Transcript Document

Key Findings
Microtakaful Survey Indonesia
Jakarta
April 24, 2014
Research Team
Mutia Sari
Riauli P
Nick Thornton
06/07/2015
Microtakaful Conference Indonesia
Page 1
Key Insights
1. Great need for awareness
2. Context matters
3. Importance of distribution channels and networks
4. Shared surplus is extremely helpful
5. Preference of traditional distribution channels and payment
mechanisms
6. Risk priorites of Low-income Indonesians haven’t changed
7. “Low-income” people can afford more than we thought
8. Importance of Flexibility in Premium Collection
9. Bundling of Microtakaful with Banking Products
10. Micro health takaful is complimentary to national health insurance
11. Concept of Ta’awun in marketing and awareness
12. Need to Create a Takaful Experience - Differentiate Takaful from
Conventional Insurance
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Page 2
Field Research in Review
Focus Group Discussions
(FGDs)
• 13 FGDs
• 109 participants.
• 3 groups only men, 3 groups
only women, and 7 mixed
gender groups
• Locations: DKI Border, West
Java, Central Java, East Java,
Aceh
Interviews
• 26 individuals
• 3 group interviews
• 26 interviews with practitioners
representing 19 different
MFIs/Cooperatives
• 11 insurance professionals
consulted
• 35 Questionnaires for MFI staff
• Additional locations - North
Sumatra, South Sulawesi
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Page 3
Provision of Microtakaful
Formal
Informal
• 3 of 5 fulll-fledged Takaful
operators sell microtakaful
products
• Common among IMFIs &
cooperatives
• 4 of 40 Takaful windows sell
microtakaful products
• 8 companies will launch
microtakaful products in the next
2 years
• Include various benefits for
members such as:
•
Credit life (for death of borrower
or spouse, terminal illness,
business loss due to fire)
•
Hospitalization benefits
•
Ambulance service
•
Educational scholarships
Page 4
Microtakaful Network Highlights
TAKMIN
• 43 MFIs primarily in Jakarta and West Java
Sidogiri Group & BMT Sidogiri
• Largest Islamic cooperative in Indonesia
• Branches in 10 provinces on islands of Java, Kalimantan, Sumatra,
and Bali.
• Outreach of upwards of 500,000 people
Allianz
• Insures over 2 million people nation wide through distribution partners
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Page 5
Partnerships
•
Distribution
•
•
MOU
Post Office
Distribution
Pawn Shop
Channels
Dual Role of MFIs
Piloting & introducing Microtakaful
•
Dual Role of Zakat Funds
•
Role of TA
Bank BNI
Bank BRI
Bank Mandiri
•
Industry Cooperation
Bank BTN
•
Company cooperation
PNM
•
Indomaret
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Life and General Takaful
Companies
Page 6
BMT Sidogiri
Logo
Broker
Microinsurance Logo
06/07/2015
Microinsurance Characteristics
Takaful
Provider
Page 7
Microtakaful Market Demographic Profile
1. Low income (often but not always)
 66 of 109 FGD participants reported monthly income. The average
income of respondents was Rp 1,971,969.70 per month.
