Ghana Protection Plan

 GHS 1,000 (USD$ 175) for bereavement costs, in rural Ghana this is a significant sum of money, and beyond the reach of a lot of families.

Ghanaians with the (new) National Identification Card would be required to activate their Ghana Protection Plan (Free Basic Insurance of GHS 1,000) via USSD/SMS after acquiring their ID Card.

A retail scheme for higher covers would then be marketed vigorously to members of this group (Approximately 30 million members). A fulfilment solution: USSD; SMS; Mobile Money Wallets/Merchants; Online; etc. would be deployed to make it easier to buy additional cover. 

Bereavement costs are consequential, and a drain on the resources of Ghanaians. Establishing an Affinity Scheme of 30 million members (population of Ghana) means insurance premiums can be significantly reduced. Eg: GHS 1,000 Life Insurance would be GHS 0.50 pppa (per person per annum). This would normally cost GHS 72.00 from an insurance company.

• Insurance penetration in Ghana is lower than 2%.
• Bereavement costs are consequential, and a drain on the resources of bereaved Ghanaians. 
• Insurance premiums are relatively high, and micro insurance covers are either low or subjectively inadequate.
• Life insurance is still sold via manual application forms through agents (Thus; face to face contact with people).

We propose the provision of a FREE cover of GHS 1,000 to every Ghanaian. This would be embedded on the National ID Card (biometric registration exercise ongoing now).

Higher cover - from GHS 5,000 to GHS 70,000 (rated based on the large membership) would then be retailed - using familiar medium/tools, thus; USSD, SMS, Mobile Money Wallets/Merchants, Bank branches, Online, etc.

Policyholders may purchase additional cover for close relations at the same group rates.

An Education Plan, GHS 25,000 for school fees of a named beneficiary would be sold to members of the group (there's no safety net for school children who lose a parent (or both parents) at any point in their education. GHS 25,000 is enough to see a child through school up to and through tertiary education.  This Cover will be sold for GHS 5 (less than USD$ 1) per month. 

The government of Ghana, through the National Identification Authority (NIA), and collaborating with a private sector partner, Margins ID Group, has embarked on a nationwide biometric registration of all citizens of Ghana (foreigners are also required to register for a separate card).

Our proposition is to embed GHS 1,000 Life Insurance cover (Bereavement Costs) on each card. Insurance cover on Card would need to be activated.

This Insurance programme will benefit approximately 30 million Ghanaians, and it's expected to be provided FREE to everybody. 

We have a signed MOU with Margins ID Group, to provide this programme to all registered Ghanaians.

It's expected that marketing it would also encourage people to go out to register for the ID cards. So far about 13 million cards have been issued.

GHS 1,000 is a significant amount of money in Ghana (about 2 months wages for most people), and a lot of families go into debt when they are bereaved. This Insurance payout will help alleviate this problem.

The claims process will be simplified: When a death is recorded on the Deaths Register, the named beneficiary is automatically credited with GHS 1,000. Payment will be made to their Mobile Money Wallet or Ghana Card.

The informal sector in Ghana is largely "unknown" and not catered for in intervention programmes.

The provision of a Protection Plan (Free GHS 1,000 Life Insurance to every Ghanaian) will cater for both the informal sector and the formal sector. 

The use of USSD, SMS, Mobile Money Wallets/Merchants to fulfill policies will not depend on internet coverage (currently not available across the country).

Our compulsory National Pension Scheme counts only 1,436,000 contributors - all of whom are formal sector workers.

The formation of an Affinity Insurance Group will bring premiums down to reasonably affordable rates. And the provision of retail welfare insurance plans will provide a safety net.

Insurance penetration is less than 2%. Our solution seeks to increase this severalfold, by providing every Ghanaian with Life Insurance cover. The retail of various hybrid insurance plans to the affinity group of approximately 30 million people would make it unprecedented in the history of the sub-region.

Our solution has no competitors - since the risk will be distributed equally amongst all the Life Insurance Companies in Ghana (44 companies). There'll be no need for them to compete. The more additional cover we sell, the more premium income they get to share equally amongst themselves.

