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RBAP-MABS shares Philippine experiences at conference in Singapore

RBAPMABS.com, 24 August 2010

Rural Bankers Association of the Philippines (RBAP) - Microenterprise Access to Banking Services (MABS) Microinsurance Coordinator Ruth Aseron shared the experiences of rural banks and their insurance partners in microinsurance distribution at the Microinsurance Asian Summit held in Singapore and organised by Hanson Wade.

A significant interest of participants at the event was the potential convergence of rural banks’ mobile phone banking  and microinsurance services to facilitate cost-efficient payment, administration and claims while partnering with private insurance companies in order to increase access and reduce the costs of managing small accounts.

Secretary General Yoshi Kawai of the International Association of Insurance Supervisors (IAIS) opened the 2-day conference with a discussion on the G20 Initiatives on microinsurance and the significance of developing relevant policies and regulations founded on financial inclusion and poverty alleviation. This established the theme of the conference as speakers evinced social entrepreneurship with discussions on sustainability of microinsurance products balanced with addressing risk protection needs of the "middle poor" or "mass market".

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Microinsurance product ImpelCARE wins contest

i-NewsWire, 23 August 2010

PK4 Software Technologies, a Bangalore based Software-as-a-Service (SaaS) company has been selected as a winner in NASSCOM’s AppFAME contest for its hand-held rural healthcare and microinsurance application 'ImpelCARE'.

Winning in the enterprise app category, this hand-held-based tele-medicine and microinsurance application is administered by Village Health Champions (VHCs) – women from local villages who are familiar with customs and people have been trained to use its simple local-language interface, while doctors and clinicians use either an English version of the same thing or a deeper web-based SaaS equivalent.

The hand-held device helps VHCs track patient info, provide primary healthcare, record vital statistics and deliver health-related products. The built-in Clinical Decision Support System delivers appropriate medical advice, prescriptions and, where it cannot, direction to invoke tele-medicine.

Working with CARE Foundation and other stakeholders, ImpelCARE uses technological innovation to provide high-quality healthcare services to patients in remote villages, simultaneously keeping costs low. The VHC can interact with a remote CARE doctor who can recommend treatment through an SMS prescription. The VHC also collects microinsurance premiums and records them on the hand-held terminal.

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Microinsurance proving popular in Mexico

Artemis, 21 August 2010

The Mexican Insurance Association (AMIS) has been working on a microinsurance pilot in collaboration with a government agency called Pronafim (National Program for Microfinance). So far, in excess of 50,000 microinsurance life policies have been sold which represents great market penetration for a new type of product.

The next phase of the pilot project will see the product broadened to include P&C (including weather index insurance) and health microinsurance products. They intend to see 200,000 policies more in the next few months, ambitious but if achieved it will make Mexico one of the biggest microinsurance markets in the world.

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IRDA chief asks insurers to focus on rural India

Financial Express, 23 August 2010

It is high time that insurance companies should focus more on bringing out products which completely meet the needs of those in the rural poor/below poverty strata, including their needs, aspirations and meets the risks attached to it. Otherwise it will be very difficult for the insurance sector to grow fast, said J Hari Narayanan, chairman, Insurance Regulatory and Development Authority (IRDA).

Hari Narayanan, who was in Chennai to launch India’s first health plus life insurance combi product, jointly developed by Star Health and Allied Insurance Company and Shriram Life Insurance Company, said, despite insurance companies have options to jointly develop products which meet the aspirations of millions of rural poor India, there is hardly any products to count till date.

The microinsurance programme has been designed to meet such aspirations. The products should have a combination of life and non-life features and should meet the all the requirements of poor people. Both life and non-life companies should come forward to jointly develop such products and unless it is very difficult for the industry to grow, he pointed out.

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Success of microinsurance pilot project in Thailand

Artemis, 20 August 2010

Sompo Japan has been trailing a weather risk microinsurance product in a region of Thailand since January this year. The pilot project saw weather index insurance for drought sold in Khon Kaen province in Northeast Thailand. It was the first such microinsurance product made available in Thailand.

Sompo Japan say they now have 1,158 subscriptions to the scheme in the first four months of the pilot. Key to getting such good take up for the microinsurance product has been making it easy to understand and promoting the easy payout associated with an index based weather insurance product. Contractually predetermined payouts are made should the measured precipitation fall below a set level.

