January 2009
Three agricultural engineers and one administrative assistant were engaged. A contract was signed with the Institute of Peruvian Studies (IEP) for the design and implementation of the baseline. The objectives of the baseline were to:
- Gather information about potential microinsurance customers (farmers registered with the irrigation boards)
- Collect information about the results that potential customers would expect from being able to access insurance
- Propose a monitoring and follow-up plan to capture changes in the situation of potential customers and their microinsurance needs
The agricultural engineers were trained on the following subjects: microinsurance (life insurance, property insurance, health insurance), enrolment, collection of premiums, and claims processing.
Software design and the choice of information technology were not finalized, since more information was needed on the software used by each board and the frequency and mode of payment of the water tariff. La Positiva bought 46 computers and, through a transfer of use agreement, gave them to the JNUDRP. The JNUDRP in turn designated the regional water boards and local water councils who were to receive the computers.
Surveys were carried out among a sample of 1,200 farmers in the three regions of Peru (the coast, the sierra and the jungle) and among 32 water boards and councils.
July 2009
La Positiva found that water boards were using a variety of mechanisms to collect tariffs; some boards did not have software, and those that did used different programmes. In addition, the frequency of billing varied, ranging from daily to annually.
La Positiva began offering the pilot phase of offering the product. Enrolment, premium payment, and claims reporting were carried out manually, using Excel templates that were designed by staff from the technology and information service of La Positiva’s Affinity and Microinsurance unit.
The project’s team of engineers was trained to use the Excel template for registration and collection, to fill out simplified policies, and to transfer information to La Positiva’s database. They were also entrusted with the training of sales agents for each board.
These processes were carried out manually because the sales period did not coincide with the water tariff payment schedule during the pilot phase. Furthermore, in other cases there was no time to adapt the board’s software for processing premium payments.
The water boards selected for the pilot phase were: Medio and Bajo Piura, Rímac, Irchim, and Ica (in the coastal region); Chili Regulado and Mantaro (in the sierra region); and Bagua (in the jungle region). Selection was based on geographical location, number of users, and the water tariff payment system. Although they were selected, the boards in Mantaro, Ica, and Bagua did not participate.
La Positiva proposed a life microinsurance product, Agropositiva Vida, to the water boards and suggestions were taken from directors and farmers. The most useful suggestions concerned extending the maximum age of participation of 70 years old, including medical care, and refunding a proportion of the premium after a defined period of contribution. The life insurance arm of the company, La Positiva Vida, finalized the product designs and registered two products with the Superintendencia de Banca y Seguros (SBS). One product was adapted for farmers of the sierra and jungle regions, and the other for farmers in the coastal region. Each product had different insured amounts, but both were life insurance products covering the whole household (the policy-holder, the spouse or companion, and the children).
January 2010
The decision was made to include the premium in the irrigation water tariff, making it easier to keep clients. Officials at the JNUDRP suggested that the only way to guarantee that the majority of farmers subscribe to the Agropositiva Vida was to make use of the decision-making mechanisms of the boards and allow the Assembly of Directors to decide whether to include the premium payment in the bill for irrigation water.
La Positiva decided to take up the JNUDRP’s suggestion when it came to scaling-up the project after the pilot phase. La Positiva therefore decided to include the premium in the water tariff in the boards whose directors had given their approval.
It was decided to redesign the product, extending the maximum age of participation to 80 years (as requested by many farmers attending training sessions). The technical group of La Positiva Vida Seguros carried out a data analysis of data and determined that it was feasible to extend the age limit without raising premiums. During the scale-up phase, 298 policies were sold, representing 1,192 people, on the basis of four insured people per policy.
July 2010
La Positiva decided to evaluate the assumptions made when creating the project. In particular, it wanted to look into the assumptions that enrolment on mass was viable through the water boards, and that including premium payments in water bills was possible. As part of this, it analyzed the proximity of water boards to the farmers, the marketing capacity of the water boards, and the delinquency experienced in each region.
It therefore began a study to support the development of a comprehensive marketing strategy to be validated in a real sales setting. In this way, La Positiva aimed to produce a marketing strategy that has been validated, adapted, and can be replicated.
