As of December 2013
Naya Jeevan was launched with a very lean operating budget in 2009, and has used the Microinsurance Innovation Facility’s Grant and other grants to considerably strengthen its organizational structure, processes, and capacity. Key personnel such as a communications director, marketing manager, customer services coordinator, field team leader, and field force enrolment officers have been recruited, trained, and equipped with the necessary hardware (not all of them have turned out to be the right choice and some have had to be replaced or let go as revenues have not matched financial projections). Functions not intrinsic to the business model, such as human resources management and legal, continue to be outsourced. Standard Operating Procedures (SOPs) have been codified for key workflows such as business development, claims, medical helplines, member services, and the management of the NGO school program; SOPs enable Naya Jeevan to maintain quality control while scaling up its processes and internal resources in line with future growth. More scalable, cost-effective value-added services (VAS) – such as a two-tier medical triage health line – are currently being evaluated. The triage portion of this two-tier system can be outsourced at a time when the volume of incoming health-related queries makes it impossible for Naya Jeevan to provide such high-touch services by itself.
At the same time, has found the need to adapt its processes. For example, it was discovered that although corporate workers expressed enthusiasm to insure their informal domestic workers, their reluctance to fill out the necessary paperwork and provide the necessary personal data about their domestic workers presented a major obstacle. As a result, the data requirements were reduced and electronic enrolment forms are currently being tested.
Dealing with multiple insurance companies (and their fluctuating personnel) also poses challenges related to institutional knowledge. Issues around data integrity and data security have been identified and rectified over time.
To address the lack of understanding or any prior experience of insurance by current and potential beneficiaries, and to help them to make optimal use of their health benefits, Naya Jeevan has produced a range of multimedia educational materials. These also serve as refreshers following initial in-person, group training. Since Naya Jeevan’s marketing material is primarily in English and directed towards potential donor-sponsors and corporate financiers, additional marketing material in local languages were also developed for low-income insured members, including regular communication like newsletters.
To increase direct interaction with the insured beneficiaries, Naya Jeevan has developed and delivered a suite of preventive behaviour change interventions. Furthermore, a routine practice of proactive, qualitative beneficiary satisfaction surveys has been implemented, with quantitative surveys also currently being developed.
The chief limitation of Naya Jeevan's business model to date has been its inability to recruit really large numbers of insured persons in a single deal – unlike mandatory insurance for microfinance clients in which tens of thousands of borrowers are covered in a single policy. This slower-than-anticipated market penetration has forced Naya Jeevan to continuously explore additional channels to insure low-income beneficiaries. Not all of these alternate distribution or sales strategies have been successful, e.g. targeting affluent women in spas, cosmetic companies, or themed tea parties to propose the coverage of their maids/domestic staff seems like a good idea in principle, but has yet to take off in practice.
At the same time, some channels have been more successful than expected in insuring several thousand additional insured, e.g. low-income contract staff of the Defense Housing Authority (a large residential association with approximately 150,000 housing units in Karachi, Lahore, and Islamabad/Rawapindi). Another surprisingly responsive market segment has been the ports and shipping industry, which employ a large low-income labour force at Karachi Port working in unloading/loading shipments, transportation and so on. Naya Jeevan has so far enrolled two major shipping companies that are active at Karachi Port, each delivering a large pool of associated beneficiaries. Other distribution channels have yet to be tested, such as GEO TV, one of Pakistan’s most important TV channels that is widely viewed by the Pakistani diaspora (US/Canada, UK, UAE).
Some projects have been able to reach larger numbers, such as the USAID-financed project to provide primary health care to 250,000 residents and integrated health insurance to 5,000 residents in an urban Karachi slum (Sultanabad) adjacent to the US consulate. An important part of this p roject has been the activation of a mobile banking platform (UBL OMNI) that will enable auto-debited, digital co-payments by beneficiaries and promote their financial inclusion.