The following retail plans will be provided for retail to members of this affinity group: 

• Welfare Insurance Plan
• Education Plan
• In-Country Travel Insurance Plan (also distributed to Students who travel to get to school through a StudentCard Programme; and as an add-on to public transport tickets)
• Emergency Medical Evacuation & Hospital Treatment Plan 
• International Cancer Treatment Plan 
• International Medical Check-Up Plan 
• Burial Cover

Insurance companies continue to work solo, and target large corporate groups, or use their connections to Government to sell group cover for various schemes that are usually overpriced, and fraught with political machinations. These are frequently scuppered with a change of political government, or from worker agitation. Our programme will be provided to all 30 million Ghanaians, and seeks to boost significantly the premium income of all insurance companies in Ghana - starting with Life Insurance companies.

Affinity Insurance Schemes/Programmes are unheard of in the West African Sub-region.

Affinity Insurance Programmes are however the norm elsewhere. We are adapting this business model for our environment. Members of the Police Union in the UK, pay £50 pppa for Travel Insurance that would normally cost over £200 pppa.

We have chosen to provide a FREE Life Insurance cover as the "social" element of this programme - because we believe that it's what would be most useful to the majority of the less affluent. It'll also afford more affluent people the opportunity to buy insurance cover at Affinity Rates.

Process Flow:

• Register for the National ID Card.
• Activate the FREE insurance cover of GHS 1,000 with your mobile phone (or at any of about 1 million Mobile Money Agents dotted in every corner of the country. 
• Nominate a Named Beneficiary. 
• Choose to buy higher cover for yourself and close relations and pay with your Mobile Money Wallet (over 19 million mobile money wallets in Ghana). Premiums may be paid in monthly instalments.
• Choose to buy other Insurance plans by dialing a Short Code on your phone, or again at a Mobile Money Agent.

• GHS 1,000 credited to the ID Card of the named beneficiary automatically - no need to make a claim. 
• Ghana ID Card has ATM capabilities for withdrawals.
• Cash can be transferred to a Mobile Money Wallet, and cashed-out from any of over a million Mobile Money Agents across Ghana.

• An Affinity Insurance group of approximately 30 Million Ghanaians = lower premiums.
• A free insurance cover for every Ghanaian = a social protection programme for all informal sector workers, and poor households/families in Ghana.
• 30+ million life insurance policies in Ghana + a robust retail insurance programme = significant insurance premium income for insurance companies = higher insurance penetration in Ghana.
• Fulfilling insurance sales over mobile phone and at about 1 million merchant outlets = increased insurance penetration, and the harnessing of technology for insurance delivery.
• Claims Process linked to the National Identification Database (Death Register) = immediate (and revolutionary) payment of insurance claims when a death is recorded.

Our private sector partner in this programme, Margins ID Group, has established and will manage the Ghana National ID database. This database is expected to be monetised to pay for itself in a few years.

Our solution seeks to provide a social protection safety net to not just informal sector workers, but to all Ghanaians as a whole. And then a follow-on retail scheme will seek to provide retail insurance plans with significantly lower premiums, due to the size of affinity group (30 million Ghanaians). A similar programme in Nigeria would have 200 million members, and around 500 million members for the whole West African Sub-region.

Our solution seeks to integrate insurance (that takes care of the welfare of members) with the National ID database system, and Mobile Money wallets for premium payments and claims payments.

Informal sector workers (a significant portion of working adults in West Africa, and Ghana specifically) do not have monthly wages, from which insurance premiums can be deducted. And retail insurance plans are too expensive if purchased as an individual. Been part of this large affinity group will make the premiums affordable. And monthly deductions are allowed.

Additional cover and other plans may also be purchased for close relations and dependants, at the same affinity rates.

• Mobile Phone penetration in Ghana is estimated to be 140%.

• Estimated number of people with Mobile Money Wallets in Ghana is 19 million.

• 30 million National ID cards are expected to be issued at the end of the registration exercise by our private sector partner - Margins ID group.

• Over 1 million Mobile Money Agents (merchants) spread all over the country.

