RURAL BANKERS ASSOCIATION OF THE                     PHILIPPINES:      ENHANCING THE CAPACITY OF RURAL BANKS              ...
AGENDA Microinsurance in the Philippine context   Philippine definition   Common Microinsurance Products Brief descrip...
Microinsurance: Philippine definition    A financial product where:          Premiums (computed daily) must not be more ...
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      Type of MF Accounts                                  Number                     ...
The Target Market of RBMicroinsurance                                                      Microfinance                  ...
Rural Bank Microinsurance Team                            Rural Bank                      (licensed as MI Agent)          ...
Servicing of  premium                                                                 Clientpayments and                  ...
Advantages of Rural Banks as MIAgents Ability to capitalize on existing operational structure  for cost-efficient MI sale...
Lessons of Rural Banks as MI Agents           Challenges                             RBAP’s Response Onerous requirements...
Microinsurance Agent Training forRBs2 days                                        1 day          Basic Microinsurance     ...
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 insigh...
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                        ...
Compliance Process                         REQUEST                 ASSEMBLE                  CHOOSE         SUBMIT    TRAI...
RBAPMicroinsuranc  e Website(Online Portal)
MI Website“Find a MIProduct” Feature
MI Website“RequestProposal” Feature
Partnership Framework                                                         Rural Bankers                         Rural ...
RUTH ASERON Microinsurance Coordinator         RBAP-MABSmicroinsurance@rbapmabs.orghttp://microinsurance.rbap.org
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Industry association of rural banks: strategic partner for developing access to microinsurance

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Ms. Ruth Aseron shares how the Rural Bankers Association of the Philippines leads to promote access to microinsurance for low-income clients in the countryside. This was presented during the 7th International Microinsurance Conference in 2011 in Rio de Janeiro, Brazil from Nov 8-10.

Published in: Economy & Finance, Business
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Industry association of rural banks: strategic partner for developing access to microinsurance

  1. 1. RURAL BANKERS ASSOCIATION OF THE PHILIPPINES: ENHANCING THE CAPACITY OF RURAL BANKS AS MICROINSURANCE AGENTSBY:RUTH ASERONMicroinsurance CoordinatorRBAP-MABS
  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 Type of MF Accounts Number (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 Rural Bank (licensed as MI Agent) Microinsurance Microinsurance Soliciting Officer Soliciting Officer Marketing / Microfinance Business Compliance Officer Supervisor Development Manager Sales Force (microfinance account officers / field staff)
  8. 8. Servicing of premium Clientpayments and Education claims RURAL BANK LICENSED MICROINSURANCE AGENT Marketing Consumer of IC approved Protection MI Products 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 Need to educate bank staff & able to support a major nationwide officers on microinsurance training effort to educate bank management and sales personnel on 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 forRBs2 days 1 day Basic Microinsurance Product Mastery Training Training (with qualifying exam) By RBAP-RBRDFI By Partner-Insurer • 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. Compliance Process REQUEST ASSEMBLE CHOOSE SUBMIT TRAIN For BSP No requirements In MI Basic + Objection your MI your to RBAP-Product Mastery Team partner well Notice RBRDFI RBAP-RBRDFI coordinates submission of rural banks’ licensing requirements to the Insurance Commission and then the Bangko Sentral ng Pilipinas (BSP).
  17. 17. RBAPMicroinsuranc e Website(Online Portal)
  18. 18. MI Website“Find a MIProduct” Feature
  19. 19. MI Website“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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