On the other hand, several partners that could contribute large numbers of insured beneficiaries, e.g. Unilever, are still testing the quality of services on a subset of all possible beneficiaries. This has put Naya Jeevan in a challenging position as it has to prove its excellence to an increasingly diverse set of clients and beneficiaries, while scaling up human resources cautiously based upon incoming cash flows.
And like every other venture in Pakistan, Naya Jeevan’s plans have been adversely affected by the catastrophic floods that disrupted every aspect of life in the country in 2010 and again in 2011, highlighting the company’s exposure to all aspects of country risk including:
- Environmental risk: natural disasters, e.g. floods, earthquakes
- Regulatory risk: the Securities Exchange Commission of Pakistan (SECP) has been consulting with experts from the World Bank regarding the introduction of microinsurance regulations in Pakistan. However, Naya Jeevan does not anticipate any adverse impact on its social business model as it is a SECP-registered, licensed insurance brokerage in full compliance with SECP guidelines and the 1984 Insurance Ordinance, etc.
- Political risk: while Naya Jeevan is apolitical, there is always a remote risk that its business model is sabotaged by the political realities in Pakistan. Having said that, Naya Jeevan has actively engaged the Federal government – especially in the design of the microinsurance product for the Benazir Income Support Program and the Khyber Pakhtunkhwa province government for their provincial HMI scheme that they are introducing in four districts (1.2 million lives) in a pilot study.
- Security risk: while the NJ office is located in a relatively safe locality of Karachi, Naya Jeevan’s first community health center inauguration was marred by the assassination of a local community mobiliser and a local community leader (both were actively involved in local politics as members of a political party). While this made operationalizing the clinic initially challenging, other locals came forward to provide significant support to Naya Jeevan in enabling our healthcare providers to care for patients in the community
- Inflation risk: The upwardly spiraling cost of medical services will inevitably raise premiums; Naya Jeevan may not be able to pass on these higher premiums to clients for their low-income beneficiaries in the short term, potentially hindering our growth if we choose to pass on inflationary effects. Naya Jeevan will continue to add more underwriters and seek the lowest cost underwriter wherever possible.
Community-based health insurance (CBHI) in Sultanabad
A community-based health insurance (CBHI) scheme was initiated in August 2012 in Sultanabad, an urban slum area of Karachi. Funding was provided by USAID for the provision of in-patient health insurance to 5,000 community members, with an additional managed-care fund for outpatient expenses. Naya Jeevan also set up a clinic in the community with donor support to make the CBHI scheme as tangible as possible.
The aim of the CBHI scheme was to raise awareness of health insurance among the low-income slum residents, to raise awareness of health issues, and to test their willingness to self-pay after experiencing a comprehensive health insurance scheme. Naya Jeevan will test whether there is sufficient willingness to pay for insurance premiums at the end of USAID’s financing, but will seek to continue operating the clinic for the community.
The clinic is also accessible to non-USAID funded insurance policy holders, who have the Naya Jeevan insurance health plan but a company or a business as their low-income employees. A few such policy-holders have also begun using services at the clinic, though whether this is due to their comfort dealing with Naya Jeevan as their insurance provider or due to their geographical proximity to the clinic remains to be explored.
The clinic acts as a first responder to community members’ medical complaints, with a male and female doctor performing an initial screening of patients before referring them to two nearby local hospitals for further consultation or hospitalization if needed. As a result, Naya Jeevan has been able to maintain a healthy claims ratio through both the managed care fund (for secondary outpatient consultations at hospitals), and via the inpatient hospitalization insurance plan, with pro-rated claims ratios of 61.20 and 62.58 respectively. Focusing on primary care may be the key to limiting losses in hospitalization insurance programmes, as this experience with the community clinic has suggested.
