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11 rbap session presentation gpm 1121


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Microinsurance Conference in Rio de Janeiro, Brazil

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11 rbap session presentation gpm 1121

  1. 1. RBAP SESSION: Learnings  from the  7th Microinsurance International  Conference November 8-10, 2011Rio de Janeiro, Brazil
  2. 2. Discussion Framework  Partnerships RBAP-RBRDFI Microinsurance Initiative Innovation and Distribution Technology
  3. 3. MI in Latin America and the Caribbean   o Insurance regulations are not tailored to the unique characteristics of MI o Common products: funeral, credit-life, disability (life and health less available) o Financing mostly comes from the private sector. Premiums and insured value is rarely subsidized by the government MI Industry is INNOVATIVE • POS – shoppers can buy life insurance • Remittance – based – emigrants can buy policies that when death happens while they are abroad, it covers the cost to transport their bodies home • Catastrophic – policies against natural disasters in Haiti (parametric model) • Brokers/Intermediaries – improvement of variety and quality of insurance products and to expand the channels
  4. 4. Other Innovations: LA and the Caribbean - cancer-indemnity for low-income women- accident insurance for agri, cattle and fishery workers- life insurance drawn when eligible for micropensions- hospitalization coverage- indexed agricultural insurance that may be linked to yield or to climate-related losses
  5. 5. Low Takeup Why are people uninsured?• Insufficient fund to buy insurance• Lacks understanding of insuranceProblems in the MI Market• low takeup is common• high distribution costs that raise issue on equityTo boost penetration…• subsidies• mandatory requirements• reliance on private sector provision• right balance between public and private
  6. 6. MI in Brazil   • MI Resolution: focused on product regulation, prudential regulation,market conduct regulation• Lessons: • utility, telecommunications and retailer distribution • product development: use of client data to design appropriate product offering • sales: layered commission structures and the use of non-monetary incentives • premium collection: existing bill-collection infrastructure, flexible premium collection • servicing: use of electronic in-store help terminals, one-stop service desks • claims process: simplified, outsourced, in-store claims submission
  7. 7. Technology in MI Challenges in MI:- Accessibility- Channel- Enrollment- Billing- RelationshipTechnologies in MI to help address: SCALE and EFFICIENCY- Cell phones - accessibility, channel, enrollment, billing, relationship- PoS - accessibility, channel, enrollment, billing- Barcodes, billing- Social Network - relationship- Internet - accessibility, channel, enrollment, billing, relationship
  8. 8. Technology plays a fundamental role to:- increase operations scale- increase operations efficiency- create a communication channel to increase the relationship and education- reduce costsTechnology for MI:- The need of rural customers is low-value, low-margin, high volumebusiness, and calls for solutions that are highly decentralized, flexible andcost-effective- Challenge for insurers is to bring down cost of servicing customers anddistributors- Ghana: enrolment and premium payment thru mobile phone- Philippines: simplified claims system- Tanzania: enrolment thru handhelds (ipods) to capture data and biometrics
  9. 9. Why mobile insurance?: the case of Ghana •Customer access: poor have mobile phones•Financial transactions: faster, cheaper, easier, safer•Information transfer: efficient marketing, enrolment, administration•Consumer Trust: reputation, familiarity of telecoms vs. insurers•***Tigo - coverage based on monthly airtime usageRequirements:- must enhance the channels core business- reliance on the channels brand- product, process, technology must be simple- premium collection requires creativity- incentives must be aligned- tech should serve the product- capital must be patient
  10. 10. Managing Microinsurance Partnerships  The Partnership Lifecycle: Search Assessment Evaluation and Selection Maintenance Incentives Pre- Implementati agreement on process
  11. 11. What have we been doing right? • Consistent communication with regulatory bodies governing MI in thePhilippines• Formulation of the MI National Regulatory Framework that sets theparameters in product development and distribution• Active involvement of private insurance providers as risk-carriers underthe Principal-Agent Model•Building the capacity of community-based institutions like the ruralbanks as distribution channels for MI• Insurance education integrated to the Basic MI Training to raiseawareness and appreciation of insurance products
  12. 12. What have we been missing? • Adoption of innovative technology in enhancing distribution andexpanding MI outreach• Still to tap the popular usage of mobile technology in addressingchallenges in accessibility, premium collection, claims payment,reporting and feedback• Response of RBs in the licensing procedure • About 52 rural banks are in the different stages of the licensing process• Lack of deposit-linked MI product
  13. 13. What needs to be done?  • Promotion of mobile phone technology usage to rural banks and their insurance partners. If possible, pilot bank for the mobile technology be given financial aid by RBAP through the ILO innovation grant • Usage of SMS, social networking, internet in the promotion of RBAP MI Initiative on insurance education and soon, financial literacy to target clients • Use of the innovations mentioned above on close follow-up and monitoring of RBs in their licensing process •Encourage both insurers and RBs to tap the large number of microdeposit clients in the bank Opportunities: • development of agricultural-based MI product • retail-like MI product that may be marketed to accredited RB bayad centers
  14. 14. SALAMAT!