On financial education and marketing

Emerging Project Lessons

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 process for the sale of microinsurance began with awareness-building workshops, which discussed how farmers could identify and deal with risks, and presented how microinsurance functioned. Lastly, the workshops explained the features of Agropositiva Vida. It was hoped that farmers would buy insurance at the end of the workshop. Some reasons farmers did not acquire Agropositiva Vida were: training sessions did not coincide with the period of farmers’ greatest income; or farmers did not have cash or their identity card with them.

The design of financial education activities (such as length and location of training) can have an effect on the success of these activities. Different activities were organized such as training workshops and informational talks using audiovisual material (micro radio program, video reports, leaflets, flipcharts) that were intended for board directors, sales agents and farmers. In general, attendance at the talks about micro life insurance was minimal and the reasons for this may be: 1. the duration of initial training sessions was very long (four hours). The sessions were reduced to one to two hours, because farmers require clear, concise information; 2. Since the informational talks were coordinated with other events organized by the board, farmers were detracted from the relevance of the topic of risk management (microinsurance); and 3. there was no clarity about the level of comprehension of microinsurance on the part of farmers. It was also not possible to measure the impact of the radio ad.

Steps were taken to improve the format of the meetings with farmers. For example, in Ica, the talks were organized in a decentralized fashion, that is, not at the board premises, but in a place closer to the farmer; in one case this was the home of a director, at another occasion, in a public square. In both cases, the attendance was better than at previous events and affiliation was nearly 100% of those attending.

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. First, La Positiva contacted the Superintendencia de Banca y Seguros (SBS) [Bank and Securities Supervisory Authority], which had a convention with the Ministry of Agriculture to conduct a financial education campaign. It was proposed to launch the pilot project in areas where La Positiva had been offering micro life insurance, as well as agricultural insurance and index insurance against interruption of business due to the “El Niño” phenomenon. However, the SBS indicated that it was not possible to form an alliance with private businesses to create an insurance culture due to a conflict of interests. The state programme AGRORURAL, when it learned about the activities being developed, proposed to work together to generate an insurance culture and sell microinsurance in rural areas in the Sierra region of Peru. AGRORURAL has been active in financial education in order to promote inclusion of rural residents in the financial system.

Local leaders such as mayors, regional authorities and other persons with standing and credibility in each locality could disseminate microinsurance. In general, intangible products are scarce or non-existent in rural areas, making it absolutely necessary to be very familiar with customers in order to approach them with a suitable marketing strategy. What characterizes farm customers is that they grant importance to what local leaders say. Local leaders who could serve as spokespersons for microinsurance need yet to be identified.

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. Neither the channel nor customers have the time and resources to attend training events that are not linked to their own tasks.  It is thus important to make maximum use of their time by integrating dissemination, training and sales into the same event. It remains evident that the tools for organizing integrated events and communicating messages will need to be clearly formulated in the business strategy that is being developed. This strategy will contain all the instruments, methodologies, messages and means that will be used to carry out dissemination, training and sales.

In order to ensure the sustainability of the undertaking, the commercial strategy will propose tools, materials and means that can be viably implemented once subsidies have run out. La Positiva will negotiate with the national board to introduce the subject of risk management in the training agenda that the national board maintains with all its affiliated users boards.