Sompo Japan says that they will work towards broadening this products scope to include other provinces, crops and countries in Southeast Asia.

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New legislative framework to be introduced in South Africa

AllAfrica.com, 19 August 2010

The Treasury and Financial Services Board (FSB) in South Africa plan to introduce a dedicated legislative framework next year to foster the provision of low-cost, simple and standard insurance products along the lines of the low-cost Mzansi bank account, South Africa's low-cost national banking system.

Microinsurers will have their own dedicated licence and be subject to lower capital requirements and less onerous regulations. The proposed policy and legislation, which is due to be finalised next month, is aimed at broadening access to insurance products for low-income earners.

The regime will also formalise unregistered insurance businesses such as funeral parlours and those in the "assistance business" space. It will allow for large, formal insurers to take out a dedicated licence to enter the microinsurance field and will combat consumer abuse, particularly by funeral parlours.

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Social Protection Floor Advisory Group holds first meeting

Former Chilean President Michelle Bachelet presided over the first meeting of the Social Protection Floor Advisory Group, held in Geneva on 11 and 12 August and convened by the ILO Director-General, Juan Somavia.

The Social Protection Floor is a global social policy approach promoting integrated strategies for providing access to essential social services and income security for all.

Recognising the importance of ensuring social protection for all, the United Nations System Chief Executives Board for Coordination (UNCEB) adopted, in April 2009, the Social Protection Floor initiative, as one of the nine UN joint initiatives to cope with the effects of the economic crisis. This initiative is co-led by the International Labour Office and the World Health Organization and involves a group of 17 collaborating agencies, including United Nations agencies and international financial institutions.

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China Life and microinsurance

In recent years, the Chinese government has been actively building a rural social welfare system, which includes a nationwide New Rural Cooperative Medical Programme and a New Rural Pension Programme. However, due to historical and financial reasons, people who participate in these government sponsored programmes still lack accident coverage.

In August of 2008, China Life Insurance Company Limited, one of the largest life insurance companies in China, developed a microinsurance accident product to fulfill the gap in the market. According to company statistics, China Life provided 7,860 thousand villagers with personal accident insurance to compliment the government social programme to improve rural area’s risk and living condition.

Additionally from September 2008 to December 2009, China Life provided 34.6 billion RMB ($5 billion) in credit life insurance, which covered over 1,800 small loan takers. China Life’s Health Insurance products are also available, which compensates rural people’s medical expenses after accidents.

China Life is continually developing its microinsurance business model with tailored products at affordable price, easy underwriting and claim services, and quick product delivery. The company has gained considerable support from many government offices and media, which has resulted in their microinsurance initiative winning the 16th China Enterprise Management Innovation Award.

Click here to find out more about China Life

The big push into rural Fiji

Island Business, 14 August 2010

Among many of the new initiatives developing in Fiji, is the entering of the local insurance companies, who, through a new working partnership with the Reserve Bank and the Pacific Financial Inclusion Programme (PFIP), are being urged to extend their insurance services to low-income households.

PFIP research estimated that around 85,000 people have insurance policies in Fiji and this leaves almost 250,000 not protected from unpredictable events causing financial hardship. With RBF indicating it will tweak the Insurance Act if needed in order to accommodate this new product, at least one insurance provider has confirmed it would have a microinsurance product out in the market before the year-end. 
 
"The costs will have to be absorbed by us at first but we are definitely launching such a product at the later part of the year," said Krishnan Narasimhan, General Manager Fiji Operations at the Life Insurance Corporation of India. Because its parent company is one of the three biggest microinsurance providers in India, LICI Fiji is not short of expertise in this field.
 
Like companies already riding on mobile telephone technology to reach their customers, LICI also has plans, although early at this stage, to use mobile companies as channel partners for the necessary transactions linked to its microinsurance product.

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India becomes spawning ground for global microinsurance products

The Economic Times, 10 August 2010

The poor need insurance. This was the mantra — learnt first in India — with which Allianz set out to launch its global microinsurance business, first in Indonesia, and then in Egypt, Colombia, Ivory Coast and nine African nations. Now, almost four years after it exported its first microinsurance product out of India, Allianz is shipping out a new mantra: the poor need savings first.

