MR Microinsurance_2012_03_29.indd - International Labour ...

488 Delivery channels and intermediaries
aggregator or distribution partner. In reviewing distribution performance, consideration
has to be given to all the diff erent activities and entities in the value chain. 2
Figure 22.1 Innovation throughout the distribution process
Marketing, sales, policy administration, claims payment, servicing by third parties
Risk carrier Administrator
Source: Bester et al., 2008a; Leach, 2005.
Technology
22.1.1 What constitutes success?
Th e performance of a particular distribution model needs to be assessed from both
the client and business perspectives, because what works for the insurer and distribution
partner may not work for the client. Table 22.1 sets out some of the perspectives of
the business and the client on what can be considered distribution success. Th e table
indicates a lack of alignment between the business and the client perspective regarding
the most important aspect of the distribution process. While client acquisition and
premium collection can be most important to businesses, the claims processing phase
matters most to the client. In the short term, businesses have the greatest incentive to
invest and innovate in the sales and premium collection aspects and the least incentive
to change and optimize the claims-processing component. However, in the long run,
an effi cient and convenient servicing and claims-processing system is in the interest of
business partners as it will increase customer loyalty and keep clients coming back.
22.1.2 Active or passive sales
Th e sales aspect of distribution may be the client’s fi rst exposure to a particular
insurance product. It is thus important that the sales process allow the client to make
an informed purchase decision. Th e 14 distribution examples reviewed for this chapter
are characterized by varying levels of interaction with the prospective client during
the sales process. Client interaction can be thought of as a continuum, where the
one extreme of client interaction during the sales process can be thought of as a
“passive” process, whereas the other extreme can be thought of as an “active” process.
2 For more information on this see Bester et al., 2008.
Intermediation channel
Transaction
platform
Aggregator Clients
Policy origination, premium collection, policy administration