development Goals established by the United Nations,[95] especially to halve extreme poverty by 2015.[96] Life insurance sub-categories are continuing family benefits, credit life, credit life plus family benefits, endowment, funeral, investments, pensions, and term.[97]

The pre-test showed that many products only cover death as a result of an accident. This means there is no benefit in the case of death due to natural causes. In order to make the data more comparable, this thesis will focus on life microinsurance products that include the coverage of death due to any cause. Yet, if a product has a more advanced coverage, e.g. endowment, it shall not be excluded. On the other hand, there are products which a company can conclude for their employees. These require product design and marketing on a b2b-level, which in particular is different from that on b2c-level.[98] To include self-employed people and their families, only products shall be analysed that are available for individuals and families.

2.5.3. Determination of considered providers

In both countries there is a national insurance regulation authority, which lists the registered insurance companies. In India this is the Insurance Regulatory and Development Authority (IRDA),[99] and in Brazil it is the Superintendence of Private Insurance (SUSEP).[100] IRDA provides a list of life insurers but does not explicitly mention those companies offering life microinsurance. It names 24 companies.[101] However, it offers a list of registered microinsurance products, not separated into life- and non-life products with 23 entries.[102] SUSEP only offers a list of all financial institutions in Brazil,[103] which includes companies offering solely capitalisation, reinsurance or open private pension. It lists 175 companies.[104] This is the basis of the further analysis.

2.5.4. Determination of considered items

After the first step, identifying the companies and their life microinsurance product names, several aspects are analysed. The chosen items are set up to prove the hypothesis of their being differences in providers and products. The first item is the product number, which is allocated by the national insurance authority. It enables a unique identification of the product, since product names often are or often seem similar. The ‘in operation from (opening year)’ gives information on the beginning of the product. It shows, how long a product has been on the market, adjusted to current demands or not. The covered risks give an overview of the product coverage. They are divided into death-, disability-, and maturity components. Death benefit is paid if the insured person dies within the policy term. In case disability occurs to the insured during the policy term, mostly due to an accident, the disability payment is receivable. On survival of the policyholder up to maturity, maturity benefit is due. In addition, another benefit, the surrender value, is scrutinised. It can be paid if the policy is cancelled before the policy ends. The last two items will mainly be important for the Indian market. Therefore, the Brazilian market is scrutinised on funeral assistance and capitalisation. Funeral assistance is defined as “the insurer commits itself to assure the reimbursement of the funeral expenses to the beneficiaries, or the provision of funeral assistance services in case of the death of the insured”[105]. Capitalisation is a benefit for the policyholder to take part in a regular lottery draw which pays out the savings component of the premium in the form of a lottery entitlement.[106] The following sector ‘about’ then describes the product features more specifically. The item ‘target group’ contains information on addressed group of people, and the ‘age group’ shows which people can make a contact. The ‘maximum maturity age’ describes up to which age the protection can exist. If the product is group-underwritten, the following item shows how many people must at least form a group. The sum assured is the benefit the customer’s beneficiary will receive in the case of death. The policy term describes how long the insurance coverage runs. Insurance protection only exists within this period. The ‘pay mode’ points out in what instalments the premium, which follows in the next column, can be paid. Finally, the ‘delivery model’ describes in which way the products are brought to the customer.

2.6. Form of questioning

The next step is to define the form of questioning. Generally, the contact can be made in written, oral, or personal form. For this analysis the written form, mainly via Internet, is the most appropriate approach. It can be used for primary and secondary data, which can be accessed within short time and at low costs.[107]

Based on the lists provided by IRDA and SUSEP, further information will be gathered in diverse publications, on the company’s and general websites, as well as via direct email contact. Therefore, search engines like ‘Google’ will be used to locate the necessary information.

3. Realisation of the market analysis

3.1. Data assessment

After defining the research objective and setting up the market analysis, the assessment could be performed.[108] It took place from 5 February 2012 to 17 February 2012 and consisted of 67 sources for the Indian products and 33 sources for the Brazilian products. Next to online and literature search, contact to several insurance companies was made, questioning them on their products. This led to six responses.

3.2. Data and information analysis

The next step is to summarise the gathered data to the basic information in order to evaluate it.

