Insurance for Development — Product development: inclusive health insurance
The Insurance for Development course is a unique learning opportunity for insurance and financial inclusion professionals to study concepts, business models and strategies for inclusive insurance. During September and October 2022, more than 60 participants from across the world joined the ILO’s Impact Insurance Facility and the International Training Centre of the ILO for a series of webinars that accompanied self-paced learning modules. In this blog we share the highlights from the webinar on “Product development: inclusive health insurance” held on 4th October 2022. In this blog, participant Akinyemi Alebiosu writes about the lessons he learned during the webinar.
I had the pleasure of attending the English version of the Insurance for Development course in 2022 and would like to share some of the key takeaways from the webinar on product development for inclusive health insurance. This session focused on the process of developing new inclusive health insurance products and revising existing products. Lisa Morgan (Technical Specialist, ILO’s Impact Insurance Facility), Sicco Van Gelder (Director of Demand-Side Financing, PharmAccess Foundation), Solene Favre (Global Insurance Director, Visionfund International), and Nadia Boughaba (Head of products, operations & data, and Senior partnership manager at AXA Emerging Customers) spoke during the session.
Lisa Morgan, who also moderated the session, set the scene by explaining how to adapt the insurance value chain to health insurance. The ILO’s Impact Insurance Facility’s “health coverage value chain” has 8 stages, as illustrated in Figure 1 below.
The presentation focused on the second stage: product development and pricing (including value-added services). Product development and pricing also has its own cycle, as illustrated in Figure 2 below.
It is important in product design that the outcome is based on actual and recent studies on and with targeted customers i.e., by applying human-centered design, also known as design thinking. This will ensure that there is a strong basis for the proposal, which is based on an understanding of health needs (real and perceived), affordability and current interaction with the existing healthcare system. Design thinking is considered one of the most powerful tools for finding user-friendly solutions: it starts with fully understanding the problem by empathizing and defining it. This is followed by a phase of exploring and creating a solution. The solution is then tested and implemented. The process of design thinking could be repeated as many times as possible until a viable solution is achieved.
Sicco Van Gelder took us through the PharmAccess Journey, PharmAccess has been involved in health financing in Ghana, Kenya, Nigeria and Tanzania since 2007, mostly looking for insurance solutions for low-income groups. PharmAccess has a bespoke process for designing new products. The new product design process brings together a cross-functional team that includes Marketing (those responsible for target group study and package preference), Quality (those in charge of the assessment of health care providers and services), the insurer (responsible for onboarding and claims etc.) and a health actuary (to design and price alternative packages). The final stage is approval which involves ultimate pricing, reimbursement, and setting up of the provider network. In determining appropriate pricing, it’s important to consider the target population’s needs, financial abilities and demographics (age, gender distribution, population growth, incidence rates and price information for healthcare services). For low-income groups and in the experience of PharmAccess, willingness to pay studies do not necessarily give very reliable results. PharmAccess typically assumes 5 per cent of net income as the maximum members are willing to pay.
The webinar also included a presentation by Vision Fund International (VFI). VFI is the microfinance subsidiary of World Vision International, overseeing a network of 28 microfinance institution. VFI has a portfolio of over US$500 million lending to around 1 million clients around the world. VFI reiterated the importance of assessing needs before proceeding to product development. Ghana and Malawi were used as case studies where most respondents ranked illness as the most important risk that they face (54 per cent in Ghana and 90 per cent in Malawi). This led to them designing a unique package for the target population. One of the lessons learned was that inclusive health insurance products covering the entire family were more appealing to the target market.
Nadia Boughaba of AXA’s Emerging Customers unit spoke about the strides AXA is making in the sphere of inclusive insurance. The emerging consumer unit focuses on the mass market and looks to balance the 3 key aspects of affordability, inclusivity and value. Vulnerable customers don’t always have access to inclusive health insurance because there is often no suitable and affordable offer available. Nadia emphasised the shifting burden with non-communicable diseases (NCDs) and chronic illnesses. Sub-Saharan Africa and Southeast Asia appears to be the most burdened with NCDs, infectious diseases and mental health issues. With the statistics showing that mental health issue now affects 1 in 4 individuals, this makes it important to rethink how mental health is approached and the need to include it in healthcare packages. She also emphasised that the fragmented and inefficient healthcare ecosystem has resulted in the need to develop new solutions to cope with higher costs and lesser staff (many professionals migrating to richer countries); Sub-Saharan Africa and Southeast Asia are also the most affected by this phenomenon.
Nadia also mentioned the crucial need for data in writing inclusive health insurance. Understanding each country’s healthcare system, assessing frequency and cost, and the set-up to reduce the risks/costs are crucial elements to be considered in inclusive health insurance product development.
Overall, the session confirmed the need to understand the customer and have an iterative product design process.
