MR Microinsurance_2012_03_29.indd - International Labour ...

196 Life insurance
four of them), providing some preliminary lessons for other insurers in a similar
position, namely:
– determine business and design priorities and stick to them;
– prioritize distribution;
– stimulate trust and loyalty; and
– design for simplicity, focusing on customer understanding.
Trade-offs are an unavoidable part of the product design process. Ultimately,
insurers need to make their own decisions on these issues, acknowledging the
importance of their context. Customer satisfaction does not come easily.
A number of questions have emerged in the course of this research that could
not be answered with the information available from insurers. Further research is
needed in a number of areas, including:
– the effectiveness of different distribution channels and commission models in
delivering sales, and the quality of these sales, in terms of persistency rates, for
each of these models;
– the take-up and persistency of customers across product variations, for example,
the term of policies purchased and the level of cover – and premium – where
options are available;
– incidence and causes of policy lapses, characteristics of lapsing customers, and
influence of product features (such as surrender terms) on lapse rates;
– the proportion of group members taking up cover made available to them
through the group and the persistency experience of the members; and
– customer satisfaction levels and the link to product design.
All of this research requires considerable commitment from insurers and some
of it might be difficult to cover in the public domain, but these insights would be
of tremendous benefit to others considering a venture into this segment.