Incorporating all these into one seamless solution, the provision of the Ghana Protection Plan (Free to all Ghanaians) would be the most comprehensive social protection programme to have ever been conceived in Ghana, or in the sub-region.

Our solution is designed to be as simple as possible:

USSD, SMS, WhatsApp, and Payment Aggregator's APIs. would be integrated with the National Identification Database managed by our partner, Margins ID Group.

OIS InsurTech will provide a retail insurance fulfilment platform that will incorporate all these existing technologies.

Smart phone users would also be able to seamlessly purchase insurance plans (as group members) from either an App, or from within their Mobile Money Wallets, whilst analogue phone users would be able to do same by text Message, or by dialling a short code.

• The majority of mobile phones in Ghana are still analogue phones ("Yam" Phones, or Cricket Phones), and users would be able to make purchases through text messaging, or by dialing a short code.

• The over 1 million Mobile Money Agents/Merchants around the country would provide agency services in assisting people to buy insurance, or service their insurance policies.

From start we expect to serve approximately 30 million Ghanaians - the entire population.
(plus the around 5 million ECOWAS citizens estimated to be resident in Ghana - Note that the Identification Project is actually the ECOWAS Card - and seeks to integrate all citizens of ECOWAS on one database).

Upon a successful launch in Ghana, we'd seek to replicate this in Nigeria (we have held talks with a couple of insurance companies, and a reinsurance company in Nigeria), and the English-speaking countries of West Africa to start with.

Ghana:

• 30 Million people on the Ghana Protection Plan.
• Significant premium income from the retail programme, if we can get 5 million people to purchase additional cover

ECOWAS:

• Seek to get buy-in from the ECOWAS organization, to roll this out all over the sub-region. The ECOWAS Card is the baby of the ECOWAS organization.

Nigeria:

• Target a Nigeria Protection Plan, or simply go for a Retail Programme.

• Initial Premium outlay for GHS 1,000 for each Ghanaian = GHS 15,000,000 (USD$ 2.6M) - (this won't need to be paid upfront, since not every card holder will activate their cover at once). We expect to start earning commission from the Retail Programme immediately, and should be able to cover these as time goes on.

• Politics: Our private sector partner Margins ID Group was expected to be in charge of the biometric registration exercise, but through political machinations this bit of the project was de-coupled from their contract. This has resulted in a painfully slow, and acrimonious registration exercise (the main opposition party having a field day with hiccups in the registration exercise). 

• Nigeria (or ECOWAS): Business in Nigeria is a difficult process, with Nigeria is a difficult business terrain for non-Nigerians. It would not surprise us if Nigeria does not happen. However the other Anglophone West African countries look up to Ghana's Insurance industry for leadership, and so it'll be a natural extension to extend into those markets.

Initial Premium outlay for GHS 1,000 for each Ghanaian = GHS 15,000,000. We approached the government to fund this as a social insurance programme, but we were turned down. So we intend to fund it through the following ways:

• Partnership with Telcos: To recoup some costs from SMS and USSD charges.
• Partnership with local banks: Credit line to make premium payments to insurance companies on time, if the premiums from the retail programme can not cover the initial premiums.

Politics: We have decided to go ahead with our plans with Margins ID Group, and offer the Ghana Protection Plan to the 13 million Ghanaians already issued with cards. The others can activate their free cover as and when they are issued with cards. We expect that the launch of our programme would rally both sides of the political divide to support the whole ID registration exercise. 

Nigeria: We'd need to ensure we have a strong partnership with a Re-Insurance partner in Nigeria, before we go into that market.

This is a partnership between:

• OIS InsurTech Limited  -  InsurTech partner and insurance intermediary.
• Allstar Insurance Brokers Limited  -  Insurance broker (representing a syndicate of 44+ Life Insurance Companies in Ghana).
• Margins ID Group - Private sector manager of the National Identification Database.

OIS InsurTech: 4

Allstar Insurance Brokers: 8

Margins ID Group: To be Determined

Members of the team are seasoned insurance professionals with several years of industry experience.

This has been several years of targeted work trying to merge insurance product design with fulfilment, and significant welfare benefits.