Partnership with Unilever
Naya Jeevan partnered with Unilever to enrol their district sales representatives (DSRs) in the Naya Jeevan Health Plan. This was Naya Jeevan’s first partnership with a major multinational FMCG company, and was made possible by Unilever’s CSR team, which proved a champion for the project. Unilever has made it mandatory for its network of more than 100 distributors all over the country (ranging from small to medium-sized businesses) to provide health insurance to their informal and formal employees as a pre-condition for doing business with Unilever. Unilever’s motivation for this corporate policy change is not purely philanthropic – one of their distributor’s informal employees suffered a life-threatening accident on the job and passed away because he was unable to afford the associated medical expenses. Media spotlight on this issue threatened to harm Unilever’s corporate image.
Since then, more than 2,500 beneficiaries have enrolled in the health plan, with Unilever planning to expand this collaboration even further to mobile ice-cream sales agents (MSAs) - essentially ice-cream ‘wallah’s selling ice-cream on bicycles or tricycles.
The partnership with Unilever has made it possible for Naya Jeevan to catalyze the health insurance of disconnected and scattered SMEs and micro enterprises. Replication of this programme may hold the key to accelerated growth for Naya Jeevan. However, Unilever has, to date, been unwilling to facilitate the enrolment of low-income contract workers in their own factories in interior Sindh. These workers are seasonal, and part of a labour union with whom Unilever has had a thorny relationship in the past, including multiple on-going court cases. Naya Jeevan will have to find a way to work around this kind of barrier, especially since such unions are fairly common in Pakistan, and often at odds with companies’ management.
Naya Jeevan has also previously attempted to persuade Unilever’s high and middle-income staff to insure their informal household staff. Despite a great deal of interest and apparent willingness, this was unsuccessful as Unilever’s staff was put off by the paperwork needed to sign up. Naya Jeevan is now working with Unilever to establish a simple, online registration process.
Customer relationship management system
A customer relationship management (CRM) system has also been implemented. A local technology company (M3 Tech) was selected to implement the software, which is accessible online. The software allows Naya Jeevan and its clients to monitor claims remotely, retrieve plan details and beneficiary information, and look at historical information. Kinks in the software are still being worked out to make it more user-friendly prior to scaling this technology platform.
Monitoring and evaluation
As its products evolve, and numbers of beneficiaries reach scale, measuring and monitoring the impact of the health microinsurance product will be an increasing priority. To this end, Naya Jeevan has partnered with an independent research institution based in Singapore, Shujog, to develop a robust impact assessment model that measures the social return on investment (SROI) on every dollar that is put into the programme.
Activities in the pipeline
Potential partnership with Nestle
Naya Jeevan has also begun approaching other large MNCs in Pakistan to enroll their supply chain beneficiaries in the plan. One MNC that Naya Jeevan has had more advanced discussions with is Nestle, which has one of the largest supply chains in Pakistan, with more than 200,000 smallholder dairy farms in Punjab, incorporated into an extensive logistics system that delivers milk to Nestle’s factories. Nestle has multiple stakeholders who measure the milk quality at each step in this supply chain, before authorizing milk to move up the supply chain. Naya Jeevan’s discussions with Nestle so far have revolved around enrolling a sub sector of these 200,000 farmers, financed by Nestle as part of a quality control incentive/reward program, and administered through their various collection points in Punjab. However, Nestle has so far been reluctant to subsidize the premiums for such a large cohort, citing their own budgetary constraints (despite record profitability in Pakistan). They also have competing USAID-funded CSR initiatives running with these farmers, which are focused on upgrading farmer’s technical capacity and training. They are therefore reluctant to start the health insurance plan before these CSR initiatives are complete. Naya Jeevan will continue its discussions with Nestle to find a sustainable way to enrol the farmers into its health plan and/or explore other potential beneficiaries in their other business units.