3.2.1. Data preparation

In quantitative analysis the assessed data must be brought into a data matrix, which is the basis for all statistical evaluation. It allocates the received information to variables, based on a code book.[109] In qualitative analysis the information from all sources must also be brought together to a primary resource matrix. It must be organised, easily retrievable, and processed by means of elimination of redundancies and composition of individual parts.[110]

For the analysis of India, the 23 products mentioned by IRDA must be associated to the 24 life insurers. Even though IRDA must approve every microinsurance product, the provided 23 products are extended by two products of the ‘Life Insurance Corporation of India Yogakshema’ sold through the ‘SelfEmployed Women's Association’ (SEWA). Their website gives information on the products still being sold[111] and they are mentioned in publications as life microinsurance products.[112]

Other providers and products, which were listed in diverse publications like ‘Spandana’[113] or the ‘National Insurance Company’[114], proved in a further investigation, that they had either given up on life microinsurance,[115] were only NGOs or other delivery channels,[116] or offered other microinsurances than for life.[117]

Furthermore, life insurers without an approved microinsurance product were analysed. One company does not offer life microinsurance;[118] four companies are still in the development process like ‘Bharti AXA Life Insurance Company Ltd’;[119] the product of ‘Max New York Life Insurance Company (Co.) Ltd’ has been taken from the market,[120] and the remaining four have not been approved by IRDA as special microinsurance products, such as that of ‘IndiaFirst Life Insurance Company Ltd’.[121]

These companies and products are listed in appendix A ‘Other participants in India’ with their source and exclusion reason. In total, this leaves 25 products of 14 companies to analyse for India.

Preparing the data for the Brazilian market is more extensive due to the poorer information basis provided by SUSEP. The first step here is to identify companies selling life insurances. Brazilian providers using the terms ‘Resseguradora’, ‘Resseguros’ or ‘RE’, ‘Capitalização’, or ‘Previdência Privada’ in their name are not considered, as they are reinsurers, capitalisation or private pension providers. Going deeper, those companies are excluded that have a life and pensions market share of 0.0 percent, according to Moody’s Outlook for the Brazilian Insurance Market of 2006.[122] Then those are excluded that do not present information on their website for special life insurances for low-income customers,[123] assuming they do not offer them. In the next step affiliated companies are excluded whose parent company is also part of the list, e.g. Atlântica Companhia de Seguros which is a part of the Bradesco group,[124] and those solely offering products for non-individuals[125] or motorcyclists[126]. Referring to the product restrictions, life microproducts without full coverage of death causes[127] are also dismissed. These companies are listed in appendix B ‘Other participants in Brazil’. The remaining 14 products will be analysed for Brazil.

The data matrix for India is presented in appendix C, followed by that for Brazil in appendix D. These are explained in detail in the following section.

During processing, so-called missing values are ascertained. They are absent, illogical or not allowed inputs.[128] In the majority they refer to the specification of the target group, the delivery model, and the premium. This information is not negligible in this respect, because it serves the evaluation. However, to some providers and products no information was found to the items. In this case, the suggestions must be built upon well-founded assumptions or be on a general basis. In the elimination procedure, these lead to the reduction of the sample size. The data analysis is, therefore, based on an incomplete set of information.[129]

3.2.2. Data evaluation

The data evaluation analyses and consolidates the data to an assessable size.[130] Methods of the descriptive statistics are used, which are „procedures that deal with the processing and evaluation of the examined amount of data“[131]. The procedures are divided into univariate-, bivariate-, and multivariate procedures:

- With univariate procedures one variate with its characteristics is examined, like modal value, arithmetic average, and variation.
- With bivariate procedures the connections between two variates are investigated, like the correlation coefficient r by Bravais-Pearson.
- The multivariate procedures, finally, compare three and more variates.[132]

For this evaluation mainly univariate procedures are relevant. As far as possible and useful, the data of each item will be evaluated by regarding the number of missing values, the variation and the modal value of its characteristics, and the arithmetic average of numerous items. This aims at identifying similarities, which show common practises, and gaps, which can be filled by future products. Also, it is the basis for a comparison with the products of the second country.


[1] Cp. Lloyd’s (2009), page (p.) 11.

[2] Cp. Lloyd’s (2009), p. 36.

[3] Cp. United Nations (2007), p. 1.

[4] Cp. Lloyd’s (2009), p. 5.

[5] Cp. Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung (2009), p. 4.

[6] Cp. Roth, J./ McCord, M. J./ Liber, D. (2007), p. i.

[7] Cp. Lloyd’s (2009), p. 17.

[8] Cp. United States Agency for International Development (2006), p. 6.

[9] Cp. Churchill, C. (2006), p. 12.

[10] Cp. Lloyd’s (2009), p. 6.

[11] Cp. Churchill, C. (2006), p. 12.

[12] Cp. Schweizerische Rückversicherungs-Gesellschaft AG Economic Research & Consulting (2010), p. 5.

[13] Cp. Churchill, C. (2006), p. 12.

[14] Cp. Morelli, E. et al. (2010), p. 1.

[15] Cp. Lloyd’s (2009), p. 6.

[16] Cf. Grameen Bank Bhaban,

[17] Cp. Lloyd’s (2009), p. 7.

[18] Cp. Churchill, C. (2006), p. 15 f.

[19] Cp. Schweizerische Rückversicherungs-Gesellschaft AG Economic Research & Consulting (2010), p. 8.

