1. 2010 RBAP‐MABS Regional Roundtable Conference
Pan Pacific Hotel, Malate, Manila
November 23, 2010

3. Micro insurance Providers
Insurance and insurance-like providers
 Life and Non-life Insurance Companies
 Cooperative Insurance Societies (CIS)
 Insurance/Service Cooperatives
 Mutual Benefit Associations (MBAs)
 Preneed Companies
 Health Maintenance Organizations (HMOs)
Intermediaries
- entities or individuals such as brokers and agents
- facilitate provision of insurance services by licensed insurance providers
 Brokers act on behalf of the clients in the purchase of insurance products
 Agents act on behalf of the insurance companies in the solicitation of insurance
business

4. Managing Micro insurance Products and Partners
The Intermediary Model
Risk Carrier
• Insurance Company
• Reinsurance Company
• Cell Captive
Front Office Back Office
• MFIs, • Systems – Data Capture/
• Rural Banks Reporting
• Aid Agencies • TPA – Claims Servicing
• NGOs • Product Design/Negotiation
• Retail • Training and Education

5. Managing Micro insurance Products and Partners
The Intermediary Model
MICROENSURE AS AN INTERMEDIARY
 Negotiates with insurance companies on behalf of clients to keep premiums to a minimum
 Aim is to achieve sustainability for insurance companies, product distributors, and clients
Effective Product Distribution
 Workin partnership with organizations that are currently serving the poor such as
microfinance organizations, rural banks, as well as humanitarian organizations that are
providing non-financial services
Sophisticated MIS system / Back Office Processing
 Key to minimizing the cost of micro insurance
 Tracks details of clients covered, collects premiums and administers claims.
Extensive market research and insurance expertise
 Products designs that address the real financial risk management needs of
the poor

6. Establishing Partnership to Micro insurance Provider
Important Factors:
1. Products and Product Development
 an insurance provider that
 Can understand the needs of the clients.
 Can understand operational realty of the Bank
 Should be able to design a product that is more suitable for all
parties
2. Transaction cost
 Management Information System for transacting insurance
business
 An insurance provider/intermediary that benefits from a wider
client bases and global reach can fund such an overhead
 Investment in system reduces transaction cost
 Operating efficiencies

7. Establishing Partnership to Micro insurance Provider
Important Factors:
3. Administration
 best equip to handle administration relating to claims
processing
4. Additional channel of sale
5. Staff training and Client Education
6. Range of Sustainable Product
7. Distribution Network/Linkages
8. Technological Enhancement
9. Expertise and experience in insurance and microfinance
10. Required no capital outlay on the part of bank

8. Innovations: Micro insurance promotion and service delivery
 A critical component inManagement System
Automated Insurance the timely and cost effective
provision of micro insurance services to Rural Banks and
MFIs
 A state-of-the-art technology that specializes in the
following:
 Data encoding
 Large volume data processing
 Data Management
 Insurance Claims Processing
 Data Synchronization
 Automated Reports

9. Marketing Micro insurance Services
 Identify target market
 Determine the main messages to convey
 Protection
 Solidarity
 Optimism
 Trust
Three Step marketing Process
Raise awareness Cultivate an
- About insurance understanding of Activate the
- About a specific insurance (costs market
insurer/intermediary and benefits
Source: Protecting the Poor, A Micro insurance Compendium edited by Craig
Churchill

10. Marketing Micro insurance Services
A major hurdle for marketing insurance to the poor is the lack of differentiation
between microinsurance and conventional insurance products
Client education
 designed to promote understanding of the options for managing risk
 explain the fundamental concepts underlying insurance and the terms that
define it so that the poor can determine what is the most suitable option in
their particular case
Development of comic books in clients' local languages
 provide an understanding of insurance in an informative and easily
understandable format.
Materials are the result of in-depth research into client understanding and
attitudes concerning insurance

11. Comparison between Commercial Insurance and Microinsurance
Source: Adapted from Almazan (2005)
Commercial Insurance Microinsurance
Those who have the capacity to Those who do not have the
pay large sums of money as capacity to pay large sums as
premium premium.
TARGET GROUP
Those who are costly to serve due
to socio-economic status,
location, and the like.
MOTIVE Profit Solidarity and Mutual Aid
Profit menu is varied and complex Product menu is limited and
aimed at individuals simple, aimed at the whole family
PRODUCT/SERVICES of the member
Highly Restrictive Limited or no restrictions
For profit, stock corporations Mutual Benefit Associations,
DELIVERY SYSTEM cooperatives & other forms of
mutual aid organization
OWNERSHIP Proprietors; stockholders Membership-based
Proprietors; stockholders, Democratic; regardless of share
DECISION MAKING depending on voter’s rights capital or size of contribution,
“one person-one vote”
Return on investments and Return on share capital,
dividend patronage refund as in
SURPLUS cooperative, and membership
equity value for MBAs.

