CONSUMER PROTECTION IN TANZANIA’S MOBILE INSURANCE … · • Trained individuals are given...

CONSUMER PROTECTION IN TANZANIA’S MOBILE INSURANCE MARKET: INITIAL EVIDENCE FROM CONSUMER RESEARCH

February 23, 2017

Anna Abayo, TIRA In collaboration with CGAP and Busara Center for Behavioral Economics

© 2017 Busara Center Lab + CGAP 2

PILOT OBJECTIVES The Tanzanian Insurance Regulatory Authority (TIRA) partnered with CGAP and Busara Center for

Behavioral Economics to conduct exploratory research to identify possible consumer risks and consumer

protection priorities for the delivery of insurance via mobile phones and mobile money payment

channels.

• Demand-side focus: Map experiences and perceptions of consumers using mobile insurance

products.

• Mobile-insurance focus: Identify possible consumer risks, and consumer protection priorities, for the

delivery of insurance via mobile phones and mobile payment channels.

• Data privacy and sharing: Assess the awareness of data sharing agreements among consumers of

mobile insurance products, and identify possible data privacy risks for consumers.

• Formative and data collection: Busara collected consumer survey and mystery shopping data from

current (or past) mobile insurance customers in low-income and mid-income areas in Dar es Salaam.


RESEARCH TOOLS

Consumer Surveys:

• This involves administering pre-selected questions on mobile tablets by well-trained research staff

• The answers can either be quantitative (e.g. age, number of mobile insurance policies), qualitative (e.g.

what are your experiences with mobile-insurance) or categorical (e.g. on a scale of 1-5 how

comfortable would you be with your mobile provider sharing your personal information to other

insurance providers?)

• The phrasing of questions is particularly important, as poor phrasing could result in biased responses.

Therefore, Busara uses neutral, and impartial, question phrasing that does not include technical jargon

a respondent might not understand.


RESEARCH TOOLS

Mystery Shopping:

• It involves requesting trained individuals (customers) to make common inquiries with relevant staff, and

then record consumer experiences as well as what information was shared with the consumer by

sales/service staff.

• The answers recorded can be quantitative (e.g. did the service provider tell you about the costs

involved when signing up for the product?) or qualitative (e.g. please describe your encounter with the

sales staff).

• Trained individuals are given specific scripts to simulate different types of customers: e.g.

‘Experienced’ customers who showcase knowledge of policy terms, or ‘Inexperienced’ customers who

look to sales and service staff for guidance.


CONSUMER SURVEY

305 individuals were

surveyed; of this, 229

individuals were either current

or past mobile-insurance

customers.

100 individuals were trained for

the mystery shopping exercises; of

which 25 individuals were

‘Inexperienced’ customers,

and 75 were ‘Experienced’

customers.

MYSTERY SHOPPING

Busara engaged local mobilisers to identify separate current or past mobile-insurance users for

the mystery shopping (as many of the consumer survey respondents did not fit the requirements

required for mystery shoppers).

DATA COLLECTION STRATEGY

Busara engaged local mobilisers to identify current or past mobile-insurance users in the

areas of study for the consumer survey.


PROFILE OF CONSUMER SURVEY RESPONDENTS

51%

36%

13%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Primary andBelow

Secondary College andAbove

Education

52% 48%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Male Female

Gender

18%

35% 29%

18%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

19-25 26-35 36-45 46 +

Age


PROFILE OF MYSTERY SHOPPERS

57%

43%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Male Female

Gender

14%

43%

26%

18%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

19-25 26-35 36-45 46 +

Age


Information shared via SMS/Mobile App for on-

boarding is crucial to a large majority of customers.

HOW DID THE MAJORITY OF CUSTOMERS SIGN UP?

41%

30% 29%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

SMS / Mobile App Person at the branch office Sales phone call

Consumer Survey


Consumer Survey

WHAT INFORMATION WAS DISCLOSED DURING SIGN UP?

