Skip to main content

La Positiva Seguros y Reaseguros S.A.

About the Project
Project Name: 
Designing and marketing microinsurance products for farmers and their families through rural water associations
Type of Facility Project: 
Innovation Grant
País de operaciones: 
Peru
Region: 
Latin America and the Caribbean
Project Thematic Focus: 
Insitutional models and business processes
Product: 
Life - term life
Type of Risk Carrier: 
regulated insurance company
Type of Distribution Channel: 
Utility company
Project Description: 

In partnership with the rural water associations, La Positiva plans to analyze farmers´ needs for risk coverage, sensitize distributors and consumers about the importance of insurance, and take advantage of the irrigation delivery system to distribute the products – premium payments will be bundled with water bills. Thanks to a technology component (partnership with Brightstar to support communication exchange and data management between the local associations and the insurer), the billing system will progressively become more automated, and should contribute to develop outreach, reduce premium costs and improve efficiency.

The originality of this project is to be found in the association between a commercial insurer and a grassroots organization that has a close access to the farmers, works on a daily basis with rural communities, knows their needs and advocates for farmers rights. The Facility is keen to support the innovative distribution system via the water associations as an alternative to the more common practise of linking microinsurance to another financial product.

The consortium has some interesting ideas in terms of market education. They plan to use visual material such as video, board games and posters in local languages (Aymara and Quechua) to ensure a better understanding and ownership of microinsurance. I the project succeeds, the new products could reach very significant numbers of low-income workers and the model could positively influence the industry.

Click here to view the Product Description of La Positiva.

Consortium Members: 
  • Junta Nacional de Usuarios de los Distritos de Riego del Perú: created in 1969, this national organization grouping 112 local associations disseminated in all provinces, manage - on a not-for-profit basis and under the supervision of the Ministry of Agriculture - the distribution of the irrigation water in Peru. With 1.6 million members, the Junta represents the farming communities and as such is a key actor in rural development.
  • Brightstar Peru SRL, an IT company, created in 1997, specialises in wireless technology.
Beneficiaries: 

In this project, La Positiva is targeting farmers, rural workers and their families. Through the water associations, it expects to serve 1.6 million households. Most of the association members do not use banks or MFIs, and therefore the collaboration with these grassroots organizations trusted by local communities enables the insurer to reach a market that it otherwise would not be able to serve.

Lessons from the Project
Learning Agenda: 
  • What are the main risks farmers face and how do they manage them? What are the socio economic characteristics of farmers, field workers, and their families?
  • How can insurers overcome limited infrastructure in rural areas, including communications, health care, and funeral services?
  • Are there any socio economic or behavioral changes once there is access to microinsurance? To what extent do farmers benefit from microinsurance to protect and build their assets?
  • What are farmers, field workers and their families perception on microinsurance? To what extent and how can consumer education change the perception?
  • Is the distribution channel efficient? Could it be replicated in other countries?
  • What technology is best for sales and management of microinsurance in rural areas?
Emerging Lessons: 
  • A product design adapted to the needs of customers is important, but may become overly complex and incomprehensible to customers.
  • The product that emerged tried to fulfil multiple expectations and proved to be rather good but too complex to explain and be understood.
  • Monthly premium payments did not prove to be beneficial because the farmer does not naturally go to the users board every month.
  • Factors, such as the insurability of the channel’s participants, the channel’s operational processes, and the dynamics of contact with end-customers, need to be analysed in depth before making assumptions about critical mass or impact of a distribution channel.
  • A channel’s capacity to integrate insurance operations varies. Not all channels can be easily adapted to the sale and distribution of microinsurance.
  • The frequency and mode of contact (economic transactions) with the channel is an important factor to consider when designing the product.
  • It is important to design an appropriate commission scheme for the channel and the main players involved in the process.
  • It is necessary to strengthen the channel when marketing of services is not part of the selected channel’s nature. It is necessary to understand the channel’s role as the customer contact and intermediary.
  • The different roles of the National Board and the users boards should be considered while designing the project to avoid future confusion.
  • The timing and choice of education and training methodologies should factor people’s economic cycles as well as their capacity to conduct financial operations.
  • The design of financial education activities (such as length and location of training) can have an effect on the success of these activities.
  • General financial education is the responsibility of various players, to be drawn both from the private sector (e.g. insurers’ organizations) and the public sector (e.g. insurance regulators) with the common objective of generating an insurance culture.
  • Local leaders such as mayors, regional authorities and other persons with standing and credibility in each locality could disseminate microinsurance.
  • The amount of time required, on the part of both the channel and customers, is often underestimated when planning an education, dissemination and sales campaign.
  • The technology and related process used by the channel is an important consideration in the design of an IT system.
  • Defining appropriate selection criteria for the pilot areas will make it possible to obtain the results needed to adjust the product for an effective implementation.
  • Implementing pilot projects is a delicate process of adjustment and product fine-tuning, and it is important to obtain a level of success before scaling activities.
Learning Journey: 
Learn more about the lessons that La Positiva is learning in this project.
About the Organization
Tipo de vínculo con el Fondo: 
Innovation grantee
Country of Head Office: 
Peru
Region : 
Latin America and the Caribbean
Type of institution : 
Insurance industry
Participation in Microinsurance: 
Risk carrier
Organizational Overview: 

La Positiva, a general insurance company, founded 69 years ago, is one of the most prominent insurers in Peru with 2 millions clients and brokers covering most of the country. It is active in the provision of health, asset and accident insurance. La Positiva has a solid experience in and commitment to microinsurance - its first products were offered in 1988.

More about the Organization
Websites: 
La Positiva Seguros
Quotes: 

"If you consider that 64% of the poor in Peru are located in rural areas, you can say that the project is quite ambitious as it aims to bring for the first time and on a massive scale microinsurance to farmers and their families and dramatically improve their livelihoods."

Gustavo Cerdeña, CEO, La Positiva

"The water associations are the key to success for microinsurance to reach the rural population which has been totally un-served by insurers even though 23% of Peru´s workforce is active in agricultural activities."
Auri Carrasco, Microinsurance manager, La Positiva

"The microinsurance project brings good news to all farmers´ families and rural workers as they no longer have to sell their livestock or borrow from their relatives to be able to prepare the final arrangements for their cherished deceased."
Ing. Enrique Málaga Málaga, President of the national water association from Peru

"We have been in need of microinsurance for a long time to feel protected from disease and death of one of our family members."
Farmer from Arequipa region