Value-added services
Naya Jeevan has also begun other strategic collaborations with various partners to expand the scope of its value-added services. One such project that is currently in development is an IVR (interactive voice recording) system with a large telecommunications company, Warid, which has a subscriber base of about 15 million people in Pakistan. Naya Jeevan is currently developing pre-recorded health modules on various health topics. People can call and choose to listen to the modules based on their interest and needs. This service will be available across Pakistan, in multiple local languages, and provided to customers on a subscription-based model, with a revenue-sharing agreement between Naya Jeevan, Warid, and the technology partner, M3Tech.
A similar project to enhance beneficiary value is a planned collaboration with UBL OMNI, a mobile money retailer, in which Naya Jeevan acts as an agent of UBL IMNI. As an agent, Naya Jeevan would be able to disburse claim payments and other transactions to a network of more than 10,000 small retail shops all across Pakistan, taking advantage of the branchless banking system popular with the bottom of the pyramid population. This should reduce transaction time and enhance client value and satisfaction for its members.
Pharmacy smart card
Naya Jeevan has also had extensive discussions with local technology partners about the development of a pharmacy smart card. Since pharmaceutical expenses comprise a major portion of health expenditure for low-income people, automating the pharmaceutical value chain from doctor to retailer to customer provides the opportunity to cut down on waste and lower out-of-pocket costs for clients at the same time.
Naya Jeevan would act as a pharmacy benefit manager, using direct-from-manufacturer, pre-negotiated volume discounts on drugs pre-loaded onto a prescription smart card for beneficiaries. Doctors would prescribe the drugs electronically using a smart phone-based mobile application and pharmacists would be able to match the prescription electronically transcribed onto the smart card to pre-authenticated, discounted drugs in their stock. This would help reduce medical errors, cut down on counterfeit medicines in the marketplace through point-of-sale (POS) product authentication technology, and reduce fraudulent claims in corporate OP programmes.
Launching the pharmacy smart card commercially for beneficiaries will require significant technical expertise and project focus from Naya Jeevan, as well as additional financing. Naya Jeevan is continuing to approach impact investing partners with whom it could collaborate and move the proposal from a research and development phase into a commercial reality.
Potential expansion into the northern province of Khyber Pakhtunkhwa (KPK) under a Government of Pakistan and German Development Bank Initiative
In July 2013, the German Development Bank KfW, in partnership with the Government of Pakistan, solicited expression of interests from various insurance companies and consortiums for a mass health microinsurance scheme to be initiated in the northern Pakistani province of KPK. The scheme aims to cover more than 1.15 million people, with their premiums and services financed by KfW, under the project ‘Support to Social Health Protection in Pakistan’ for a period of 5 years.
Naya Jeevan jointly submitted two separate bids in a consortium partnership with Jubilee Insurance and with Pak-Qatar. Jubilee has extensive experience in microinsurance provision as the underwriter of the now-defunct First Microinsurance Agency of Pakistan (FMIA), while Pak-Qatar’s Takaful (Islamic) takaful-insurance is more aligned to the conservative nature of the communities in KPK. Naya Jeevan’s role in this new microinsurance scheme would be as a community mobilizer and administrator of primary care centers in the scheme, in the provision of cashless OP services, and in the provision of various value-added services such as the 24/7 tele-health line. Naya Jeevan’s proposals have already been identified among the finalists, and KfW plans to announce the winning consortium in the first half of 2014. If successful, this would be Naya Jeevan’s first entry into the northern KPK region.
Next Actions
Capacity building
Naya Jeevan is currently working on strengthening its member services division and offering its VAS on a standalone basis to various insurance companies and microinsurance providers. It will also soon add another primary care clinic, this time linked to its work with the Defense Housing Authority.
It is investing in the automation of processes, training of personnel (through the USAID-sponsored Assessment & Strengthening Program (ASP)), and scaling of its sales team to develop business with more companies and institutions in the country.
Naya Jeevan will also expand raising money to allow it to expand its work north into the Punjab province. It hopes to open an office in Lahore, so that it can work with businesses and service beneficiaries in the area.
