Financing the Risks of Natural Disasters World Bank Conference

1
Financing the Risks of Natural Disasters World
Bank Conference

• June 2003

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WORLD BANK CONFERENCE

• AGENDA
• The market Why?
• The market How?
• An emerging market The informal sector
• Risks and Rewards
• Conclusion

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THE MARKET WHY?

• STRATEGY
• Anticipation of future trends and their
  applications on society as well as on the
  company.
• Understanding of the companys strategic
  capabilities that can be leveraged into these
  trends.
• TRENDS
• Rapid urbanisation
• Breakdown of the extended family

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THE MARKET WHY?

• STRATEGIC CAPABILITIES
• Low cost admin
• Distribution management
• OPPORTUNITY
• Few players
• Significant growth potential

5
THE MARKET WHY?

• About our markets

6
THE MARKET HOW?

• Product design
• Product distribution
• Premium collection
• Benefit delivery
• Costs/costs/costs

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THE MARKET HOW?Product design

• CUSTOMER
• Culturally relevant wider family
• Affordable low minimum premiums
• Understandable pre-packaged
• Re-enforce promise more claims
• COMPANY
• Easy to administer underwriting, claims
  processing
• Manage the risk wider family, waiting periods,
  steps sums assured

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THE MARKET HOW?Product distribution

• Formula driven doing the basics right
• Mainly into paypoints - work site marketing
• Group presentations - individual sales
• Productivity great expectations
• Zoning

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THE MARKET HOW?Premium collection

• Salary deduction early is good
• Paypoint relationships
• Collection diversification
• Commercial
• Cash
• VDDO
• Technology simpler, better, faster

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THE MARKET HOW?Benefit Delivery

• Today's claims payment secures tomorrows new
  business
• DELIVERY ALLIANCES
• Speed immediate payment
• Convenience near the customer
• Seamless service one call money or the box
• SOME INTERESTING FACTS
• Average payout 650
• 98 of claims paid by EFT
• 95 of claims paid within 24 hours

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AN EMERGING MARKET THE IMFORMAL SECTOR

• Booklet based scheme through affinity group
  (usually Church)
• Weekly paid premium collected through Church
• Cover only continues if book stamped
• ALA provides Insurance Licence

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THE RISKS

• Political
• Economic
• Social
• Aids
• Death Certificates
• Financial
• Currency Risk
• Exchange Control

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THE REWARDS

• New Business - 20 CAGR
• Recurring Premium Income - 35 CAGR
• Total Assets - 44 CAGR
• Dividend - 19 CAGR
• Share Price - 21 CAGR

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CONCLUSION

• The need exists
• The need can be met . and profitably
• THROUGH
• Focus
• Passion
• Understanding

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Thank You