MicroEnsure Suraksha – India’s first mass

market free insurance product

In View Summary
In a first of its kind initiative, India’s Telenor, MicroEnsure and Shriram Life are launching an
embedded insurance product distribution scheme by offering free life insurance to its existing
47.55 million customer base as well as new mobile subscribers of Telenor India across its six
operating circles. This insurance product named “Suraksha” gives protection which will be 100
times the value of recharge and up to maximum cover of Rs 50,000 per connection for a month.

Richard Leftley, CEO of MicroEnsure encapsulated this initiative: “Embedded insurance

products cast a wider financial net, wide enough to catch the poor of India, but without the
limitations of traditional marketing and sales processes. With this venture we look forward to
creating a powerful driver of core business for our partners whilst mitigating risk for millions of
consumers in India. With this initiative we hope to set new benchmarks.”

MicroEnsure helps in designing these mass-market insurance products and in providing on-going
operational support required to make a digital product work.

Currently, only 3.9% of India’s population has an insurance cover of any type. The primary
reasons for the low penetration are issues like lack of awareness, cumbersome enrolment
process, costly premiums and lack of trust. Lack of distribution networks has also kept the
insurance penetration rate low.

CEO of Telenor India, Vivek Sood describes the partnership as “bridging the disparity in access
to life insurance among the low and middle-income individuals. With insurance penetration
being very low in the country, our scheme has the potential to empower society through financial
security. Our deep understanding of mass-market consumer behavior, a huge retail network and
efforts to create awareness around services beyond basic voice will enable us to remove
persistent financial risks faced by our customers. With the life insurance offer, Telenor will
create a unique differentiation in financial services just like we have done with our affordable
mobile service”.

To date, over 17 million Indians have enrolled themselves under this scheme, whilst almost 7.8
million customers have been insured across Telenor’s network until January 2016. Telenor
claims that it has the highest number of policy holders in the country for a single micro insurance
product.

Reported Benefits

Benefit to Customers
 More affordable and flexible premiums for India’s emerging middle class
 Faster claims processing
 Easier policy administration
 Reduced exposure to risk in case of unexpected events

Benefit to the Insurer

 More effective and relevant product design

 Reduced cost of distribution and greater reach
 Greater efficiency and penetration into new market segment
 New revenue stream for both Telenor, Microensure and Shriram Life

The Digital Insurer's View

Although the range of products MicroEnsure distributes through telecom channels is still limited,
this joint venture provides a glimpse of how life insurance will be distributed in emerging
economies. Additionally, it seems establishing partnerships with telco’s that are eager for
additional revenue streams is relatively straight forward, however servicing policies and
effectively processing claims in an emerging economy can be more elusive and it is this function
that will test the longevity of MicroEnsure distribution model.

References

MicroEnsure Suraksha – Fastest growing insurance product in India

Telenor claims to be the single largest micro insurance policy provider in India

Telenor and MicroEnsure brings insurance to Mass Market in Asia