Developing,Marke0ng,andManagingMicro‐InsuranceProductsandPartners

ReggieOcampo

FirstMacroBank

2010RBAP‐MABSNa.onalRoundtableConferenceHya=HotelandCasino,ManilaJune3,2010

June2006–November2007

1stInsurerScheduleofIndemnity:AccidentalDeathandPermanentDisablement: 50,000UnprovokedMurder&Assault: 25,000DeathDuetoSickness 5,000DeathDuetootherCauses 10,000

Hospitaliza.onBenefit:DailyHospitalBenefit 70perdayMax.of183days.Minimumof3days

SurgicalBenefit 750Miscellaneous 350

Premium:160fortheperiodof6monthsInsured:MemberOnly

Dec.2007–August20092ndInsurer

ScheduleofIndemnity: PersonalAccidentalDeathBurial Hospital

AndPermanentDisability Assistance Benefit

Client 25,000 5,000 50/Day

Spouse 12,5005,00050/Day

DependentChild 6,2505,00050/Day

ParentsofaSingle6,2505,00050/DayBorrower Max.of15days

perillness

Premium:160fortheperiodofsixmonths

ChallengesEncounteredfromthefirsttwoInsuranceProvider

•  LowRateofClaimsleadingclientsnottobelieveintheinsurancecoverageanymore.

•  Clientswhohadapprovedclaimsinthehospitaliza.onbenefitfelttheamountistoosmall.(Some.mescostoftravellingbackandforthfromclientshousetothehospitalishigherthantheamountpaidbytheinsurerperday.)

•  Clientscomplainthattheycannotfeeltheinsurancebenefit.•  Toomanyexclusionsleadingtoverylowrateinapprovalofclaims.

•  Resultofclaimstakesalongto.metoknow•  LackstrainingtofieldstaffleadingtoconfusionregardingInsurancePolicythatresultstomisunderstandingwithclients.

ClaimsfortheYear2008&2009

Year TotalNumberofClaims

ApprovedClaims

TypeofClaim AmountofClaim

AmountofPremiumCollected

2008 5 1 Hospitaliza.on 200 645,560

2009 9 4 LossofLifeandHospitaliza.on

36,600 273,950

Total 14 5 36,800 919,240

WhatisSuccessinMicroinsurance?

•  Insurers– Profitability– Expansionofriskpoolandmarket

•  Deliverychannels– Addi.onalincomestream– Compe..veadvantages– Morestableclients/members

•  Low‐incomemarket– Affordable,accessible,responsiveproductsthathelpreducerisk

Considera0onsinchoosinganInsurerpartner

a)  Aretheystable,sound,andprofitable?–  Howlonghavetheybeeninbusiness?–  Whoaretheboardofdirectors?–  Reviewannualreportsandcompanyprofile

b)  Aretheycompliantwithregula0ons?–  Doestheirstatusfityourneeds(lifeornon‐life)?

c)  Aretheyflexible?–  Willtheyaccommodateclients’needs?–  Isthereevidenceofinnova.on?

d)  Istheirpricingappropriatetothemarket?

Considera0onsinchoosinganInsurerPartner(Con0nua0on)

e)Whatistheirstaffprofile?‐  Dotheyunderstandthemarketofmicrofinance?

f)Whatistheirclaimsreputa0on?‐  Areclaimspaidquickly?‐  Aretheirclaimsproceduresreasonable?

h)Capacity‐  Dotheyhaveexcesscapacityforthedevelopment

andmanagementofmicrofinanceins.tu.on?‐  DotheyusemanualorITsystems?

FactorsinMicroinsurancePurchases

•  Understandingofinsurance– Knowledgewillmakeclientappreciatetheproductandmaketheclientknowwhatheispayingfor

– Createaposi.vepercep.onwithinsurance•  ProductDesign– Willtheproductservetheclientneed?– Isitaffordable?– Isiteasytounderstand?

Transi.ontoMicroEnsure

•  SignedMOUwithMicroEnsureJanuary2009

• WhattooktheInterestofFMBisthattheinsurancepremiumhavelesserexclusionsandsimplicityoftheprocessingofclaims.

•  KeypersonsfromFMBandMicroEnsurehaveseveralmee.ngstodesigntheInsurancePackage,aswellasthepriceofpremium.

September2009toPresent

Insurer:GrepalifeIntermediary:MicroEnsurePhilippinesScheduleofIndemnity: LossofLifeFuneralTotalClient 40,000 10,00050,000Spouse 20,00010,00030,000DependentChild/ 10,0005,00015,000SiblingParentsofaSingle 10,0005,00015,000Borrower

Premium:370fortheperiodofsixmonths

OtherFeatures:•  Allcauseofdeathisen.tledforFuneralAssistanceBenefit•  AdvanceFuneralBenefit(1dayprocessing)•  Contestabilityperiodisfor12months.Ajercontestabilityperiod,anycauseofdeathwillbe

covered

AddedServicesProvidedbyMicroEnsure

•  Promo.onalMaterials(e.g.ComicstellingthebenefitsofMicroInsuranceandbenefitsofbeingaclientofaRuralBank)

•  TrainingofBankStaff

StatusofClaimsinMicroEnsure

Year TotalNumberofClaims

ApprovedClaims

TypeofClaim AmountofClaim

AmountofPremiumCollected

2009 1 1 LossofLifeOftheclient

50,000214,875

2010 3 3 2LossofLifeofdependent1Lossoflifeofamember

20,000 240,375

Total 4 4 70,000 455,250

THANKYOU!