Beyond Business As Usual Insurance Regulatory Authority Breakfast meeting / Kampala Serena Hotel / 23rd Feb 2017 Rethinking Insurance Beyond Business As Usual Mustapha B Mugisa, CFE, MBA www.summitcl.com Forensic. Advisory. Fraud.

What are the top most pressing issues for the insurance sector? #1 Insurance: protection against a possible eventuality

Grow Gross Written Premiums Issue 1: Revenue Grow Gross Written Premiums Forensic. Advisory. Fraud

1.1 Current insurance sales model Brokers Agents For the last 50 years, insurance has been here. Why is penetration still less than 1%??? Challenge: Confusion to the client Underpricing Red ocean High cost of doing business Direct sales Forensic. Advisory. Fraud

1.2 Rethinking insurance sales Agents Brokers – clear structure & minimum targets Agents Clear communication across board at industry level. New brokers are licensed based on fresh expertise in specific sectors / geography Minimum targets set for each per year to optimize ‘allocated sector’ and then can roll over to other i.e. 40% revenue must come from primary sector and rest Brokers Direct sales focus on retention, direct enquiries and operations Forensic. Advisory. Fraud

1.2 Rethinking insurance sales Sectors Transport & logistics Construction Manufacturing SMEs Banc assurance Others (Schools, Saccos, Oil, NGOs etc) Broker 1 √ Broker 2 Broker 3, etc Agent 1 Agent 2 Each broker has a primary sector, they must generate minimum 40% of total GWPs Regulator reserves right to open sector to another, if targets not attained Pressure for players to deliver in a healthy manner Create expertise at broker / agency level to depeen penetration Brokers must generate minimum of 40% from the primary sector, and the rest from “Other” sectors. And the BDM must be a sector champion / champions with a lot of insights in that sector. This is to enable deep market coverage and penetration. Keep changing sector…

Issue 2: Claims Item Ugx’m % Insurance premium revenue 90 75.0% Insurance premium ceded to reinsurers (10) 0.84% Net insurance premium revenue 80 0.66% Fees income (investment, gains, etc) 40 33.0% Net income 120 100% Insurance benefits paid + claims (fraud investign costs) (52.8) 44% Expenses of acquisition (broker & agency fees /commissions) (24) 20% Operations costs (etc… goes up to 40%???) Etc (40%) Forensic. Advisory. Fraud

2.1 Fixing claims: Big data Pattern based, Predictive Analysis Gov’t Data Public Source Data Private Sector Data Industry Data Warehouse Reports. Images Alerts Files Linkages Photos Input Output Data aggregation and cleaning. New policy applicant profile

2.1 Fixing claims: Big data.. Source Mapping Social Media Analysis Personal Crawler For customer sensor, we put Agent in the vehicle, computers, etc to manage risks Virtual HUMINT Customer Sensors Crawler

Issue 3: Value Chain Brokers/ Agents Operational excellency, customer engagement & risk reduction

What changes in competencies are needed? #2 Insurance: protection against a possible eventuality

2.1 Changes in Competencies Embrace big data – for predictive risk profiling Anonymous whistleblowing to manage risks of fraud Beyond persistence – offer enterprise risk solutions to clients Clear communication across board at industry level. New brokers are licensed based on fresh expertise in specific sectors / geography Minimum targets set for each per year to optimize ‘allocated sector’ and then can roll over to other i.e. 50% revenue must come from primary sector and rest Forensic. Advisory. Fraud

2.2. Proactive Risk Mgt Forensic. Advisory. Fraud

2.2. Proactive claims mgt Forensic. Advisory. Fraud

Focus on efficiency “People want simple insurance products. They just want a payment. E.g. In Pakistan, when a person makes a claim before 11:00am. The person has money before 3pm.”

Our values for your success! We take pride in doing the right thing, rather than what is right for the profitability of SCL. Thank you! Summit Consulting www.summitcl.com premium@summitcl.com