Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Microinsurance and Savings Groups  Sybil Chidiac, CARE USA - Access Africa          Jerome Dadjo, CRS Benin  Patrick Kimat...
Savings groups and their purposeBuilds on traditional          In 1991, CARE originated SGs in                            ...
What is the need for external insurance?1.   CARE forged a partnership with MicroEnsure2.   Collaborated on market researc...
CARE and MicroEnsurePremium• $2.85 (6000 UGX)Coverage Period• 12 months once entire premium paidCoverage• VSLA Member – $1...
CARE and Financial LinkagesLinkage Guidelines (developed in 2008):• Client need identification• Build/ customize the produ...
CARE and Financial LinkagesKey Principles of Linkages upheld (developed in 2008):• Groups are linked not individuals• Link...
Jubilee + CARE Progress Report                                         Product SpecificationsNew feasibility study done in...
CRS – SILC in BeninBackground:  CRS formed Savings and Internal Lending Communities  (SILC)  SILC members requested that C...
CRS – Microinsurance in BeninBackground:=> Feasibility study on healthcare supply & demand in northern  Benin=> Feedback a...
Medical Insurance – CRS in BeninPremium and coverage period:  o $4.75 (2280 FCFA) per person for 12 monthsScope and benefi...
Life Insurance – CRS in BeninPremium and coverage period:  o $2.50 (1200 FCFA) per person for 12 monthsScope and benefit a...
Micro Ensure            Jubilee                            CRS Health                      CRS LifePremium        $2.85 (6...
What does it mean for members?                                    65 years and a mother of 8.                             ...
What have we learned in engaging withInsurance Companies? (CRS)Critical Assumptions:• Mutual healthcare services: unprofes...
What have we learned in engaging withInsurance Companies? (CRS)Risk Mitigation?• Payment in advance premium of 6 or 12 mon...
What have we learned in engaging withInsurance Companies? (CARE)Lessons• Important to clarify, document and agree upon the...
What have we learned in engaging withInsurance Companies? (CARE)Successes:• CARE has been able to take learning that occur...
What are the incentives for Jubilee to getinvolved with Savings Groups?  1. Management of risk - vulnerable to large     f...
What were the key considerations for afinancial institution when designing aproduct for Savings Groups?  –   Needs of the ...
Microinsurance and Savings Groups
Upcoming SlideShare
Loading in …5
×

