As of December 2009
AMUCSS has distributed life microinsurance since 2005 in partnership with a broker, Grupo SEP, which connected it with the insurance company Zurich. By 2009, AMUCSS had developed significant experience in insurance and decided to integrate the broker’s functions into AMUCSS. For 6 months, it worked on the institutional design, studied the different legal options and finally decided to create an insurance intermediary. The social enterprise “Red Solidaria de Microseguros Rurales” (RedSol) was created in September 2009.
Strengthening of the distribution channel
RedSol established commercial agreements with Zurich, the risk carrying insurance company for the life microinsurance product and it started working with other insurers for diverse microinsurance products. It strengthened its partnerships with the rural organizations. By December 2009, RedSol integrated 69 affiliated institutions (microfinance, economic and social organizations) and 143 points of sale.
Sophistication of the administration and operation processes
Adjustments were done to facilitate the involvement of local organizations in the following processes: insurance applications, premiums payments and transfers. Additionally, RedSol had to institutionalize new processes related to receiving premium payments, sending payments to the insurance company and registering movement in accounting and administration. The Tamazolin, an information system for microinsurance administration, directly accessible online, was designed to handle these processes.
Strengthening of the training activities
The one-on-one sale methodology of the life microinsurance product meant that RedSol had to train rural organizations promoters. RedSol designed conducted a training workshop on the risks, microinsurance operation and sales topic.
Design of a financial education strategy
Since the resistance to insurance of the target population concerned RedSol, it began to work formally on financial education. AMUCSS took the decision to design a global strategy that integrated key matters such as future provision, project budgets, saving, credit and protection, while respecting the diversity of rural organizations’ profiles.
As of July 2010
Expansion of RedSol’s network: integration of new organizations
From January to July 2010, RedSol kept looking for new members and integrated 8 new rural institutions and 11 points of sales resulting a total of 77 affiliated institutions and 155 points of sell.
Multiplication of training activities
The 30 staff members of the 8 new affiliated organizations were trained. In addition, 5 regional workshops on marketing were given to 94 employees.
Design of new products
New life insurance products were developed: credit life insurance for the microfinance and economic institutions and remittance insurance. RedSol also created a repatriation certificate. The design process for each product was different. The credit life insurance characteristics were defined between AMUCSS and an important farmer organization that, as many others, was asking for this product. They were submitted to Zurich, which offered a good price and the settlement was concluded. AMUCSS had a previous failed experience with a remittance insurance and a repatriation certificate, therefore RedSol already had a specific idea of which type of products were required. The former fellow of RedSol designed the products and RedSol invited various insurers to bid for proposals. Three insurers answered the proposal and only Zurich followed up in the process. As for the agriculture insurance, RedSol decided to hire an agricultural economist to design an Agriculture Insurance Fund. For his work, he benefited from the free AGROASEMEX assistance.
Design of a specific insurance education material
As part of the financial education strategy defined at the end of 2009, RedSol, in collaboration with AMUCSS, designed a specific manual on risk administration and future protection.
Mexican National Insurance Institution, which develop and deals with rural risks solutions.
As of December 2010
Second meeting of operators of the microinsurance distribution network
The activities of this event are used to build the loyalty of the distribution agents. This event presents an opportunity to generate an identity with both institutions and participants. The set of activities allow sharing experiences among different operators. One of the lessons that emerges from this interaction is the value of the agents in terms of their knowledge about the reality of final customers, and their work as disseminators of the benefits of microinsurance.
Classification of institutions according to level of services needed (see lessons)
The participants identified a need to create a methodology that allows for the differentiation in the level of services provided depending on the needs of each partner organization.
The challenges faced in the prospecting of organizations showed the need to have a more structured strategy to be implemented with different organizations, so that resources could be better used in a more efficient way.
Launch of remittance and repatriation products with the corresponding training to partner institutions
The design and negotiation of these products took longer than expected due to the insurance regulation. There were no clear answers from insurers showing an interest in working these products which extended the product design phase.
Training of promoters and financial education workshops
19 Workshops with nine different intermediaries were conducted. Of these workshops, three were conducted with the promoters and 16 were conducted directly with members of organizations
Workshops have been designed so that partners can be better served by RedSol in a more efficient way. This is why the workshops were consolidated and fewer workshops were organized than initially planned.
Financial education brochures were printed with topics on issues such as: savings, credit, microinsurance, budget and remittances
Awareness was brought to organizations in order to promote the payment of claims through savings accounts, with the aim of achieving higher levels of banking the recipients
As of June 2011
Development of different levels of services for the differentiated organizations
This strategy builds on the analysis of institutions and is intended to be implemented throughout 2011. AMUCSS will support the classified organizations depending on the specific needs of the organisations and the potential penetration and customer service that the organization can provide.
Launch of the Agricultural Insurance Fund
After having accomplished the works of fund design and legal registration (more in the lessons and related documents), a ceremony was held in April 2011 to establish the agricultural fund with the participation of farmers in the Mexican States of Chiapas, Veracruz and Puebla.
Follow up with partner organizations (particularly MFIs) on the sale of the remittance and repatriation insurance.
Training and monitoring will be carried out in the marketing of remittance and repatriation certificate products given that there have been no sales yet. A different approach will be discussed with these two products.
Collaboration with the Migrant Institute of Oaxaca to develop the distribution of group microinsurance for migrants from this Mexican state to the US
RedSol is in search of new distribution channels for migrant products. A strategy is being developed to promote the group microinsurance products at the clubs of migrants in California.
Implementation of the study on health services and practices in rural communities
The health study has been the first component of the exploration work for the development of a health product to be distributed through the RedSol. In this case the activities have focused on identifying the existence and utilization of health services, in order to design an insurance product that can be complementary to the current supply of health services, taking into account the perceptions of final users and their current health practices.
Date of last Learning Journey update: October 2011