It has recently hired a doctor and a business development professional in Lahore, the capital of Punjab region, so that it is able to attract new clients in a previously unexplored region of 90 million people, and to provide them with VAS.
Product development
Expanding its range of VAS is critical for Naya Jeevan to not only move towards financial sustainability, but also to increase the value proposition of its products. Naya Jeevan will expand its product and service repertoire by doing the following:
- Offer life insurance to both current and new clients for their low-income members. Some clients have expressed an interest in life insurance as well as health insurance, and Naya Jeevan is currently developing this option. This would provide an additional revenue-generating product, and allow Unilever to meet more of its beneficiaries needs.
- Create a network of discounted primary care clinics. This will involve establishing more of its own clinics, as well as integrating existing low-cost clinics in the cities and rural areas where Naya Jeevan’s members live.
- Secure funding and technology partners for launching its national Pharmacy Smart Card programme and incorporating this innovation into its HMI offering
- Explore direct-to-consumer distribution channels for retailing Naya Jeevan’s HMI product through the retail chains of its various strategic partners, such as UBL Omni and Warid/Telenor. This will require fine tuning its HMI offering to control anti-selection, and tailoring the benefit package to what can be cost-effectively offered to the mainstream low income population.
- Embrace telemedicine/video consultation to provide underserved remote/rural communities with access to its services. Naya Jeevan will preselect such clinics, or partner with existing health centers in rural areas to provide telemedicine services.
Replication
Naya Jeevan has been approached by various organizations and institutions (including the abc* Foundation in the US) to replicate its partner-agent-sponsor model in these countries. Depending on the similarities in context, Naya Jeevan will explore partnering with local institutions in these countries, possibly through a franchise model. This will naturally be contingent on it securing reasonable financing to undertake these endeavors. Similarly, Naya Jeevan’s business model can potentially be replicated in the United States itself, but further work is required to conduct a feasibility study on how appealing Naya Jeevan’s value proposition will be in the post-Affordable Care Act (ACA) landscape.
Experimenting with new schemes
Possible new schemes include the KfW microinsurance scheme in partnership with the KPK government. Naya Jeevan will also explore entering into a transnational diaspora agreement with US health insurers and institutions, for the health insurance of the Pakistani diaspora in North America and the Middle East. Such an insurance product would be financed in the host country of the diaspora agent, with service delivery occurring in the home country. Naya Jeevan has already had some initial discussions on such an arrangement with Aetna, ARY, and GEO TV.
As of February 2016
Innovations
Over the past year, Naya Jeevan launched doctHERs (www.doctHERs.com), a novel healthcare delivery system in which home-based, female doctors provide primary care via nurse-assisted video-consultation. Client beneficiaries have responded positively to this innovation. In addition, Naya Jeevan has been prototyping e-novatRx, an e-Pharmacy Benefit Management system that would give consumers access to pre-discounted, prescription medicine and health supplies at a nationwide network of retail pharmacies, all payable digitally via the government’s national ID smart card.
Distribution
In addition to its existing partnership with Unilever, Naya Jeevan has been able to bring on board other fast-moving consumer goods (FMCG) partners as distributors for its health microinsurance product. These include a partnership with Levi to cover workers in textiles factories supplying garments for the company. Interviews with factory workers showed that many factory workers in Pakistan (especially in small factories subcontracted by larger factories) do not receive benefits or health protection. Naya Jeevan hopes to provide health insurance to such workers through its partnership with Levi. Another new partner is Philips, which is offering Naya Jeevan’s health plan to the network of small businesses that act as distributors of its products. Naya Jeevan hopes to expand to cover more supply chains and further countries. In particular, it is currently exploring possible opportunities in Mexico.
The restaurant industry also continues to be very important for Naya Jeevan. These businesses face high risks if their customer-facing staff becomes sick, especially with infectious diseases. Therefore the value of Naya Jeevan’s health insurance and value-added services resonates easily with them.