Allianz’s India JV, Bajaj Allianz, launched the savings-linked microinsurance scheme, Swayam Shakti Suraksha, in April 2008, in association with SKS Microfinance. The scheme, with a minimum premium of only Rs 20 ($0.43) per week, already has over 2.5 million customers, 99% of them women. "It is nothing but phenomenal," says Michael Anthony, global head of microinsurance projects, Allianz. For a premium of only Rs 35 ($0.75) per week over a period of five years, customers receive Rs 13,200 in case of natural death and Rs 33,900 in case of accidental death. If unclaimed, the deposit is refunded with interest after five years.

The global microinsurance scene is full of small, local and national players. Allianz, along with American International Group, or AIG, and Zurich Financial Services are the few that have major plans worldwide. AIG, in fact, entered the microinsurance fray as early as 1997 in Uganda, tying up with microfinance institution Finca Uganda. It is now present in South Africa, besides India. Zurich launched group-wide microinsurance initiatives in 2007 and it serves over one million customers in countries across Africa, Latin America, and through its partners in China, according to its website. 

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Academics call for climate insurance role at Mexico Summit

Business Green, 5 August 2010

A group of academics working from the United Nations University think tank and industry-backed Munich Climate Insurance Initiative (MCII) have this week stepped up calls for diplomats at the Bonn climate talks to incorporate support for new insurance models into the draft negotiating text being prepared ahead of the Mexico Summit in November.

The group issued a 28-page policy brief entitled Solutions for Vulnerable Countries and People, arguing that pilot projects undertaken by the insurance industry suggest that the sector could play a key role in reducing climate change risks and leading climate adaptation projects.

"Our research over the past years has shown that insurance solutions – with co-ordinated public-private action and some international support – has the potential to help vulnerable countries and people adapt to climate change," said lead author Koko Warner. “Now it is time to move from knowledge to action. The need to link DRR and insurance and scaling them up is greater than ever to get the critical mass for adaptation."

The report cites a number of successful small-scale insurance projects that have helped poor communities reduce climate risks, including a microinsurance initiative in Malawi that allows farmers to insure themselves against the failure of maize crops and the Horn of Africa Risk Transfer for Adaptation which helps vulnerable farmers pay for insurance premiums through risk reducing labour such as improving irrigation channels.

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Micro health insurance product introduced in Mongolia

Mosleh Ahmed, 29 July 2010

A new micro health insurance product, being introduced in Mongolia, has been developed based on the specific insurance needs of the low-income population. The project, which the Financial Commission of Mongolia and UNDP is implemented with the financial support from the Government of Luxembourg, started in May 2009 to assess the needs of the population and develop a suitable product.

The project is expected to provide the government and private sector with the foundation of a microinsurance industry that can be continuously developed and adapted to meet the needs of the population.

The monthly premium of the micro health insurance product is approximately 6,200 MNT ($4.6) and 74,000 MNT ($55) annually. As the insurance will cover up to four family members, the monthly premium per person would be around 1,500 MNT (£1.1) monthly. The insurance covers in-patient services including diagnosis, lab tests, treatment/surgery and medicine costs with maximum benefit of 100,000 MNT ($74) and out-patient services including diagnosis, lab tests, treatment/surgery, and hospital bed/food charges with maximum benefit of 400,000 MNT ($300) per year as well as patient’s transportation cost up to 50,000 MNT ($37) to be compensated by the partner insurance companies. The clients and family members are entitled to one free health check-up if there has been no claim during the insured year.

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New regulations hurting microinsurance in Kenya

Business Daily Africa, 29 July 2010

The recent changes requiring insurers to separate life from general business and new capital rules are likely to scuttle the growth of microinsurance, said key players in the sector.

They said the implementation of these guidelines will affect the nascent sub-sector with the potential of locking out new players and low-income earners.

Similarly, the new capital requirement will raise the entry bar, locking out players who may be angling to enter the business through the segment.

"Microinsurance is a low-premium high-volume business and it’s effective through bundling strategy which involves packaging life and general insurance to increase uptake," said Mr Nelson Kuria, the managing director of CIC Insurance.

Whereas the Insurance Regulatory Authority (IRA) is said to be responsive to the emerging development, failure to provide legal backing leaves microinsurance at the mercy of the regulator, which situation is not conducive for growth through innovation and research.

The implementation of the new requirements will curtail the ongoing drive to increase penetration, Mr Kuria said.

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