[20] Cp. Ansoff, H. I. (1957), p. 113 f.

[21] Cp. Schweizerische Rückversicherungs-Gesellschaft AG Economic Research & Consulting (2010), p. 8.

[22] Cf. Lloyd’s (2009), p. 4.

[23] Cp. Schweizerische Rückversicherungs-Gesellschaft AG Economic Research & Consulting (2010), p. 10.

[24] Cp. Rosenbaum, M./ Wagner, F. (2002), p. 7.

[25] Cp. Rosenbaum, M./ Wagner, F. (2002), p. 12.

[26] Cp. Cristofolini, W. et al. (2002), p. 356.

[27] Cp. Rosenbaum, M./ Wagner, F. (2002), p. 8.

[28] Cp. Farny, D. (2011), p. 677.

[29] Cp. Forstman, C./ Scholz, G. (1995), p. 193 ff.

[30] Cp. Lloyd’s (2009), p. 15 f.

[31] Cp. Roth, J./ McCord, M. J. (2008), p. 12 f.

[32] Cp. Roth, J./ McCord, M. J./ Liber, D. (2007), p. ii.

[33] Cp. Loster, T. (2008), p. 16.

[34] Cp. Degens, P./ Leppert, G. (2009), p. 30 ff.

[35] Cp. Culyer, A. J./ Newhouse, J. P. (2000), p. 567.

[36] Cp. Culyer, A. J./ Newhouse, J. P. (2000), p. 576 f.

[37] Cp. Lloyd’s (2009), p. 12 f.

[38] Cp. Farny, D. (1988), p. 689 f.

[39] Cp. Lloyd’s (2009), p. 13.

[40] Cp. Lloyd’s (2009), p. 13.

[41] Cp. Lloyd’s (2009), p. 13.

[42] Cp. Roth, J./ McCord, M. J./ Liber, D. (2007), p. 37.

[43] Cp. Roth, J./ McCord, M. J./ Liber, D. (2007), p. 38.

[44] Cp. Lloyd’s (2009), p. 12.

[45] Cf. Lloyd’s (2009), p. 14.

[46] Cp. Porter, M. E. (2004), p. 3 ff.

[47] Cp. Gabler Wirtschaftslexikon | Springer Fachmedien Wiesbaden Gesellschaft mit beschränkter Haftung (GmbH),

[48] Cp. Kotler, P./ Keller, K. L./ Bliemel, F. (2007), p. 163 ff.

[49] Cp. Kotler, P./ Keller, K. L./ Bliemel, F. (2007), p. 164.

[50] Cp. Kotler, P./ Keller, K. L./ Bliemel, F. (2007), p. 164.

[51] Cp. Kotler, P./ Keller, K. L./ Bliemel, F. (2007), p. 166 ff.

[52] Cp. Kotler, P./ Keller, K. L./ Bliemel, F. (2007), p. 169.

[53] Cp. Kotler, P./ Keller, K. L./ Bliemel, F. (2007), p. 172 ff.

[54] Cp. India Infoline Ltd. (2012a),

[55] Cp. India Infoline Ltd. (2012b),

[56] Cp. Kotler, P./ Keller, K. L./ Bliemel, F. (2007), p. 178 f.

[57] Cp. Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung (2009), p. 4.

[58] Cp. Churchill, C. (2006), p. 15.

[59] Cp. O’Neill, J. (2001), p. 1.

[60] Cp. Foreign Policy Journal,

[61] Cf. The Press and Information Office of the Federal Government,

[62] Cp. British Broadcasting Corporation (2012a),

[63] Cf. British Broadcasting Corporation (2012b),

[64] Cp. Loster, T. (2008), p. 14.

[65] Cp. Coydon, M.-A./ Molitor, V. (2011), p. 9.

[66] Cp. Business Day, Financial Mail (BDFM) Publishers Proprietary (Pty.) Ltd.,

[67] Cp. United Nations Development Programme (UNDP),

[68] Cf. Roth, J./ McCord, M. J./ Liber, D. (2007), p. 52.

[69] Cf. Roth, J./ McCord, M. J./ Liber, D. (2007), p. 31.

[70] Cp. Roth, J./ McCord, M. J./ Liber, D. (2007), p. 40; Roth, J. et al. (2005), p. 5.

[71] Cp. Government of India, Income Tax Department,

[72] Cp. Roth, J./ McCord, M. J./ Liber, D. (2007), p. 18.

[73] Cp. Lloyd’s (2009), p. 18.

[74] Cp. Micro-credit ratings international Ltd. (2008), p. 26.

[75] Cp. Insurance Regulatory and Development Authority (2012g),

[76] Cp. Micro-credit ratings international Ltd. (2008), p. 34.

[77] Cp. Micro-credit ratings international Ltd. (2008), p. 92.