Microinsurance and Savings Groups

743 views

Published on

Published in: Economy & Finance, Business
  • Be the first to comment

  • Be the first to like this

Microinsurance and Savings Groups

  1. 1. Microinsurance and Savings Groups Sybil Chidiac, CARE USA - Access Africa Jerome Dadjo, CRS Benin Patrick Kimathi, Jubilee Insurance Uganda
  2. 2. Savings groups and their purposeBuilds on traditional In 1991, CARE originated SGs in Nigerborrowing and lendingpractices to create self-sufficient savings and loansgroups• Rural outreach• Poverty outreach• Flexibility• Informal structure Products Offered in SGs: Globally over 5 million have FS at Savings their doorsteps through SGs Loans Insurance
  3. 3. What is the need for external insurance?1. CARE forged a partnership with MicroEnsure2. Collaborated on market research and identified a product3. Defined product specification that would cover the risks of VSLA membersWorldwide, MicroEnsure found the cost of a funeral to beprohibitively expensive and perilous for a family. In Tororo:• One VSLA had members earning an estimated $22.70 USD a month, yet they estimated funeral costs at approximately $136 USD.• Social fund in VSLAs too small to cover larger risks, providing $2.27 – $6.80 in relief, a paltry sum in comparison to the amount needed• This led many members to borrow as much as they could from the VSLA and then find the rest from family members, local lenders, etc• One VSLA had attempted to create their own funeral insurance product to combat this risk, but failed due to the limited pool of capital they were able to raise
  4. 4. CARE and MicroEnsurePremium• $2.85 (6000 UGX)Coverage Period• 12 months once entire premium paidCoverage• VSLA Member – $190• Spouse – $190• Four children (biological or legally adopted) – $48Eligibility• All family members insured and beneficiariesRestrictions• 18-65 years of age at time of purchase. Renewal up to 70 years old• Children must not be above 21 yrs of age
  5. 5. CARE and Financial LinkagesLinkage Guidelines (developed in 2008):• Client need identification• Build/ customize the product• Identify/ build distribution channels• Build capacity of distribution intermediaries• VSLA selection for linkage• Client awareness building• Monitoring and evaluation system for linkage• Development of protocols, internal control and MIS for managing linkage relationship
  6. 6. CARE and Financial LinkagesKey Principles of Linkages upheld (developed in 2008):• Groups are linked not individuals• Linkage is demand driven not supply driven• Core principle’s of VSLA methodology are upheld• Emphasis on member savings is maintained• Member savings are not held as collateral• Only mature groups are linked• Conservative savings to credit ratio is maintained
  7. 7. Jubilee + CARE Progress Report Product SpecificationsNew feasibility study done in Western Uganda. $13.60 (2 installments of $6.80) 12 months=>Identified needs – VSLA member/ spouse => $227 health, education, funeral expenses Up to 6 children (biological or legally and crop failure. adopted) => $ 136) each. Limitations: Within first 30 days – 25% of benefitTraining: Within 31st to 60th day – 50% of o Trained over 100 community benefit based trainers (CBT’s) Within 61st to 90th day – 75% of o Trained board members and benefit senior staff of implementing After 90 days – 100% of benefit partner organization. Member / Spouse – 18 to 65 years (renewal up to 70 years)In progress: Children - up to 23  Printing of program forms Self inflicted injury or suicide.  Opening up of MTN mobile money War and related risks. account.Note: No policies yet issued
  8. 8. CRS – SILC in BeninBackground: CRS formed Savings and Internal Lending Communities (SILC) SILC members requested that CRS transform their group into health mutual=> Investigation to understand why these persistent requests Literature review and informative visits to understand health mutual practices CRS Benin contacted 4 private insurance companies to offer microinsurance, then chose the best partner to collaborate with
  9. 9. CRS – Microinsurance in BeninBackground:=> Feasibility study on healthcare supply & demand in northern Benin=> Feedback and design of the microinsurance product with all stakeholders Informing the SILCs of the final product being offered, beginning pre-registration Preparing management tools, documents, contracts, and trainings for partners Insurance coverage will begin January 1st, 2012
  10. 10. Medical Insurance – CRS in BeninPremium and coverage period: o $4.75 (2280 FCFA) per person for 12 monthsScope and benefit amount: o Maximum $83.33 (40,000 FCFA) per person o Doctor visits covered 100%, operations and medication covered 70%Eligibility criteria: o Primary insurance holder must be a SILC member, his/her spouse and up to 6 children also covered
  11. 11. Life Insurance – CRS in BeninPremium and coverage period: o $2.50 (1200 FCFA) per person for 12 monthsScope and benefit amount: o $208.33 (100,000 FCFA) for incapacitating disability or deathEligibility criteria: o Primary insurance holder must be a SILC member, his/her spouse and up to 6 children also covered
