MICROINSURANCE PRODUCTS Presentation at KfW/ISSSG Regional Symposium on Microinsurance Tbilisi, Georgia by Mosleh Uddin Ahmed FCA Independent Consultant 28th June 2005
MICROINSURANCE PRODUCTS � Several microinsurance products are available in the world today � Many researches and studies have been carried out by NGOs, MFIs and Donors in developing these products
MICROINSURANCE PRODUCTS � Many trials and errors have taken place � Attempts have been made to match the products to the assessed needs of the low-income households � Many new channels of delivery have been added
DELIVERY CHANNELS Existing and new channels of delivery for microinsurance products Insurance Cr. Unions MFIs Companies NGOs Self-help On-line & ATM Insurance Groups Agents Volunteers Health Workers Field Workers Employees Low-income Households Adopted from a presentation made by Dr. B Helms, CGAP
INTERESTED PARTIES Low-income Households Adopted from a presentation by Dr. B Helms, CGAP
RELATIVE COMPLEXITY OF MICROINSURANCE PRODUCTS MORE COMPLEX � Crop/Weather Insurance � Integrated Insurance Packages � Health/Disability Insurance � Annuities/Endowment � Property/Livestock Insurance � Personal Accident/Unemployment � Life Insurance MORE SIMPLE Adopted from a presentation by Craig Churchill
MICROINSURANCE PRODUCTS IN DIFFERENT COUNTRIES � � Life/Endowment Property/Asset/Livestock � India, Bangladesh, Sri Lanka, � India, Nepal, Bangladesh � East Africa Nepal, Vietnam, Pakistan, � Albania Indonesia, Laos, � East Africa, South Africa, West Africa � Funeral � Colombia, Guatemala, Mexico, Nicaragua � East Africa, South Africa, West Africa � Health/Critical Illness � Colombia, Mexico � India, Bangladesh, Philippines, � Integrated Package Cambodia, China � India � East Africa, South Africa, West Africa � Rural Insurance Schemes � Colombia, Mexico � India � Georgia, Russia � Group Personal Accident � Crop/Weather � West Africa � India � Unemployment � East Africa, North Africa � East Africa � Mexico, Nicaragua � Flood � East Africa � China
Vimo SEWA – INDIA an Integrated Insurance Package � SEWA offers three different integrated insurance packages � Covers death, sickness and loss of assets � Premiums are paid annually or through fixed deposit Marketing of SEWA Insurance through Outdoor Folk Theatre and some of the viewers Photo by courtesy of SEWA
Vimo SEWA – an Integrated Insurance Package SPECIAL BENEFITS FOR FIXED DEPOSIT PREMIUM MEMBERS (Eligible after 1 year of membership) � Maternity: US $ 6.90 � Dentures: US $ 13.80 � Hearing Aid: US $ 23.00 A member’s house destroyed by earthquake and its reconstruction by SEWA members Photo by courtesy of SEWA
RAINFALL INSURANCE – BASIX, INDIA With support from the World Bank, IFC, and ICICI Lombard, BASIX, an Indian MFI launched RAINFALL INSURANCE in Andhra Pradesh in India in July 2003 for its own borrowers; benefits indexed to rainfall � Pilot Year - 2003 � 1 district; 1 product; 230 policies sold; single phase of crop � Second year – 2004 � 3 districts; 10 products; 427 policies sold; 3 phases of crop A farmer in India waiting for rain; A group of Indian women preparing their land before the rain Photo by courtesy of BASIX
CROP INSURANCE – INDIA � National Agricultural Insurance Scheme operated by General Insurance Corporation of India on behalf of the government � Compulsory for farmers with crop financing; crop loss and loan amount covered � Premium according to crop and area; subsidised by the government Photo by courtesy of BASIX, India
INNOVATION IN DELIVERY CHANNEL ICICI Group, INDIA � Free ATM cards to poor factory workers � Free life/accident insurance � Over 100,000 accounts, but potentially millions � Joint-venture insurance company products can be bought online One of the1,900 ATM kiosks for use by cardholders – Photo by courtesy of Dr. B Helms