12. Microinsurance Delivery Models
Institutional Options Description Advantages Challenges
Partner-Agent Model An established insurance Insurer is able to reach a Trained staff to explain
company works with a market it cannot reach on insurance in ways the
distribution channel. its own illiterate poor can
e.g., MFI, that actively MFI can provide members understand
serves low-income clients with better services at The distribution channel
Insurers bear the risk lower risk must still be licensed as an
The poor get valuable agent
protection that otherwise
would not be accessible to
them
Mutuality Model Savings and credit Helps monitor moral Capacity Issues
cooperatives or credit hazard
unions offer loan Reduces transactions cost
protection insurance Remains responsive to
clients’ needs and interest
Direct Sales Model Insurance companies Helps overcome control Higher costs of a new
directly serve low-income problems in the partner- delivery structure that only
clients through individual agent and mutual models serves an insurance
agents on salary or function
commission-basis
Community-based Model Non-profit schemes that Reaches not only the poor Sustainability
have voluntary membership but also more of the
Policy holders pre-pay poorest
premiums into a fund and
are entitled to specified
benefits
Technical Assistance and
general oversight are given
by a network support
organization

13. The Intermediary Model
An intermediary could be a corporate or individual partnership
structure working on either a local or global scale partnering with
a risk carrier (most likely an insurance company). The intermediary
could be an agent on behalf of a single insurance company or a
broker and work for multiple insurers it is most likely that the
intermediary would seek to service large groups of clients.
Value Added Service:
Additional Channel of Sale- without systems, MFIs are often unable
to offer insurance products to their clients outside of the loan. An
intermediary brings the capability to track clients and record who has
paid premiums even when a loan is not in force.
Staff Training- an intermediary is well placed to provide
organizations' staff with training in the product and the basics of
insurance. This increases financial literacy and ultimately client
satisfaction.

14. Innovative insurance products:
 Security/insurance for the entire family
 Loan redemption
- fire and calamity assistance
- unemployment insurance
- daily hospital income benefit
 Micro housing insurance
- fire, lightning, typhoon, flood, earthquake, volcanic eruption, landslide)
- evacuation assistance and family personal accident insurance
 Protection to micro entrepreneurs and their tools of trade
- property insurance
- burglary/housebreaking
- personal accident insurance
- money, securities and payroll
- electronic equipment insurance
- fidelity guarantee
 Climate responsive index products
- weather index based crop insurance for drought/dry spell, excess rain, and typhoon wind speed

15. Micro Insure Linkages
Banks, MFI's, Cooperatives & Credit Unions‘ Church Groups & Networks
Humanitarian Aid & Child Sponsorship Major Donor Groups
Social Aggregators Microfinance intermediaries
Global Health Care Providers Academic & Government Institutions
Professional Service Providers
Aid Agencies
Foundations
Cell Captive facility Bill and Melinda Gates
Foundation
Levi Strauss
Government Partners Foundation
PAGASA
Department of
MicroEnsure
Agriculture
BPRE Reinsurance
AIMS
EMBU
Linkages in
Actuarial Presence in Opportunity
Consultancies other International
- Delloite and Touche Countries

16. Synergy Framework
Group of Companies MicroEnsure
Product Development
Unified Marketing
Church Rural
MFI COOPs NGO Others
Org. Bank
Insured Insured Insured Insured Insured Insured Insured

17. Value Added Service SERVICES:
“Enterprise Development Model” • Training
COMMUNITY BASE
• Capacity & Capability Building
SOCIAL PREPARATION • Value Formation
• Establishment of Systems & Procedure
Sales & Promotions
Outlet Creation TRAINING & • Agricultural
INSTITUTIONAL Production (rice)
Networking/
DEV’T
Linkaging a. Pre-production
MARK
ETING
AL SERVICES:
DEVEL
OPME FINANCI
SERVICES:
Marketing Development
NT
MFI ASSISTAN
CE • Technology Transfer
• Farm Equipment & Machinery Loan
• Production Loan
and Assistance • Irrigation Development
• Crop Insurance
SERVICES:
SERVICES: • Post-harvest Equipment Loan
• Business Advisory • Intro of Post-harvest • Training & Skills Dev’t.
Enterprise Facilities
• Enterprise Dev’t. & Mktg. • Quedan System Loan
Creation • Skills & Mgt. Dev’t. • Warehousing
• Product Dev’t. & Packages and Promotion • Intermediate Storage • Rice Mill
• Laboratory Analysis & Bonded Warehousing • Solar/Mechanical Drying

18. THANK YO U
MICROENSURE PHILIPPINES
Website: www.microensure.com
Email: william.mar4rez@microensure.com
Phone: (033) 329 0729; (033) 320 0387
(02) 893 9752