role of donors in expanding inclusive insurance
TRANSCRIPT
8/14/2019 Role of Donors in Expanding Inclusive Insurance
http://slidepdf.com/reader/full/role-of-donors-in-expanding-inclusive-insurance 1/17
Role of Donors
in Expanding
Inclusive
Insurance
Carol Stewart
PSDI Coordinator , Timor Leste
Pacific Microfinance WeekNadi, Fiji, October 2013
8/14/2019 Role of Donors in Expanding Inclusive Insurance
http://slidepdf.com/reader/full/role-of-donors-in-expanding-inclusive-insurance 2/17
A Donor’s Perspective
SocialProtection
RiskManagement
EncouragingInvestment
Access toFinance
Securing AssetsInsurance
Credit Life
Securing
Collateral
Health
Natural
Disaster
Pensions
Workers
Compensation
Accident
Agricultural
Yield
Political
Risk
Title
Insurance
Bond
Guarantees
Construction
Fire
8/14/2019 Role of Donors in Expanding Inclusive Insurance
http://slidepdf.com/reader/full/role-of-donors-in-expanding-inclusive-insurance 3/17
The Stakeholders
Policy
Makers Regulators Risk
Carriers
Distribution
Channel
Client
• Businesses of all
sizes• Entrepreneurs
• Farmers
• Students
• Men & Women
• Families
• Communities
Sound Regulation, Valuable Products, Efficient Delivery, Inclusive Markets
Donors
8/14/2019 Role of Donors in Expanding Inclusive Insurance
http://slidepdf.com/reader/full/role-of-donors-in-expanding-inclusive-insurance 4/17
The Role of Donors
Understandingthe Market
• Identify keyconstraints
•Demandresearch: clientneeds +willingness topay
EnablingEnvironment
•Build regulatorycapacity
•Training forinsurers andintermediaries
•Financialliteracy andcustomerawareness.
PartnerFormation
•Risk carrier +
distributionchannel
• Innovativemodels
•Public privatepartnerships
Product Design
•Addressactuarial dataconstraints
•Provideexpertise forproduct design
• Imbed KPIs forclient value
KnowledgePortal
•Monitoring &Evaluation
•Developing andsharing toolsand bestpractices
•Capacitybuilding
Promoting inclusive market growth
8/14/2019 Role of Donors in Expanding Inclusive Insurance
http://slidepdf.com/reader/full/role-of-donors-in-expanding-inclusive-insurance 5/17
Understand the Market
Nascent: Few MI
products, Mainly CreditLife
•Lack of data
•Limited skills
•Low interest
•Low client awareness,trust
•Regulatory barriers
Growing: Simple
products are scaled up•Distribution channelinnovation needed
•Improve products forgreater client value
•Build client awarenessand experience
Diversifying: More
complex products aredeveloped
•New skills needed byprovider
•Business case and PPPs
•Need for client protectionmechanisms and robustsupervision
Competitive: Clients
have a choice ofproducts and providers
Timor Leste
PNG
Fiji
Ghana
Philippine
Brazil
India
Mexico
South Africa
Nigeria
Tanzania
Vietnam
Phases and Challenges
Adapted from ILO Microinsurance Innovation Facility, Webinar on “Developing inclusive insurance markets”
Going beyond traditional markets
8/14/2019 Role of Donors in Expanding Inclusive Insurance
http://slidepdf.com/reader/full/role-of-donors-in-expanding-inclusive-insurance 6/17
Understand the Market
Supply Side
ConstraintsWho can
underwrite?
Who can
distribute?What is their
capacity?
What are their
interests?
Role of
technology?
Market
DemandWhat are the
significant risks?How can
insurance play
a role?
What‟s affordable?
Identifying barriers and unlocking potential
Regulatory
Considerations Allowable
distribution
channels?Reporting
requirements?
Licensing
requirements?
Consumer
Protection
8/14/2019 Role of Donors in Expanding Inclusive Insurance
http://slidepdf.com/reader/full/role-of-donors-in-expanding-inclusive-insurance 7/17
Regulatory
Considerations Allowable
distribution
channels?Reporting
requirements?
Licensing
requirements?
Consumer
Protection
Understand the Market
Supply Side
ConstraintsWho can
underwrite?
Who can
distribute?What is their
capacity?
What are their
interests?
Role of
technology?
Identifying barriers and unlocking potential
8/14/2019 Role of Donors in Expanding Inclusive Insurance
http://slidepdf.com/reader/full/role-of-donors-in-expanding-inclusive-insurance 8/17
Understand the Market
Regulatory
Considerations Allowable
distribution
channels?Reporting
requirements?
