Emerging Insight: An under-rated distribution opportunity
21 June 2016
With 1.5 billion people worldwide getting access to financial services through a post office, postal networks are a promising distribution channel for insurers. One particularly successful example is the partnership between Wafa Insurance and Poste Maroc in Morocco, which reached 549,000 policies in force by 2013. What were the keys to its success?
The partners carefully tested the product. When Poste Maroc decided to start offering insurance, it begun with a test period from 1999 to 2003. During this time, it partnered with three different insurance companies to test products in just 200 agencies. This was considered a learning phase and allowed Poste Maroc to deepen its understanding of its clients’ needs and of insurance, and to chose the right product and insurer. After the test phase, Poste Maroc and Wafa Insurance created an exclusive partnership.
Poste Maroc was committed to expanding into financial services. Poste Maroc’s long-term commitment and active involvement in the financial services it provided were key to the success of the partnership. This commitment to financial services was also demonstrated in its establishment of a postal bank, Al Barid Bank. The establishment of the bank directly benefitted the insurance programme, as Poste Maroc put in place a series of measures aimed at strengthening its capacity in financial services.
Post Maroc and Wafa Insurance structured their partnership to make the most of their respective strengths. In order to form a successful partnership with a postal network, an insurer needs to think carefully about how it divides functions, leverages the strengths of the postal network and supports areas in which it is weak. In this case, product design and development were carried out with inputs from both parties. Marketing and communication strategies were also developed jointly. Furthermore, although Poste Maroc was solely responsible for sales, the insurance company visited the postal agencies to assist in any difficulty that the sales team might encounter. According to Wafa Assurance, one of the successful factors of the partnership was the constant exchange of inputs between the two parties.
The potential of such partnerships should not be overlooked by insurers, especially as postal networks are increasingly interested in offering financial services. With the volume of mail dropping, the profitability of posts has been adversely affected and financial services are seen as a feasible alternative to diversify sources of income and leverage existing physical and human capital. As a result, the share of postal revenues from financial services has increased from an average of 15 per cent in 2001 to nearly 21 per cent in 2013. To find out more on possible partnership models, success stories, and challenges, see the full paper on “Advancing financial inclusion through access to insurance: the role of postal networks”.
The partners carefully tested the product. When Poste Maroc decided to start offering insurance, it begun with a test period from 1999 to 2003. During this time, it partnered with three different insurance companies to test products in just 200 agencies. This was considered a learning phase and allowed Poste Maroc to deepen its understanding of its clients’ needs and of insurance, and to chose the right product and insurer. After the test phase, Poste Maroc and Wafa Insurance created an exclusive partnership.
Poste Maroc was committed to expanding into financial services. Poste Maroc’s long-term commitment and active involvement in the financial services it provided were key to the success of the partnership. This commitment to financial services was also demonstrated in its establishment of a postal bank, Al Barid Bank. The establishment of the bank directly benefitted the insurance programme, as Poste Maroc put in place a series of measures aimed at strengthening its capacity in financial services.
Post Maroc and Wafa Insurance structured their partnership to make the most of their respective strengths. In order to form a successful partnership with a postal network, an insurer needs to think carefully about how it divides functions, leverages the strengths of the postal network and supports areas in which it is weak. In this case, product design and development were carried out with inputs from both parties. Marketing and communication strategies were also developed jointly. Furthermore, although Poste Maroc was solely responsible for sales, the insurance company visited the postal agencies to assist in any difficulty that the sales team might encounter. According to Wafa Assurance, one of the successful factors of the partnership was the constant exchange of inputs between the two parties.
The potential of such partnerships should not be overlooked by insurers, especially as postal networks are increasingly interested in offering financial services. With the volume of mail dropping, the profitability of posts has been adversely affected and financial services are seen as a feasible alternative to diversify sources of income and leverage existing physical and human capital. As a result, the share of postal revenues from financial services has increased from an average of 15 per cent in 2001 to nearly 21 per cent in 2013. To find out more on possible partnership models, success stories, and challenges, see the full paper on “Advancing financial inclusion through access to insurance: the role of postal networks”.