Developing Marketing and Managing Microinsurance 2

Developing, Marke0ng, and Managing  Micro‐Insurance Products and Partners  William Martirez MicroEnsure Philippines 2010 RBAP‐MABS Na.onal Roundtable Conference  Hya= Hotel and Casino, Manila  June 3, 2010 

“Microfinance: From Best Practice to Next Practice” 2010 RBAP-MABS NATIONAL ROUNDTABLE CONFERENCE June 2-3, 2010 Hyatt Hotel and Casino, Malate, Manila Developing, Marketing, and Managing Micro-Insurance Products and Partners Presented by: William H. Martirez Country Manager, MicroEnsure Philippines

Micro insurance Providers Insurance and insurance-like providers  Life and Non-life Insurance Companies  Cooperative Insurance Societies (CIS)  Insurance/Service Cooperatives  Mutual Benefit Associations (MBAs)  Preneed Companies  Health Maintenance Organizations (HMOs) Intermediaries - entities or individuals such as brokers and agents - facilitate provision of insurance services by licensed insurance providers  Brokers act on behalf of the clients in the purchase of insurance products  Agents act on behalf of the insurance companies in the solicitation of insurance business

Managing Micro insurance Products and Partners The Intermediary Model Risk Carrier • Insurance Company • Reinsurance Company • Cell Captive Front Office Back Office • MFIs, • Systems – Data Capture/ • Rural Banks Reporting • Aid Agencies • TPA – Claims Servicing • NGOs • Product Design/Negotiation • Retail • Training and Education

Managing Micro insurance Products and Partners The Intermediary Model MICROENSURE AS AN INTERMEDIARY  Negotiates with insurance companies on behalf of clients to keep premiums to a minimum  Aim is to achieve sustainability for insurance companies, product distributors, and clients Effective Product Distribution  Work in partnership with organizations that are currently serving the poor such as microfinance organizations, rural banks, as well as humanitarian organizations that are providing non-financial services Sophisticated MIS system / Back Office Processing  ey to minimizing the cost of micro insurance K  racks details of clients covered, collects premiums and administers claims. T Extensive market research and insurance expertise  Products designs that address the real financial risk management needs of the poor

Establishing Partnership to Micro insurance Provider Important Factors: 1. Products and Product Development  an insurance provider that  an understand the needs of the clients. C  an understand operational realty of the Bank C  hould be able to design a product that is more suitable for all S parties 2. Transaction cost  anagement Information System for transacting insurance business M  n insurance provider/intermediary that benefits from a wider A client bases and global reach can fund such an overhead  nvestment in system reduces transaction cost I  perating efficiencies O

Establishing Partnership to Micro insurance Provider Important Factors: 3. Administration  est equip to handle administration relating to claims processing b 4. Additional channel of sale 5. Staff training and Client Education 6. ange of Sustainable Product R 7. Distribution Network/Linkages 8. echnological Enhancement T 9. xpertise and experience in insurance and microfinance E 10. equired no capital outlay on the part of bank R

Innovations: Micro insurance promotion and service delivery Automated Insurance Management System  A critical component in the timely and cost effective provision of micro insurance services to Rural Banks and MFIs  A state-of-the-art technology that specializes in the following:  Data encoding  Large volume data processing  Data Management  Insurance Claims Processing  Data Synchronization  Automated Reports

Marketing Micro insurance Services  Identify target market  Determine the main messages to convey  Protection  Solidarity  Optimism  Trust Three Step marketing Process Raise awareness Cultivate an - About insurance understanding of Activate the - About a specific insurance (costs market insurer/intermediary and benefits Source: Protecting the Poor, A Micro insurance Compendium edited by Craig Churchill

Marketing Micro insurance Services A major hurdle for marketing insurance to the poor is the lack of differentiation between microinsurance and conventional insurance products Client education  esigned to promote understanding of the options for managing risk d  xplain the fundamental concepts underlying insurance and the terms that define e it so that the poor can determine what is the most suitable option in their particular case Development of comic books in clients' local languages  rovide an understanding of insurance in an informative and easily p understandable format. Materials are the result of in-depth research into client understanding and attitudes concerning insurance

Innovative insurance products:  Security/insurance for the entire family  Loan redemption - fire and calamity assistance - unemployment insurance - daily hospital income benefit  Micro housing insurance - fire, lightning, typhoon, flood, earthquake, volcanic eruption, landslide) - evacuation assistance and family personal accident insurance  Protection to micro entrepreneurs and their tools of trade - property insurance - burglary/housebreaking - personal accident insurance - money, securities and payroll - electronic equipment insurance - fidelity guarantee  Climate responsive index products - weather index based crop insurance for drought/dry spell, excess rain, and typhoon wind speed

THANK YO U MICROENSURE PHILIPPINES  Website:     www.microensure.com  Email:     william.mar.rez@microensure.com          Phone:    (033) 329 0729; (033) 320 0387        (02) 893 9752

Developing Marketing and Managing Microinsurance 2

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