Developing, Marketing, and Managing Micro-Insurance Products and Partners

Developing, Marke0ng, and Managing Micro‐ Insurance Products and Partners  Reggie Ocampo  First Macro Bank  2010 RBAP‐MABS Na.onal Roundtable Conference  Hya= Hotel and Casino, Manila  June 3, 2010 

June 2006 – November 2007  1st Insurer  Schedule of Indemnity:  Accidental Death and Permanent   Disablement:           50,000  Unprovoked Murder & Assault:    25,000  Death Due to Sickness                   5,000  Death Due to other Causes      10,000  Hospitaliza.on Benefit:  Daily Hospital Benefit            70 per day   Max. of 183 days. Minimum of 3 days  Surgical Benefit            750  Miscellaneous                     350  Premium: 160 for the period of 6 months  Insured: Member Only 

Dec. 2007 – August 2009  2nd Insurer  Schedule of Indemnity:            Personal Accidental Death        Burial     Hospital                And Permanent Disability          Assistance    Beneﬁt  Client      25,000     5,000          50/ Day  Spouse      12,500                    5,000             50/ Day  Dependent Child                  6,250                      5,000             50/ Day   Parents of a Single              6,250                      5,000             50/ Day   Borrower                                                Max. of 15 days                                per illness     Premium:   160 for the period of six months 

Challenges Encountered from the first two  Insurance Provider  • Low Rate of Claims leading clients not to believe in the  insurance coverage anymore.  • Clients who had approved claims in the hospitaliza.on  benefit felt the amount is too small. (Some.mes cost of  travelling back and forth from clients house to the hospital is  higher than the amount paid by the insurer per day.)  • Clients complain that they cannot feel the insurance benefit.  • Too many exclusions leading to very low rate in approval of  claims.  • Result of claims takes a long to .me to know  • Lacks training to field staff leading to confusion regarding  Insurance Policy that results to misunderstanding with clients.  

Claims for the Year 2008 & 2009  Year  Total   Approved  Type of Claim  Amount of  Amount of  Number of  Claims  Claim  Premium  Claims  Collected  2008  5  1  Hospitaliza.on              200            645,560  2009  9  4  Loss of Life and         36,600            273,950  Hospitaliza.on  Total  14  5  36,800  919,240 

What is Success in Microinsurance?  • Insurers  – Proﬁtability  – Expansion of risk pool and market  • Delivery channels  – Addi.onal income stream  – Compe..ve advantages  – More stable clients / members  • Low‐income market  – Aﬀordable, accessible, responsive products that help  reduce risk 

Considera0ons in choosing an Insurer  partner  a) Are they stable, sound, and profitable?  – How long have they been in business?  – Who are the board of directors?  – Review annual reports and company profile  b) Are they compliant with regula0ons?  – Does their status fit your needs (life or non‐life)?  c) Are they flexible?  – Will they accommodate clients’ needs?  – Is there evidence of innova.on?  d) Is their pricing appropriate to the market? 

Considera0ons in choosing an Insurer  Partner (Con0nua0on)  e) What is their staff profile?  ‐ Do they understand the market of microfinance?  f) What is their claims reputa0on?  ‐ Are claims paid quickly?  ‐ Are their claims procedures reasonable?  h) Capacity  ‐ Do they have excess capacity for the development  and management of microfinance ins.tu.on?  ‐ Do they use manual or IT systems? 

Factors in Microinsurance Purchases  • Understanding of insurance  – Knowledge will make client appreciate the product  and make the client know what he is paying for  – Create a posi.ve percep.on with insurance  • Product Design  – Will the product serve the client need?  – Is it aﬀordable?  – Is it easy to understand? 

Transi.on to Micro Ensure  • Signed MOU with Micro Ensure January 2009  • What took the Interest of FMB is that the  insurance premium have lesser exclusions and  simplicity of the processing of claims.  • Key persons from FMB and Micro Ensure have  several mee.ngs to design the Insurance  Package, as well as the price of premium. 

September 2009 to Present  Insurer: Grepalife  Intermediary: Micro Ensure Philippines  Schedule of Indemnity:                                           Loss of Life            Funeral        Total  Client       40,000                      10,000             50,000  Spouse       20,000                            10,000             30,000  Dependent Child/     10,000                              5,000             15,000   Sibling  Parents of a Single               10,000                               5,000            15,000   Borrower                                                    Premium:   370 for the period of six months  Other Features:  • All cause of death is en.tled for Funeral Assistance Beneﬁt  • Advance Funeral Beneﬁt (1 day processing)  • Contestability period is for 12 months.  Ajer contestability period, any cause of death will be  covered  

Added Services Provided by Micro Ensure  • Promo.onal Materials(e.g. Comics telling the  benefits of Micro Insurance and benefits of  being a client of a Rural Bank)  • Training of Bank Staff 

Status of Claims in Micro Ensure  Year  Total   Approved  Type of Claim  Amount of  Amount of  Number of  Claims  Claim  Premium  Claims  Collected  2009  1  1  Loss of Life            50,000  Of the client  214,875  2010  3  3  2 Loss of Life of         20,000      240,375       dependent  1 Loss of life of a  member  Total  4  4  70,000  455,250 

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Developing, Marketing, and Managing Micro-Insurance Products and Partners

by MABSIV on Jun 11, 2010

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Developing, Marketing, and Managing Micro-Insurance Products and Partners — Presentation Transcript