41%

59% 61% 53%

25% 22% 25%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Terms andconditions of the

product

Registrationprocess of the

product

Payment fees ofthe product

Mode ofpayment of the

product

How to file aclaim

Maximumeligible claim

amount

How to registercomplaints

Survey respondents claimed they were not fully informed about

the claims process


Mystery Shopping

WHAT INFORMATION WAS DISCLOSED DURING SIGN UP?

66%

39%

12%

34% 34%

5%

20%

10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

RegistrationProcess

Sign up costs ClaimsProcess

Method ofpayment

Premiums Exemptions Product types Terms andconditions

Mystery shopping seemed to confirm some of this, with details on

the terms and conditions, exemptions of the policy and the claims

process generally not being shared with the shoppers.


Consumer Survey

WERE RESPONDENTS AWARE ON WAYS IN WHICH THEIR INFORMATION WAS USED BY OTHER SERVICE PROVIDERS?

96%

4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

No Yes

Majority of respondents in our sample were not aware of the ways their

information was used by insurance service providers.


Consumer Survey

HOW COMFORTABLE DID PEOPLE FEEL WITH PROVIDERS SHARING THEIR PERSONAL INFORMATION WITH OTHER PROVIDERS?

45%

13% 12% 7%

23%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Least comfortable Somewhatcomfortable

Neutral Comfortable Very comfortable


Consumer Survey

BREAKDOWN BY GENDER

22%

7% 6% 4%

15%

23%

6% 6% 3%

8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Least comfortable Somewhat comfortable Neutral Comfortable Very Comfortable

Male Female

Males are relatively more comfortable sharing their personal

information.


Consumer Survey

BREAKDOWN BY AGE

39%

14%

21%

3%

22%

40%

12% 12% 8%

28%

44%

17%

8% 6%

23%

55%

9% 9% 11% 16%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Least comfortable Somewhat comfortable Neutral Comfortable Very comfortable

19-25 26-35 36-45 46 +


Consumer Survey

COMPREHENSION QUESTION 1

Background: This is a hospitalization insurance. You can get compensated TZS 40,000 per night you spend in the hospital - limit is 30 days and TZS 1,000,000.

Question: If you spend 5 nights in a hospital, how much can you get compensated?


Consumer Survey

RESULTS ON COMPREHENSION QUESTION 1

Most respondents answered correctly!

212,137 TZs

2%

89%

9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Don't Know Correct Incorrect


Consumer Survey

COMPREHENSION QUESTION 2 Background: This is a hospitalization insurance. You can get compensated TZS 40,000 per night you spend in the hospital - limit is 30 days and TZS 1,000,000. There are 3 options for the length and price of the term. They are: 1.2,999 TZS for 2 Months

2. 7,999 TZS for 6 Months Cover

3.15,999 TZS for 13 Months Cover

Question: If you choose option 1, how much will you have to pay for the insurance policy?


Consumer Survey

RESULTS ON COMPREHENSION QUESTION 2

10%

69%

21%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


21% of respondents were unable to answer the question correctly.


Consumer Survey

COST TABLE QUESTION 1

If you choose option 3, and you claim 10,000 TSZ for a visiting a dentist in one month.

In the same month, you are also treated in a hospital as an out-patient (OP).

What is your claim amount are you eligible for?


Consumer Survey

COST TABLE COMPREHENSION QUESTION 1

3%

30%

67%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Only 30% of the respondents answered the question

correctly.


Consumer Survey

COST TABLE QUESTION 2

If you choose option 3, and you claim 10,000 TSZ for a visiting a dentist in one month.

In the same month, you are also treated in a hospital as an out-patient (OP).

If you choose Option 4, what is the total amount of money you have to pay?


Consumer Survey

COST TABLE COMPREHENSION QUESTION 2

3%

57%

39%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%



POLICY IMPLICATIONS AND FURTHER RESEARCH

Some ideas from the research team include:

• Improve customer comprehension through standardized steps

for onboarding.

