Zahra is a businesswoman who 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, including the operation her husband had to have last year when he was met with a road accident, can very easily undermine her family’s financial security. Not having any safety net to help cope with health expenses makes Zahra especially value 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, AlAmana introduced a microinsurance scheme called L’Assistance (“help” in French) which automatically comes with each client’s loan. The AlAmana staff saw L’Assistance as a social initiative to support clients in their time of need. It 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, there are about 240,000 clients enrolled but only a small number of claims (20%)* 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 to meet 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 help in the short-term but only serve to weaken their long-term financial situation. One loan client named Aziz, a shepherd, had to sell some of his sheep and cows at a loss to cover medicines to treat a stomach ulcer. In reality, he requires an operation to remove the ulcers, which he cannot afford. 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 had heard of it 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 hyper-focused on the terms of their loan. 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 were 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.
*20% is a low claims ratio for microinsurance. These schemes typically aim for 50% or higher, an indicator that clients are getting good value from the product.