Focal groups and in-depth group interviews were planned with farmers, irrigation managers, directors of the regional water boards and the national board, national government employees, who regulate water management and are therefore familiar with the channel, and other specialists.
As a result, it planned to obtain information needed to adjust the product, create an incentive plan for the channel, adjust the operational model, and draw up a promotion and marketing strategy.
The study will also make it possible to reformulate the objectives, benchmarks, and activities of the project, as well as establish a new expenditure flow.
January 2011
A new strategy was set up to implement (a) a new sales plan (b) a tool for the sales plan and (c) monitoring and follow up tool for the implementation.
A new project leader was appointed in December 2010 to work on the manuals for enrolment, channel rating, training of the channel, and reporting according to the new strategy. A new product was introduced to simplify the sales process.
New agreements were signed with the water boards and La Positiva began training the personnel of the water boards and councils. It was important to figure out the best training methodology. In this case the tool used had mixed results; the trainings in the northern department of Piura were more successful than those in Trujillo.
The new incentive plan was introduced and readjusted with further experience. In particular, the incentives for the presidents of the national and regional water boards were removed given their lack of involvement in the project.
July 2011
During this period, La Positiva continued to define its new strategy, including the new product design. It also defined implementation more clearly. Although implementation had already begun, it now articulated the phases of implementation and created a formal action plan for the restructuring.
During the first half of 2011, La Positiva focused on developing the sales channel. A total of 24 water boards and 64 water councils were approached, resulting in 128 affiliated points of sales. By July only 26 of these were active with operating policies.
La Positiva expanded its activities from the coastal regions of Peru into both the highlands and the jungle regions. In these regions other organizations beyond the water boards were approached, such as government institutions (agricultural agencies that collect agricultural information and provide technical assistance to farmers). At the same time brokers, non -financial institutions, and agroindustrial enterprises were approached in order to broaden the distribution base.
Levels of sales remained stable throughout the first part of the year. This was due to the lack of a communication strategy.
July 2013
After some major changes in the implementation team and internal restructuring the project was resumed under a newly-created unit. The old agricultural insurance team was turned into the Rural Insurance Unit, which is intended to be a more commercial unit, able to interact better with other departments to offer a wider set of products. The team strengthened its communication capacity with a new specialized member.
Under the new unit a new sales force structure was introduced, including regional supervisors to work closer with the water boards and councils. The team is working with new supervisors in the following regions:
- Puno
- Ica
- Piura
- Lambayeque
- Ayacucho
New products are being offered through these channels:
- Cancer indemnization
- Hospital cash
- Third party liablity for cars (compulsory product for cars)
La Positiva was also considering a health microinsurance product.
The old structure required central processing in Lima for both marketing materials and processes like enrolment and claims. In order to improve the service to the final clients and for better integration with the rest of the regional offices of La Positiva around Peru, La Positiva planned a transition into decentralized services. It believed that decentralized processes would increase the speed of services for the water boards and councils, improving the client experience.
A sales follow-up service was implemented. Through this, the regional supervisors and the agents working at the water councils can monitor the status of all the active policies. They can use the clients’ contact information to remind clients to renew their policies. This system for registering sales was developed by the Rural Insurance Unit and is seen internally as a more complete and friendly version that can provide better follow ups, so it may also be adopted by the general affinity business lines.
A television promotion was designed to be broadcasted in local TV stations. Further marketing materials were designed to align with both the graphic guidelines of La Positiva and to appeal to the target audience. Radio promotions were also broadcast in local radio stations. Messages were simplified to cater to the target market needs.
Different methodologies for training were tried, and an e-learning module was created and implemented. Incentives were provided to encourage the sales force to complete the content.
February 2014
Overall, the activities have led to increasing sales. Whereas La Positiva provided insurance coverage to just over 100 people in 2010, this figure had increased to over 8,000 in 2013.
Next Actions
During the last few years, La Positiva has established a distribution channel which involves three levels – the National Water Board, the regional water boards and the local water councils. La Positiva will continue to improve the interaction between these three levels to tap into the full potential of water boards as a distribution channel for rural clients. In addition to this, La Positiva will expand its product offerings to provide its clients with other services.