The market has been predictably focussed on selling insurance products the traditional way. We have pooled together our experience spanning various markets on varied continents, culminating in this solution where we are pushing a medley of social insurance and welfare insurance, mush above the level of a micro insurance scheme. But with premiums in the range of micro insurance.

• OIS InsurTech Limited  -  InsurTech partner and insurance intermediary.
• Allstar Insurance Brokers Limited  -  Insurance broker (representing a syndicate of 44+ Life Insurance Companies in Ghana).
• Margins ID Group - Private sector manager of the National Identification Database.
• Ghana Re - Reinsurance company.
• NIC (National Insurance Commission) - Insurance industry regulator for Ghana. 
• All Seasons Underwriting Agencies (UK) Ltd (ASUA) - Underwriter and Coverholder at Lloyds of London.
• Strategic Insurance Services (UK) Ltd - Underwriter and Coverholder at Lloyds of London.

A retail Welfare Insurance Programme targeting 30 million Ghanaians as a large Insurance Membership Group, by first providing a basic NAC (No additional Cost (FREE) Life Insurance Cover to each member of the Group. Followed by a retail insurance programme targeting members of the group, with reasonably low premiums based on the large membership of the group.

This will also provide commission income (social enterprise) for Mobile Money Merchants who sell retail plans to policyholders (anyone who activates their Basic Plan is a policyholder, and qualifies to buy additional cover, or other plans for him/herself and close relations).

We plan to raise the initial capital required for systems infrastructure, and initial premium outlay, through grants, investment capital, and loans.We'll require between $500,000 and $1 Million for this.

We expect to immediately start recouping  from commission and margins built-into the retail plans, and to be able to be financially sustainable before the end of year one.

Alongside the retail programme, we plan to launch an Insurance Education Programme (we have approached GiZ about a collaboration (GiZ is already involved in insurance education in the micro insurance space in Ghana), and they are keen to work with us on this project.

We have not raised funds yet, but we have held exploratory talks with a few organisations we plan to collaborate with:

• GiZ (German Agency for International Cooperation) - Insurance Education
• Telcos - Fees and Charges, Mobile Money integration and  aggregation fees structuring (profit/commission share)
• Local Banks - premium collection and cash handling partnerships in return for a credit line.

YEAR 1:

• Initial Premium outlay on GHS 1,000 x 30 million policies: $2,600,000
• Premium Income for additional cover sold to an estimated 2 million Ghanaians: GHS 60 x 2 million = GHS 120 million = USD $ 20.8 Million
• 20% margin on an estimated $20.8 million premium income = $4,160,000
• We can make extra revenue by adding additional margins for systems, marketing, and premium collection costs.

Systems & Solutions: $100,000                       -   Debt

Education & Marketing Programme: $100,000    -    Grant & Debt

Initial Premium Outlay: $500,000                      -   Credit Line/Debt

We hope to raise these funds before the launch of the pilot for the 13 million Ghanaians with ID cards. The inadequacy of funds doesn't prevent us from proceeding and bringing the project to life. 

• CAPEX (Capital Expenditure)
  • Systems & Solutions: $100,000

• WORKING CAPITAL
  • Education & Marketing Programme: $100,000
  • Initial Premium Outlay: $500,000

NB: Operating and other expenses shall be borne by the Company.  

Initial Premium Outlay: 
Willing the Mission Billion Challenge would do two things for us:

1. Provide the means (prize money) for us to cushion our initial outlay (interest rates from banks in Ghana are around 25% p.a, i.e if we do get the credit line from the banks)
2. The platform we need to pitch for partnerships and assistance from the World Bank, and the international donor community.

• We'll require support with the funding, design and build of a retail insurance platform, which will integrate with existing structures managed by Margins ID Group.

• We'll require assistance with resources for our planned Insurance Education Programme, alongside a marketing campaign to get people to activate the insurance on their cards, and also market additional retail plans to them.

• Most crucial for us would be the credit line to provide for the initial premium outlay for the Free basic Cover - the Ghana Protection Plan. which would be paying the premiums of GHS 0.50 for 30 million Ghanaians.

• GiZ  - Insurance education: Grant
• World Bank - Initial Premium Outlay and Systems costs : Grant