RURAL BANKERS ASSOCIATION OF THE                   PHILIPPINES:      ENHANCING THE CAPACITY OF RURAL BANKS                ...
AGENDAMicroinsurance in the Philippine context   Philippine definition   Common Microinsurance ProductsBrief descripti...
Microinsurance: Philippine       definition    A financial product where:        Premiums (computed daily) must not be m...
The Philippine Rural Banking Network Client base of 6 million Rural Banks cover 85% of  municipalities (mostly in rural ...
Size of the Rural Bank Micro-                Market                                                           Number      ...
The Target Market of RBMicroinsurance                                                     Microfinance                   ...
Rural Bank Microinsurance Team                      Sales Force       (microfinance account officers / field staff)
While the rural bank is a licensed agent of its microinsurance provider,      its microfinance clients remain of prime imp...
Advantages of Rural Banks as MIAgentsAbility to capitalize on existing operational structure for cost-efficient MI sales ...
Lessons of Rural Banks as MI                        Agents           Challenges                             RBAP’s Respons...
Microinsurance Agent Training forRBs • Fundamental Concepts and         • Microinsurance product Principles of Insurance  ...
The RBAP MI Training CourseKey Modules:  1. Fundamental concepts and     principles of MI  2. MI Regulations in the     Ph...
GROUP DISCUSSIONS                  (RBAP MI Training Approaches) Allows for sharing of field  lessons and practical insig...
Games & Simulation Activities  (RBAP MI Training Approaches)                        Understanding MI:                    ...
Results to Date    (as of Oct)# of Courses held       13# of Banks Trained      157# of Bank Staff                        ...
RBAP-RBRDFI coordinates submission of rural banks’ licensing requirements to theInsurance Commission and then the Bangko S...
RBAPMicroinsuran ce Website  (Online  Portal)
MI Website“Find a MIProduct” Feature
MIWebsite“RequestProposal   ”Feature
Partnership Framework                                                        Rural Bankers                         Rural B...
RUTH ASERON Microinsurance Coordinator         RBAP-MABSmicroinsurance@rbapmabs.orghttp://microinsurance.rbap.org
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RBAP MI Initiative for Rural Banks

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Presents the activities and results of the RBAP MI Initiative to build capacity among rural banks for MI Agent Licensing and Distribution

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  • Training of agents and compensation of agents What’s the difference between training of traditional agents and MI agents? More particulars on: Recruiting and selling and incentivizing and monitoring sales agents Cost-effectiveness of training agents Appointment of soliciting officers depending on how much business sense microinsurance will be Soliciting officers versus actual “seller of microinsruance”
  • Services a consumer base of approximately 6 million, comprised mainly of the entrepreneurial poor Almost 85% of rural banks are located in the countryside The network of rural bank branches and other banking offices is more than 2 times larger than the largest commercial bank in the country with more offices in rural communities than all the commercial and thrift banks. Total loan portfolio: PhP 98 billion Deposit base: PhP 105 billion
  • Discussion: WHAT ARE THE CHARACTERISTICS OF THESE CLIENTS? Microinsurance Basic Training Course Year 2011
  • How does the bank make money providing microinsurance with all these staff? Microinsurance is just one of the many products that the banks offer and since they already have the infrastructure and staff in place this is not really adding any expenses. Even the microinsurance soliciting officer also handles other bank responsibilities
  • Luckily most of these costs are covered by the insurance companies who provide training materials, client education materials, and take care of consumer protection support. Fees paid to the bank more than cover the minimal costs of servicing claims.
  • Also add the comparison matrix screen since this is quite interesting as well
  • EXPLAIN THE KEY ROLE OF RBAP IN TERMS OF WORK WITH REGULATORS
  • RBAP MI Initiative for Rural Banks