2. Unpredictable Income (almost always)
3. Vulnerable to Economic Shocks
4. Marred Identity/ Powerlessness
5. Many and various segments (21 + types of occupations)
 Farmers*
06/07/2015
Page 8
Insurance Awareness, Understanding & Perception
Awareness
Perception
• High
• Important
• Helpful
Understanding
• Expensive; For the rich
• Insurance is like a savings
product
• Claims process is difficult
• There should be premium
refund if there is no claim
• Credit Life & Motorcylce
insurance understood very well
06/07/2015
• Complicated
• Negative experiences
•
Fraud
•
Policy Lapses
•
Difficult Claims Process
Page 9
Takaful Awareness, Understanding & Perception
Awareness
Perception
• Low, even among those
participating in Islamic MFI
• Very positive except for a few
exceptions
Understanding
• Excludes non Muslims
• Most didn’t know the difference
between conventional insurance
and takaful
• If it is Shari’ah compliant, and
approved by local leaders, it
must be a good thing
• Halal
• Specifically made for Muslims
• Similar to Islamic finance with
some type of profit sharing
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Page 10
Responses to Takaful among Low-income Muslims
1. Prefer conventional insurance
 Past bad experience with Islamic Finance
 Consider it to be a change in name only, not true Takaful
 Due to lack of product knowledge, feel more comfortable with
conventional product
 Prefer a national microinsurance product that everyone can use regardless
of religious beliefs
2. Prefer Takaful if the price is right
3. Prefer Takaful even if bought at a slight premium (IDR 5,000 –
10,000)
4. Prefer Takaful even if much more expensive (IDR 25,000 or more)
5. Prefer only Takaful
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#
Individual Risk/Problem
Risk 1= 3 points, Risk 2=2 points,
Risk 3=1 point
Risk Ranking # of FGDs
By # of Points Mentioning Risk
(n=70)
(n=13)
1
Illness
115
13
2
3
103
40
13
4
34
27
10
12
6
Education
Business Capital /Lump Sums of
Money
Daily Living Expenses
Death (including cost of cultural
ceremonies)
Accident
22
8
7
8
9
Retirement/pension
Motorcycle (in general)
House (in general)
20
11
9
3
2
4
10
11
12
13
Haji/Umroh
Business
Religious Holiday (Lebaran)
Social Pressures (invitations to
community events)
Poor Education Facilities
Debt
Livestock
9
8
7
5
1
1
1
1
3
2
1
1
3
2
4
5
14
15
16
06/07/2015
Individual Risk
Priorities
Page 12
Ranking by Group Decision
Risk 1= 3 points, Risk 2=2 points, Risk 3=1 point
#
Risk/Problem
Group Ranking Score (n=12)*
1
Illness
25
2
Education
18
3
Living Expenses
9
4
Business Capital
7
5
Accident
5
6
Death
4
7
Cost of Livestock
2
8
Business
2
9
Failed Harvest
1
10
Death of Livestock
1
11
Social Pressures
1
12
Motor Cycle (cost of upkeep
and repairs)
1
13
Cost of House/Rent
1
Group Risk
Priorities
*One FGD did not rank risks as a group
Page 13
Ability to Pay Overview
Average Individual Affordability
Standardization of Individuals’
Ability to Pay per Month
Average of all Individual
IDR 79,984.17
Responses (n=100)
Average of Individual
IDR 63,065.40
Responses from FGDs
(n=79)
06/07/2015
Average Group Affordability
Standardization of FGD Community Price
Affordability (n=13)
Average per
Month
IDR 26,474.36
Range per
month
IDR 4,166.67 to IDR
50,000.00
Page 14
Individual Ability to Pay
Individual Price Affordability of FGD and Interview Participants
Frequency
# of
Average
Respondents Affordable Price
N=100
Average Affordable
Price Standardized
per Month
Week
2
IDR
6,000.00
IDR 24,000.00
15 Days
5
IDR
2,000.00
IDR 24,000.00
Monthly
55
IDR 126,272.73
IDR 126,272.73
3 Months
9
IDR 130,555.56
IDR 43,518.52
4 Months
11
IDR 120,000.00
IDR 30,000.00
1 Year
18
IDR 109,166.67
IDR
9,097.22
Page 15
Distribution Channels and Payment Preferences
Trusted Payment Partners
• Post Office
• Bank or local financial institution
• Agent Home visit (if permission from Community Leader)
• Insurance office
“Kantor pos mudah. Daripada ke indomaret, itu perorangan. Kalau pos
giro, itu persero. Sama negara diakui.” – FGD Participant from
Bandung
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Microtakaful Products
1. Life/Family Takaful – preference of a lump sum of about IDR 10
million for death, but an income stream afterwards.
 Exception was for investment
2. Educational Plans – preference of policies of 5 years or less
3. Health Products – despite the national health care plan BPJS
beginning to become operational, and the current existence of
programs such as JAMKESMAS and JAMSOSTEK, there is still a
demand for health insurance!
 Surgery & Hospitalization
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Obstacles for Formal Microtakaful Participation
1. Insurance or Islamic Finance Trauma from bad past experiences
 Lack of Trust - Desire a trusted payment method
2. Affordability or wrong perception of affordability
3. Unstable or Seasonal Incomes
 Policy period too long
 Payment frequency doesn’t match income stream
4. Fear of forgetting to pay premium and policy lapsing
5. Religious/ Cultural Obstacles
6. Lack of knowledge or awareness of Takaful
 Tidak kenal maka tidak sayang (if you don’t know it, you can’t love it)
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Page 18
Terima Kasih!
Thank You!
06/07/2015
Page 19