1
ADB’s Support for Emerging
Microinsurance under JFPR9118:
“Developing Microinsurance in PHI”
Hiroyuki Aoki
Senior Financ...
2
Outline
 Introduction – What is a Microinsurance?
 Past ADB’s Supports for Microfinance in the
Philippines
 JFPR9118:...
3
Introduction
What is a Microinsurance?
4
What is a Microinsurance?
 General Understanding: “Insurance service for the
Poor”
 One of Financial Services for the ...
5
What is a Microinsurance?
 Assumption: Microinsurance is the insurance
service to accommodate the cash flows of the
Poo...
6
What is a Microinsurance?
Challenge: How can we manage various
stakeholders under various constraints?
 Policy makers
...
7
Past ADB’s Supports for Microfinance
in the Philippines
8
ADB Microfinance Development
Strategy in 2000
 Goal
 To ensure permanent access to institutional financial
services fo...
9
Philippine Microfinance Strategy
 Approach
 Increased role of the private sector
 Government to focus on establishing...
10
Past ADB Supports for Microfinance
 Microfinance Development Program
(2005-2007)
 A program loan that called for furt...
11
JFPR9118:
Developing Microinsurance
in PHI
12
Why Microinsurance Development?
 Past projects mostly address the savings and
credit needs of the poor
 With sustaina...
13
JFPR9118: Developing MI in PHI
 Four-year grant project with the following
three components (2008-2012)
 Component 1:...
14
What are the progress?
 Component 1:
Improving Regulatory Framework for
Microinsurance
 The Microinsurance Regulatory...
15
What are the progress?
 Component 2:
Strengthening the Capacity of Government
regulators and Microinsurance Providers
...
16
What are the progress?
 Component 3:
Promoting Financial Literacy on
Microinsurance
 The Materials for Financial Lite...
17
What We Achieved
18
Formalization of Microinsurance Sector
 Approval and Launch of the Regulatory
Framework for Microinsurance
 Revised R...
19
Market Development of Microinsurance
 Product Development
More variety of products from life and non-life,
not just a ...
20
Some Thoughts for Next Steps
THANK YOU!
Hiroyuki Aoki
Senior Financial Sector Specialist,
SERD/SEPF
haoki@adb.org
Upcoming SlideShare
Loading in …5
×

ADB's support for Emerging Microinsurance under JFPR9118: “Developing Microinsurance in PHI”

617 views

Published on

This presentation was delivered by Mr Hiroyuki Aoki (Senior Financial Sector Specialist-SERD/ SEPF at Asian Development Bank, The Philippines) at the ICMIF-AOA Development Network Seminar (18-20 September 2013; Manila, The Philippines)

Published in: Economy & Finance, Business
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
617
On SlideShare
0
From Embeds
0
Number of Embeds
231
Actions
Shares
0
Downloads
13
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide
  • Financial Services, who pays for services? Usually beneficiaries.The person send money and he/she pays for that service.Social Welfare, Social Protection? Who pays? Beneficiaries? Why not government?Who is the owner of program? Government policy?Agro? There is the same issue with the above.
  • Small amount of premium-Small coverage-More frequent installment, weekly even daily like sachets for shampoo or detergent available at Sari-sari store. Which is cheaper, bottle of shampoo or sachet?But microinsurance premium is not cheap, the price for the risk should be the same.Even expensive based on simplified underwriting.Usually unit cost of sachet is more expensive than that of bottle.Microinsurance is not exclusive for the Poor. The Rich will be coming in if it is cheap!New technology-Premium consists of pure risk premium plus administration costs or transaction costsThe target should be admin/transaction costs.Government subsidy-Of course, subsidy will make microinsurance products affordable. Then how can we justify? How can we limit the beneficiaries? So many issues!
  • At this moment, no definite solution.We can not just leave it to the market.National strategy based on consultative process may be a solution.Strategy is a tool for coordinated efforts, not objective.Improve transparency in the sector developmentStrategy can be revised from time to time based on the development
  • ADB's support for Emerging Microinsurance under JFPR9118: “Developing Microinsurance in PHI”