[78] Cp. Micro-credit ratings international Ltd. (2008), p. 96.

[79] Cp. Allianz AG, Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) and UNDP (2006), p. 24.

[80] Cp. OANDA Corporation (2012a),

[81] Cp. Insurance Regulatory and Development Authority (2012a),

[82] Cp. Micro-credit ratings international Ltd. (2008), p. 50.

[83] Cf. Münchener Rück Stiftung,

[84] Cp. Münchener Rück Stiftung,

[85] Cp. Bester, H. et al. (no date, n. d.), p. 2 ff.

[86] Cp. OANDA Corporation (2012b),

[87] Cp. Bester, H. et al. (n. d.), p. 2 ff.

[88] Cp. Murray, A. (2006), 9.

[89] Cp. Bundesministerium der Justiz,

[90] Cp. Bester, H. et al. (n. d.), p. 2 f.

[91] Cp. Bester, H. et al. (n. d.), p. 3 f.

[92] Cp. Bester, H. et al. (n. d.), p. 158 f.

[93] Cp. Roth, J./ McCord, M. J./ Liber, D. (2007), p. 29.

[94] Cp. Roth, J./ McCord, M. J./ Liber, D. (2007), p. 29.

[95] Cp. Churchill, C. (2006), p. 14.

[96] Cp. United Nations,

[97] Cp. Roth, J./ McCord, M. J./ Liber, D. (2007), p. 29.

[98] Cp. Hutt, M. D./ Speh, T. W. (2010), p. 16.

[99] Cp. Insurance Regulatory and Development Authority (2012b), [100] Cp. Superintendence of Private Insurance (2012a),

[101] Cp. Insurance Regulatory and Development Authority (2012c),

[102] Cp. Insurance Regulatory and Development Authority (2012d),

[103] Cp. Superintendence of Private Insurance (2012b),

[104] Cp. Bester, H. et al. (n. d.), p. 45.

[105] Cp. Porto Seguro Vida e Previdência S.A.,

[106] Cp. Bester, H. et al. (n. d.), p. 2 f.

[107] Cp. Kotler, P./ Keller, K. L./ Bliemel, F. (2007), p. 180 ff.

[108] Cp. Kotler, P./ Keller, K. L./ Bliemel, F. (2007), p. 184.

[109] Cp. Esch, F.-R./ Herrmann, A./ Sattler, H. (2008), p. 120.

[110] Cp. Merriam, S. B. (2009), p. 203.

[111] Cp. Self-Employed Women's Association,

[112] Cp. Churchill, C. (2006), p. 6 ff.

[113] Cp. Churchill, C. (2006), p. 6 ff.; Churchill, C. (2006), p. 614.

[114] Cp. Churchill, C. (2006), p. 517.

[115] Cp. Spandana Sphoorty Financial Ltd.,

[116] Cp. Shepherd,

[117] Cp. ICICI Lombard General Insurance Company Ltd.,

[118] Cp. India Infoline Ltd. (2012c),

[119] Cp. Deccan Chronicle Holdings Ltd.,

[120] Cp. Insurance Regulatory and Development Authority (2012e), [121] Cp. Insurance Regulatory and Development Authority (2012f), [122] Cp. Murray, A. (2006), p. 19 ff.

[123] Cp. Generali Brasil Seguros S.A.,

[124] Cp. Bradesco Seguros e Previdência,

[125] Cp. QBE Brasil Seguros S.A.,

[126] Cp. Auxiliadora Vida e Previdência,

[127] Cp. MAPFRE Seguros (2012a),

[128] Cp. Esch, F.-R./ Herrmann, A./ Sattler, H. (2008), p. 120.

[129] Cp. Esch, F.-R./ Herrmann, A./ Sattler, H. (2008), p. 120 f.

[130] Cp. Berekoven, L./ Eckert, W./ Ellenrieder, P. (2009), p. 187.

[131] Cf. Berekoven, L./ Eckert, W./ Ellenrieder, pP. (2009), p. 187.

[132] Cp. Esch, F.-R./ Herrmann, A./ Sattler, H. (2008), p. 121.

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Comparative analysis of life microinsurance providers and their products in two selected countries with improvements
University of Cooperative Education
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"Der Verfasserin gelingt es überzeugend, die Notwendigkeit und das Marktpotential für das Produkt "Microinsurance" darzustellen. In dem Ländervergleich erarbeitet sie deutlich spezifische Anforderungen, die sich aus der spezifischen Ländersituation an diese Produkte ergeben." (Bewertung des Prüfers)
Microinsurance, Mikroversicherung, Indien, Brasilien, Versicherung, Marktanalyse, market analysis, improvements, Marketing
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Amanda Williams (Author), 2012, Comparative analysis of life microinsurance providers and their products in two selected countries with improvements, Munich, GRIN Verlag,


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