This could be achieved with more extensive consumer

comprehension testing, and then lab and live testing of possible

new approaches to raise comprehension.




• Utilize the data on claims and complaint filing challenges from

the mystery shopping to identify barriers that are stopping

claims from being filed or being settled.

Develop solutions to these barriers to outcomes such as reminders,

confirmation receipts, time commitments, notification of alternate

channels (e.g. Ombudsman) and easier access to well-trained

customer care staff.




• Have richer reporting of complaints data filed electronically

by providers with TIRA (nature of complaint, details, date, time,

location, product).




• Consult with industry on data sharing and data protection

policies for insurance and related telecommunications data.

Utilize legal review on privacy in digital finance as starting point of

diagnostic.


QUESTIONS


ANNEX: INFORMATION ON SOME OTHER RESEARCH TOPICS INCLUDED


Mystery Shopping

WAS YOUR POLICY CANCELLED UPON REQUEST?

20%

80%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

No Yes

80% of shoppers who visited the insurance branches to

cancel their policy had their policy cancelled by the

insurance staff after they made their request.


Mystery Shopping

SHOPPERS EXPERIENCE CANCELLING A POLICY

“She told me to give her my phone so that she can remove me. I gave her but I didn’t see what she was doing or

what number she was dialing. She gave back my phone and told me that she has removed me already and if I

receive any SMS from [PROVIDER] again I should go back there with that SMS and they will explain everything.

So, I went off unsatisfied for I didn’t know whether they will still charge me or SMS me.”

“Then she told me to dial *[XXX]*[XX]#, after dialing it the [PROVIDER] platform appeared with the words

“welcome to [PROVIDER]” with only one code of registration. So I asked her again like is it all? There is no code

for cancellation, and she said please [give] me your phone”

“She didn’t convince me on anything she just gave me a USSD code I could use to withdraw so I asked her after

withdrawing what will happen to the money I was charged? She told me about that money [MNO] has the

information. [MNO] has the information? But she was a [MNO] employee. I was amazed what other [MNO] she

was talking about”

“she didn’t give me a chance to ask other questions she cancel the call before I finish my inquiries.”


Mystery Shopping

REGISTERING A CLAIM: POINT OF CONTACT

68%

32%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Single point of contact Multiple points of contact

Most shoppers (~70%) were referred to a single point of contact

to resolve their claims.


Mystery Shopping

CLAIM APPROVED

58%

42%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

No Yes

Some of the reasons why claims were rejected: (i) lack of proper

documentation; (ii) lack of awareness about what circumstances they could

claim; (iii) and in some instances cancelled policies due to delayed payment

of premiums.


Mystery Shopping

SHOPPERS EXPERIENCE REGISTERING A CLAIM

“ I had gone to the hospital already with my money ….I told them I was injured and I had gone to the

hospital [and] I had my hospital papers to be compensated they told me that they don’t cover for such

cases maybe if I could have been hospitalized as in an inpatient.”

“They asked me if I had any supporting documents I asked like what kind of documents …..before

today I didn’t know the procedure to making a claim.”

“…If I get sick and hospitalized once they will cover 40,000 Tsh per day… they have not told me the

maximum amount they will cover.”


Mystery Shopping

WERE YOU GIVEN A CONFIRMATION THAT YOUR COMPLAINT HAD BEEN FILED?

100%

0% 0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

No Yes

Shoppers were not given any document, written confirmation, or

confirmation number to suggest that their complaint had been

filed.


Mystery Shopping

HOW WERE COMPLAINTS HANDLED?

68%

0%

32%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Oral Complain to sales staff Written Complaint Referred to customer care to file oral complaint

There was no form of written confirmation regarding the complaint. All

complaints were handled orally either by the branch sales staff or the

customer care staff

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