Licensing
requirements?
Consumer
Protection
Identifying barriers and unlocking potential
8/14/2019 Role of Donors in Expanding Inclusive Insurance
http://slidepdf.com/reader/full/role-of-donors-in-expanding-inclusive-insurance 9/17
8/14/2019 Role of Donors in Expanding Inclusive Insurance
http://slidepdf.com/reader/full/role-of-donors-in-expanding-inclusive-insurance 10/17
Promote an Enabling Environment
• Drawing on international standards and good practice:1. Ensure a sound framework based on Insurance Core Principles
2. Promote a risk based approach to supervision to enable ‘safe’
experimentation for inclusive approaches
Training in
Reinsurance
Training in Risk
Based
Supervision
Assistance to
develop
model
regulations /
guidelines for
expansion of
inclusive
insurance.
Integrate
„Inclusive
Insurance‟ with
the NationalFinancial
Inclusion Strategy
8/14/2019 Role of Donors in Expanding Inclusive Insurance
http://slidepdf.com/reader/full/role-of-donors-in-expanding-inclusive-insurance 11/17
Trust and Access Barrier
Catalyze Partner Formation
Credit
Unions
Scratch-
Cards
Field
workers
Churches
Online
Service
Providers
Self-help
groups
Banks
NGOs
Insurance
Agents
MFIs
Mobile
Phones
Retailers
Brokers
Health
workers
Volunteers
8/14/2019 Role of Donors in Expanding Inclusive Insurance
http://slidepdf.com/reader/full/role-of-donors-in-expanding-inclusive-insurance 12/17
Catalyze Partner Formation
1. Leverage existing structures rather than
creating new ones.
2. Assess institutional capacity and ensure
underwriting risk carried by competent partner
3. Encourage innovation and promote distribution
models that can effectively reach the ‘last mile’
4. Assist with training and capacity building whereneeded
8/14/2019 Role of Donors in Expanding Inclusive Insurance
http://slidepdf.com/reader/full/role-of-donors-in-expanding-inclusive-insurance 13/17
8/14/2019 Role of Donors in Expanding Inclusive Insurance
http://slidepdf.com/reader/full/role-of-donors-in-expanding-inclusive-insurance 14/17
Assess Results and Build Knowledge
Category Indicator
Product awareness &
client satisfaction
Coverage Ratio
Growth Ratio
Renewal Ratio
Service quality Promptness of Claims Settlement
Claims Rejection Ratio
Product value
Incurred Expense Ratio
Incurred Claims Ratio
Net Income Ratio
Financial prudence Solvency Ratio
Liquidity Ratio
8/14/2019 Role of Donors in Expanding Inclusive Insurance
http://slidepdf.com/reader/full/role-of-donors-in-expanding-inclusive-insurance 15/17
Provide Tools
Understandingthe Market
• Guidelines forMarketResearch on theDemand forMicroinsurance
• BusinessPlanning forMicroinsurance
Regulation
• IAIS InsuranceCore Principles
• Access toInsuranceInitiative (a2ii)Toolkit
• Issues in theRegulation and
Supervision ofMicroinsurance
PartnershipFormation
• ManagingMicroinsurancePartnerships:Handbook
• Partnership AssessmentQuestionnaire
Product Design
• Improving CreditLifeMicroinsurance
• HealthMicroinsuranceSchemes:Feasibility StudyGuide
Assessing Value
• Financial KPIsforMicroinsurance
• Social KPIs forMicroinsurance
• How to conducta PACE clientvalue
assessment
General Resources
• Suggested Microinsurance Reading List
• Microinsurance Innovation Facility Resources
• CGAPs Microinsurance Web Resource Guide
8/14/2019 Role of Donors in Expanding Inclusive Insurance
http://slidepdf.com/reader/full/role-of-donors-in-expanding-inclusive-insurance 16/17
Thoughts in closing
• Insurance as part of a greater financial inclusion andmarket development strategy
• Microinsurance sector development should not
precede insurance sector development.
• Can’t expect quick results: assist in phases, withdraw
assistance in phases
• Overcoming the trust barrier requires innovation in
business models• PPPs may be a good option for scaling products in
countries with small populations
8/14/2019 Role of Donors in Expanding Inclusive Insurance
http://slidepdf.com/reader/full/role-of-donors-in-expanding-inclusive-insurance 17/17
Thank you.
More information contact :
Pacific Liaison and Coordination Officewww.adb.org/offices/pacific/main