In 2009, Allianz Life Indonesia and Allianz Utama Indonesia (Allianz Indonesia) sold a combined total of 347,000 microinsurance policies. Joint premium income increased from IDR 1.1 to IDR 9.5 billion. Allianz plans to further expand its microinsurance business through more distribution partnerships and more products.
“Our microinsurance is growing so fast because it satisfies a clear demand from low-income families for insurance protection. The premium volume may still be small, but the large customer numbers are already impressive. We only started microinsurance in 2006, but today already 19% of all our insured come from microinsurance,” said Jens Reisch, President Director of Allianz Life Indonesia.
“Microinsurance offers a double bottom line of social and economic benefit for us,” said Jens Reisch. “Microinsurance enables us to introduce insurance to a wider scale of people, especially to low-income people who previously had no access to insurance but who are at the same time the most vulnerable. With the Indonesian economy steadily growing, many of our microinsurance customers will advance economically in the coming years. As we serve them today, we hope to win these customers’ loyalty and grow together with them,” he added.
Allianz Indonesia microinsurance premiums in Indonesia has more than sextupled on average over the last three years. It is the fastest growing business activity of Allianz.
Strong partnerships with commercial banks and MFIs
For microinsurance distribution, Allianz Indonesia currently partners with 3 commercial banks and 20 Microfinance Institutions (MFIs) such as rural banks and credit cooperatives.
“We can reach this market most effectively if we work together with partners who are already experienced in this segment,” said Handojo Kusuma, Director of Allianz Life Indonesia. He added: “We have increased our distribution partners to 23 since we started in 2006 with only one partner . In the coming years, we will grow our partner network further. We will also explore alternative distribution channels, such as NGOs and mobile technology.”
New project: Micro-education insurance
Allianz already offers a number of different microinsurance products such as enhanced credit life insurance and personal accident insurance. In 2008, Allianz Life Indonesia introduced micro-takaful products. In 2009, Allianz Utama Indonesia launched its first non-life microinsurance product that protects small entrepreneurs against business interruption.
In the second half of 2010, Allianz plans to launch a micro-education insurance. It will provide low-income families with the opportunity to save for their childrens’ education in small amounts and at the same time benefit from life insurance coverage and additional benefits.
For its micro-education project, Allianz has already won Mitra Masyarakat Sejahtera/Vision Fund as a pilot partner. During the initial pilot phase this local MFI, a subsidiary of World Vision Indonesia, will organize distribution in Jakarta, Surabaya and Pontianak. Furthermore, due to the expected positive social impact of this project, the Ford Foundation has committed to support it with a development grant. Moreover, Allianz has established a research partnership with the Indonesian SMERU research institute and the University of Adelaide to accompany the project with high quality impact research.
“This new micro-education project is part of action plan to further grow microinsurance this year. We also want to increase our distribution partnerships from the current 23 to become 34 partners by the end of the year, and we expect to sell a total of 515.000 policies in 2010,” said Jens Reisch.