An Unintended Secret: Microinsurance in Morocco
by Allegra Palmer, Associate, Knowledge & Communications
Zahra is unmistakably a businesswoman. She makes bedspreads and sells them in the market in the small Moroccan town of Jorf El Melha, She is 45, married with 7 children: 4 boys and 3 girls. Zahra’s earnings go towards household expenses, like food, school fees and clothes. As with most low-income Moroccans, health expenses weigh heavily on the family’s budget. Unforeseen health expenses, like the operation her husband had to have last year when he was met with a road accident, can destabilize… Without any safety net to help cope with health expenses, Zahra loves the idea of having health insurance. She believes that “it protects not only your health but your future.” If she had insurance she would “feel more comfortable” and that something is helping her face her problems.” Zahra thinks she doesn’t have the money for insurance…but the truth is Zahra has actually been paying for health insurance for over a year!
AlAmana Microfinance is a Women’s World Banking network member in Morocco and has about 300,000 clients. About a year ago, Al Amana introduced a microinsurance product called L’Assistance (“help” in French) which comes with each client’s loan. The AlAmana staff saw insurance as a social initiative to support clients in their time of need. The product provides cash payouts for moments that could cause clients financial stress: childbirth, hospitalization, diagnosis of a critical illness, road accidents and death. There was one problem: very few people currently use the insurance. After being in place for over a year, only a small number of claims have been filed and processed.
Why weren’t clients using the insurance?
With support from Agence Française de Développement, Women’s World Banking went to Morocco in March of this year, meeting with rural and urban clients of the institution to help AlAmana solve this mystery. We conducted in-depth market research to better understand Moroccans’ healthcare needs and assess their clients’ perception, awareness of and satisfaction with L’Assistance .
A clear benefit…
According to AlAmana clients, healthcare is one of their greatest financial burdens. When faced with health costs, clients borrow from friends and family, sell assets and dip into savings. These tactics only serve to increase their long-term financial burden. One client named Aziz, a shepherd, had to sell some of his sheep and cows to cover expenses associated with a stomach ulcer. His doctor told him that he needed an operation but he could not afford it. Instead, he has been self-medicating for the past two years. Aziz regrets not having planned better financially: “I did not have any savings to do the operation. Had I known I needed to do the operation, I would have saved money.”
Had he filed a claim, L’Assistance insurance would have given him a payout to cover most of the cost of the operation. So why did Aziz, and countless other AlAmana clients who have this insurance, not use it?
… that no one knows about
When Women’s World Banking researchers asked clients “What is L’Assistance?” a product all borrowers pay for when they first sign up for the loan, almost everyone said “I don’t know.” Those who did know, only had a vague idea of the insurance benefits or the payout amounts.
When our researchers dug deeper, they found that the lack of awareness could be attributed to AlAmana’s existing communications strategies and materials about the product. For example, a credit officer explains L’Assistance insurance to the client at the time of loan disbursement, a time when the client is most likely focused on the terms of their loan and little else. Furthermore, all the useful benefits of L’Assistance are explained in a long, complicated booklet given to each client along with their loan paperwork. Apart from being lost in the shuffle of important documents, this poses an extra burden on the clients, many of whom can’t read.
In a way L’Assistance is Morocco’s best kept secret. When Women’s World Banking explained the insurance benefits during the focus groups, the clients became excited and eager to use the product, especially when they heard the payout amounts. Khadija, a clothes trader, from a suburb of Rabat even said “Is it true? They give you money? If it’s true, great because I need to go to the hospital.”
Women’s World Banking believes that giving women access to financial products like insurance isn’t enough; they must have clear and simple information to show them how to use it. True financial inclusion isn’t just having a bank account or loan but having the knowledge and the power to use it effectively, something we call financial capability. AlAmana’s L’Assistance insurance product is a case in point: despite having access to a product with incredible benefits, clients didn’t use it and in fact were worse off for it simply because they did not know about it.
Giving L’Assistance a makeover
Women’s World Banking will now work with AlAmana to reorganize and simplify the product’s benefits, while developing an education strategy to increase client’s awareness of each benefit. Based on findings from the research, the marketing strategy will need to reposition and communicate the product in a way that resonates with clients. Most importantly, all the materials will be put in a way that clients will understand. Given the low literacy of their clients, materials require simple wording and strong visuals that explain the benefits and claims process quickly and clearly. Women’s World Banking will also help develop a training program for sales staff to help them clearly explain the product, and at the right time.
The simplified product will be launched in conjunction with a marketing campaign, engaging Al Amana customers through multiple touch points to generate positive word of mouth: posters in bank branches, engaging product brochures, radio advertisements and client testimonials are a few of the marketing channels the team is looking to use. The secret to AlAmana clients’ financial security won’t be a secret for long.
This project benefits from the Agence Française de Développement support. The analysis, views and opinions expressed are those of the author and do not necessarily reflect the position of the Agence Française de Développement.
Women’s World Banking is the global non-profit devoted to giving more low-income women access to the financial tools and resources essential to their security and prosperity. For more than 35 years we have worked with financial institutions to show them the benefit of investing in women as clients, and as leaders. We equip these institutions to meet women’s needs through authoritative market research, leadership training, sustainable financial products and consumer education. Headquartered in New York, Women’s World Banking works with 39 institutions in 28 countries with a reach of 14 million women to create access to finance on a greater scale than ever before.