  12. 12. Micro Ensure Jubilee CRS Health CRS LifePremium $2.85 (6000 UGX) $13.60 (2 installments of $6.80) $4.75 (2280 FCFA) $2.50 (1200 FCFA)Coverage 12 months once 12 months 12 months once entire 12 months once entirePeriod entire premium paid premium paid premium paidCoverage VSLA Member – VSLA member/ spouse => SILC member–$83.33 SILC member–$208.33 $190 $227 (40,000 FCFA) (100,000 FCFA) Spouse – $190 Up to 6 children (biological Spouse – $83.33 (40,000 Spouse – $208.33 Four children or legally adopted) => $ 136) FCFA (100,000 FCFA) (biological or each. Six children (biological or Six children (biological legally adopted) – Limitations: legally adopted) – $83.33 or legally adopted) – $48 Within first 30 days – 25% of (40,000 FCFA) $208.33 (100,000 benefit FCFA) Within 31st to 60th day – 50% of benefit Within 61st to 90th day – 75% of benefit After 90 days – 100% of benefitEligibility All family members Member / Spouse – 18 to 65 All family members insured All family members insured and years (renewal up to 70 and beneficiaries insured and beneficiaries years) beneficiaries Children - up to 23Restrictions 18-65 years of age Self inflicted injury or suicide. Principal insured party Principal insured party at time of War and related risks. must be a SILC member; must be a SILC purchase. Renewal spouse & children on the member; spouse & up to 70 years old same plan children on the same Children must not plan be above 21 yrs of age
  13. 13. What does it mean for members? 65 years and a mother of 8. Lost her husband in June 2010, Received a compensation equivalent to $181 USD Used to cater for funeral expenses Also kept aside $45 to deposit Anna Kibusse, member of on land to increase foodNangilisa VSLA Butalegja District production in order for her to provide food for her children.
  14. 14. What have we learned in engaging withInsurance Companies? (CRS)Critical Assumptions:• Mutual healthcare services: unprofessional, complicated, and heavily subsidized• Promising market for insurance companies based on mobile market example• NSIA is committed to lead and prepare the strategy for implementing the upcoming universal insurance system in West AfricaPotential Risks:• Health insurance is less profitable than others insurance services• Poor quality of healthcare services• Intensive strikes in public health centers• Frauds in health centers or driven by communities• Floods, disasters and risks• Change in government policies
  15. 15. What have we learned in engaging withInsurance Companies? (CRS)Risk Mitigation?• Payment in advance premium of 6 or 12 months• Mechanisms to combat fraud (prevention and detection) - contracts, compliance with treatment protocols prescribed by the government, management tools and healthcare procedures• Consultative and working group/committee meetings each quarter• Awareness and community education on their responsibilities• Dialogue with health authorities• Indivisibility of health micro-insurance (life and health insurance) (life more expensive but very profitable)• Strong graduated groups are targeted• Caritas to continue community mobilization
  16. 16. What have we learned in engaging withInsurance Companies? (CARE)Lessons• Important to clarify, document and agree upon the role of the implementing partner especially in marketing of the funeral insurance.• Group subscription rather individuals should be emphasized so as increase the number of beneficiaries and cost effectiveness• All premium payments to be done directly to the insurance company’s bank account to mitigate risks• Techniques need to be developed to empower CBTs for their training to VSLAs on the insurance product offered.
  17. 17. What have we learned in engaging withInsurance Companies? (CARE)Successes:• CARE has been able to take learning that occurs during implementation and work with ME to adjust the working document• CARE Uganda has review of the VSLA training manual and incorporated external micro insurance as one of the VSLA concepts• Fully incorporating the insurance products into the trainer’s capacity, training was designed for Field Officers on micro insurance marketing to ensure a clear understanding and interpretation of the policy.• First linkage for CARE between Insurance Company and VSLAs. Provided many lessons on taking such a linkage to other countries. Market research also brought in ideas for the next insurance product needed by VSLA members.• Opportunity: M-Pesa a definite method of premium payment that will be explored in the coming months. This will reduce costs for the premium holders and for MicroEnsure for premium payments and pay outs.
  18. 18. What are the incentives for Jubilee to getinvolved with Savings Groups? 1. Management of risk - vulnerable to large financial burdens e.g death. 2. Utilize existing structure to save costs. 3. Educated enough on financial matters and how to manage risks – from emergency fund.
  19. 19. What were the key considerations for afinancial institution when designing aproduct for Savings Groups? – Needs of the people and affordability. – Distribution channel. – General mortality / claims history.

×