    1. 1. 1 ADB’s Support for Emerging Microinsurance under JFPR9118: “Developing Microinsurance in PHI” Hiroyuki Aoki Senior Financial Sector Specialist, SERD/SEPF Asian Development Bank ICMIF-AOA Development Network Seminar 20 September 2013 Manila, Philippines
    2. 2. 2 Outline  Introduction – What is a Microinsurance?  Past ADB’s Supports for Microfinance in the Philippines  JFPR9118: Developing Microinsurance in PHI  What We Achieved  Some Thoughts for Next Steps
    3. 3. 3 Introduction What is a Microinsurance?
    4. 4. 4 What is a Microinsurance?  General Understanding: “Insurance service for the Poor”  One of Financial Services for the Poor?  The Poor needs risk protection measures in addition to credit, saving, remittance and payment services.  A Tool for Social Welfare or Social Protection?  Health/medical insurance for complementary to public health system, or alternative in some countries  Agro/Crop Insurance for the Farmers?  Because the farmers are poor!
    5. 5. 5 What is a Microinsurance?  Assumption: Microinsurance is the insurance service to accommodate the cash flows of the Poor (sometimes called “affordability”).  Small Amount of Premium?  Small policies means many transactions with small amounts.  New Technology to Reduce the Costs?  Mobile banking, e-payment or Paperless Policies, etc  Government Subsidy?  Typical for Agro/Crop Products
    6. 6. 6 What is a Microinsurance? Challenge: How can we manage various stakeholders under various constraints?  Policy makers  Regulators/Supervisors  Other Government Agencies  Microinsurance Providers/Distributors  Beneficiaries  Communities/Local Governments  Development Partners We need some common understanding!!!
    7. 7. 7 Past ADB’s Supports for Microfinance in the Philippines
    8. 8. 8 ADB Microfinance Development Strategy in 2000  Goal  To ensure permanent access to institutional financial services for the majority of poor and low income households and their microenterprises through the development of sustainable microfinance systems  Definition of “Microfinance”  Broad range of financial services such as deposits, loans, payment services, money transfers and insurance to poor and low income households and their microenterprises
    9. 9. 9 Philippine Microfinance Strategy  Approach  Increased role of the private sector  Government to focus on establishing the enabling policy and regulatory environment  Adoption of market oriented financial and credit policies  Non-participation of government line agencies in implementing credit programs
    10. 10. 10 Past ADB Supports for Microfinance  Microfinance Development Program (2005-2007)  A program loan that called for further development of the microfinance sector through the strengthening of the microfinance policy environment, improvement of regulatory capacity, MFI capacity, and financial literacy  JFPR9088: Developing Financial Cooperatives (2006-2010)  Support to the MDP program loan above  Assisted the Government in further improving the regulatory environment for credit and savings cooperatives engaged in microfinance services.
    11. 11. 11 JFPR9118: Developing Microinsurance in PHI
    12. 12. 12 Why Microinsurance Development?  Past projects mostly address the savings and credit needs of the poor  With sustainable access to savings and credit services, both MFIs and government recognized the need for risk protection  Low income households need insurance to address their risk protection  Then, the need to develop the Philippine Microinsurance Industry
    13. 13. 13 JFPR9118: Developing MI in PHI  Four-year grant project with the following three components (2008-2012)  Component 1: Improving Regulatory Framework for Microinsurance  Component 2: Strengthening the Capacity of Government regulators and Microinsurance Providers  Component 3: Promoting Financial Literacy on Microinsurance
    14. 14. 14 What are the progress?  Component 1: Improving Regulatory Framework for Microinsurance  The Microinsurance Regulatory Framework was prepared in 2009  The Performance Standards (PS) “SEGURO” for Microinsurance was developed in 2010 S for Solvency, E for Efficiency, G for Governance, U for Understanding of Product by Clients, R for Risk Based Capital and O for Outreach
    15. 15. 15 What are the progress?  Component 2: Strengthening the Capacity of Government regulators and Microinsurance Providers  The Module and Training Program on the Performance Standards were developed and implemented for both Regulators and Microinsurance Providers in 2011/2012
    16. 16. 16 What are the progress?  Component 3: Promoting Financial Literacy on Microinsurance  The Materials for Financial Literacy Campaign was developed in 2009  Regional Financial Literacy Roadshow has been implemented in 2011/2012
    17. 17. 17 What We Achieved
    18. 18. 18 Formalization of Microinsurance Sector  Approval and Launch of the Regulatory Framework for Microinsurance  Revised Regulation on Microisnrance Products  Formalization of Informal Microinsurance Schemes  Training and Licensing of Agents  Insurance Commission has got the ability and responsibility to monitor the Microinsurance Industry and related reliable statistics became available!
    19. 19. 19 Market Development of Microinsurance  Product Development More variety of products from life and non-life, not just a credit life product (about 60 products in 2011, 40 life and 20 non-life)  Product Providers New entries from insurance industry and diverse players in the market, MBAs, Cooperatives and Insurance Companies (44 providers in 2011, 17 MBAs, 2 Coops and 25 Insurance Companies)  Outreach 3.5 million policies were issued in 2011 26.7 million of population out of 90 million are below poverty line. Well above 10% coverage for the Poor.
    20. 20. 20 Some Thoughts for Next Steps
    21. 21. THANK YOU! Hiroyuki Aoki Senior Financial Sector Specialist, SERD/SEPF haoki@adb.org

    ×