FLOOD INSURANCE A Government of PRC and People’s Insurance Company joint product � Mandatory for all residents in Yangtze River basin � Government pays 70% of premium, policy-holders pay 30%. � Capping on compensation Flooding in Yangtze River Basin - Photo by courtesy of WWF
DELTA LIFE INSURANCE COMPANY A PRIVATE INSURANCE COMPANY SERVING THE POOR IN BANGLADESH � Life insurance with savings; over 800,000 policyholders � Delivery through its own workforce; door to door collection of premium � Loan against policy; access to savings before maturity A Delta Life beneficiary in her Poultry Farm - Photo by courtesy of a Gono-Grameen Bima Manager, Delta Life
GRET – CAMBODIA � A insurer – provider model � Marketing by own staff � Primary healthcare by GRET field doctors � Hospitalisation in third- party hospitals � Cash compensation on death of insured Husband and wife team – both members of GRET – Photo by courtesy of SAO Cambodia
CARD MBA – PHILIPPINES � A Mutual Benefit Association - licensed to provide insurance � Three products � Life Insurance � Term Assurance (for loan redemption) � Provident Fund (long term savings) � Mandatory for all CARD members � Covers 600,000 low-income people A CARD MBA member – Photo by courtesy of CARD MBA
LIFE INSURANCE WITH FLEXIBILITY COLOMBIA � 50% payout for treatment in case policy- holder contracts incurable disease � After policyholder’s death � Child education expenses for 2 years � Medical expense/funeral cost of child � Monthly food vouchers � Public Service Payments
COMPREHENSIVE HEALTHCARE – MICROCARE UGANDA � A comprehensive healthcare product with ID card � Provides in-patient and out-patient treatment and prescription medicine � Several thousand policy holders � Started as a NGO; now a licensed Uganda insurance company A Microcare desk at a participating hospital - Photos by courtesy of MIRT
ANIDASO LIFE INSURANCE GEMINI LIFE INSURANCE COMPANY - GHANA � Life insurance with savings product � Delivery through a network of rural banks and savings & loans companies � Accident benefit and hospitalisation cash benefit being added Some of the policyholders - Photo by courtesy of Photoshare
PRE-PAID HEALTH CARD – AFYA Health Card with Photo ID in Kenya � Costs US$ 75 per person per year � Joint-venture project of 4 organisations � AAR Health Services provide healthcare; K- Rep Bank markets and lends cost of card � Covers out-patient and hospitalisation costs A K-Rep Bank customer and potential AFYA cardholder Photo by courtesy of K-Rep Bank
FUNERAL INSURANCE – SOUTH AFRICA � Funeral expenditure in 2004: US$ 760 Million; average per burial is over US$ 900.00 � Over 100,000 formal and informal insurance providers offer Funeral Insurance � Annual premium: between US$ 7.50 to $ 50.00 � Average Payout: between US$ 75.00 to $1,500.00 per burial A Funeral Parlour – Photo by courtesy of Microinsurance Centre
UNEMPLOYMENT INSURANCE OPPORTUNITY INTERNATIONAL BANK OF MALAWI � Launched in 2003 in conjunction with a local insurance company � Covers bank’s low-paid, full-time employed loan customers � Pays 3 months of loan repayment if borrower is made unemployed A fingerprint scanner in use at the bank’s counter - Photo by courtesy of IMPACT Newsletter
THE HORIZON OF MICROINSURANCE IS EXPANDING Rainfall Funeral Expenses Healthcare Personal Accident Fire Damage � Microinsurance Education Marriage Financial Services for the Poor Products Livestock Term Life Unemployment Crop Loss Credit Life Flood/Storm Damage Endowment/ Pension Adopted from a presentation by Dr. B Helms, CGAP
MICROINSURANCE PRODUCTS THANK YOU
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