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15 Improving client value:
Insights from India, Kenya, and the Philippines
Michal Matul, Clémence Tatin-Jaleran and Eamon Kelly
This chapter is an adaptation of Microinsurance Paper No. 12, published by the ILO’s Microinsurance Innovation
Facility (2011). The authors thank the staff of organizations that participated in the PACE tool testing for devoting
their time, sharing data and providing useful comments on the final analysis. The authors are also grateful
for comments on this chapter from Elizabeth McGuiness (Microfinance Opportunities), Michael J. McCord
(Micro Insurance Centre), Barbara Magnoni (EA Consultants), Richard Coven (consultant), Pranav Prashad
(ILO), Peter Wrede (ILO), Jeremy Leach (Hollard Insurance), Bert Opdebeeck (BRS) and Denis Garand (DGA).
In microinsurance, there is considerable emphasis on ensuring that the target
market is receiving good value for its premiums. Microinsurance providers aim
to improve their products to attract and retain their clients. Governments and
donors are searching for effective ways to incorporate microinsurance into their
development strategies. They all ask the same questions: Are clients really benefiting
from microinsurance? How does one measure those benefits? And how do
we improve the value proposition for the poor?
This chapter contributes to this discussion by focusing on improving client
value rather than proving it. 1 It presents results from PACE (product, access, cost
and experience), the ILO’s client value assessment tool, which looks at the added
value for clients from insurance products by comparing them to alternative
means of obtaining protection from similar risks.
Section 15.1 briefly describes the PACE tool and its components. Based on an
analysis of 15 microinsurers in India, Kenya and the Philippines, section 15.2
takes a practical look at opportunities to create value by expanding member benefits,
facilitating access, lowering costs and enhancing client experience. Often
these small improvements can make big differences in the way clients perceive
and respond to microinsurance products. Section 15.3 illustrates the value of
microinsurance in relation to informal mechanisms and social security initiatives.
The final section provides a country-level analysis that compares the relative
value of products in the same market, illustrating the importance of product
and market maturity.
15.1 Client value assessment framework and tool
As summarized in Box 15.1, value creation is a complex process that can be analysed
at many stages and from different perspectives. The PACE client value
assessment tool deals primarily with the first stage of value creation, when the
1 See Chapter 3 of this book as well as Dercon and Kirchberger (2008), and Magnoni and Zimmerman
(2011) for literature reviews on the impact of microinsurance.