    1. 1. RURAL BANKERS ASSOCIATION OF THE PHILIPPINES: ENHANCING THE CAPACITY OF RURAL BANKS AS MICROINSURANCE AGENTSBY:RUTH ASERON 7th International MicroinsuranceMicroinsurance Coordinator ConferenceRBAP-MABS November 2011 Rio de Janeiro, Brazil
    2. 2. AGENDAMicroinsurance in the Philippine context  Philippine definition  Common Microinsurance ProductsBrief description of the Rural Bank Microinsurance Market  Potential size  CharacteristicsRural Banks as Microinsurance Agents  Roles and Responsibilities of Rural Banks  Advantages of RBs as MI Distribution Channels  Lessons of Rural Bank MI Agents  The RBAP response
    3. 3. Microinsurance: Philippine definition  A financial product where:  Premiums (computed daily) must not be more than 5% of minimum of non- agricultural wage in Metro Manila, hence premiums cannot exceed PhP 20.20 per day (US$ 0.47 daily) or PhP 505.00 per month (US$ 11.60 monthly)  Guaranteed benefits are capped at no more than 500 times the same daily wage or at an annual maximum of PhP202,000 (US$ 4,700)  Contracts shall clearly state benefits and terms  Easily understood by insured either in English or Filipino  Documentation requirements are “simple”  Collections coincide with cash flows - MI National Regulatory Framework -Minimum daily wage as of October 2010 is at PhP 404.00 or USD 9.40 and estimated workdays in a month is 25
    4. 4. The Philippine Rural Banking Network Client base of 6 million Rural Banks cover 85% of municipalities (mostly in rural areas) Total branch/office network is 2,700 Total loan portfolio: PhP 98 Billion (US$ 2.3 B) Deposit base: PhP 105 billion (US$ 2.6 B)
    5. 5. Size of the Rural Bank Micro- Market Number Type of MF Accounts (as of December 2010)Microfinance Loans Approximately 800,000Micro-Deposits 4,941,445 (86%) **Estimated Household Members 15,000,000 **Source: Philippine Deposit Insurance Corporation, December 2010
    6. 6. The Target Market of RBMicroinsurance Microfinance Borrower Microfinance Depositor Low-Income client of the Rural BankBSP Memorandum 027-2011 redefines “microfinance clients” to include anyexisting client classified by the bank as low-income or with an average annualhousehold income of PhP206,000 or less (USD 4,745)
    7. 7. Rural Bank Microinsurance Team Sales Force (microfinance account officers / field staff)
    8. 8. While the rural bank is a licensed agent of its microinsurance provider, its microfinance clients remain of prime importance.
    9. 9. Advantages of Rural Banks as MIAgentsAbility to capitalize on existing operational structure for cost-efficient MI sales and servicingCompliance to both insurance and bank regulators increases their credibility as agents of MI productsEnhance clients’ access to other relevant financial products and servicesBalanced recognition of MI as both a value-added client service & as a revenue-generating product
    10. 10. Lessons of Rural Banks as MI Agents Challenges RBAP’s Response Onerous requirements and  RBAP worked with the insurance and procedures make it difficult for rural banking regulators to clarify rules and banks to comply with insurance and develop a turn-key approval process bank regulations on their own  RBAP acts as a “better services Challenge in comparing and bureau” to assist banks in selecting and deciding on the best insurance monitoring insurance partners partners to work with  With the support of the USAID, ILO, and Insurance partners, RBAP was able to Need to educate bank staff & support a major nationwide training officers on microinsurance effort to educate bank personnel on management and sales microinsurance Need for more market information  Facilitate access to market information for regulators, rural banks and insurance providers through dialogues and technology-based feedback mechanisms
    11. 11. Microinsurance Agent Training forRBs • Fundamental Concepts and • Microinsurance product Principles of Insurance features • Difference between traditional • Special coverages and riders insurance and MICROinsurance • Regulations on MI sales, • Standard policy provisions marketing and servicing of MI • Proper Market conduct • Effective marketing of Microinsurance • Claims settlement
    12. 12. The RBAP MI Training CourseKey Modules: 1. Fundamental concepts and principles of MI 2. MI Regulations in the Philippines 3. Effective Marketing of MITraining Approaches: 40 % Lecture 25 % Group Discussions 35 % Games & Simulation Exercises
    13. 13. GROUP DISCUSSIONS (RBAP MI Training Approaches) Allows for sharing of field lessons and practical insights Typically interactive and open Employs Case Studies
    14. 14. Games & Simulation Activities (RBAP MI Training Approaches)  Understanding MI:  Barangay Bigkis (localized Treasure Pot game)  “Ang MI ay parang …” (Microinsurance is like)  Bahay-Buhay-Bagyo (“house-life-typhoon”)  Marketing & Selling MI:  The Mystery Object  D-I-G Tactic (Discover Interests then Get solutions)
    15. 15. Results to Date (as of Oct)# of Courses held 13# of Banks Trained 157# of Bank Staff 297Trained# of Banks in 45Approval Process )# of BanksApproved as MI 7Agents
    16. 16. RBAP-RBRDFI coordinates submission of rural banks’ licensing requirements to theInsurance Commission and then the Bangko Sentral ng Pilipinas (BSP).
    17. 17. RBAPMicroinsuran ce Website (Online Portal)
    18. 18. MI Website“Find a MIProduct” Feature
    19. 19. MIWebsite“RequestProposal ”Feature
    20. 20. Partnership Framework Rural Bankers Rural Bankers Research and Association of the Development Funding Support Philippines (RBAP) Foundation, Inc.Technical (RBRDFI)Assistance Mindanao Luzon Federation Visayas Federation Federation Member–Rural Banks
    21. 21. RUTH ASERON Microinsurance Coordinator RBAP-MABSmicroinsurance@rbapmabs.orghttp://microinsurance.rbap.org

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