15th International Conference on Inclusive Insurance - Day One
All eyes were on the official opening ceremony of the 15th International Conference on Inclusive Insurance (ICII) ‘Coping with Climate Risk’ at the Pan Pacific Sonargaon Hotel in Dhaka, Bangladesh today. The Honourable Prime Minister of Bangladesh Sheikh Hasina spoke passionately about her personal connection with the insurance industry, the developments of the insurance sector over the past decade and increasing insurance penetration to those that truly need it. She told more than 500 delegates from 42 countries that insurance can play an effective role in tackling natural disasters, in alleviating poverty and creating jobs. “Everyone needs insurance, regardless of the rich and the poor.”
The Prime Minister also reminded the audience that while the impacts of climate change are increasing globally, South Asia is particularly at risk, with Bangladesh being the seventh most vulnerable country in the world to natural disasters. “There is a need for insurance to play a more effective role in protecting the economic development of Bangladesh,” she said. ‘“In the past decade we have reduced poverty from 41 percent to 21 percent and grown the economy by 8.7 percent annually. However, the insurance industry's contribution is currently less than one percent.” The Prime Minister laid strong emphasis on the government’s strong willingness to support the industry – declaring 1st of March as National Insurance Day - and stressed the need for the creation of partnerships between the government, private sector, NGOs and MFIs to promote the growth of inclusive insurance.
Building partnerships was also on the mind of Thomas Loster, Chairman of conference co-partners Munich Re Foundation, who called for closer cooperation between insurers, MFIs and NGOs in Bangladesh. “Governments must engage with the private sector to come up with inclusive insurance solutions,” he said. “The MFI and NGO sectors in Bangladesh are strong, and the young insurance sector must partner with them.”
Welcoming guests to the conference, the President of conference hosts the Bangladesh Insurance Association Sheikh Kabir Hossain declared that the insurance sector determines the strength of a country’s economy. He explained that National Insurance Day in Bangladesh marks the day that Father of the Nation (and of the Prime Minister) Bangabandhu Sheikh Mujibur Rahman joined the industry. The commitment by government to industry was underlined by Finance Minister Mustafa Kamal who assured participants “the Bangladesh parliament will take all necessary measures to develop the insurance sector.” Asadul Islam, Senior Secretary at the Financial Institutions Division added that “microinsurance has shown its potential to eradicate poverty and to ensure gender equality.”
In his opening comments, Doubell Chamberlain, Chair of conference co-organisers Microinsurance Network reminded participants that low-income communities are facing increasingly severe risks. “Insurance and other risk management mechanisms are needed,” he said, “and the ICII is important for convening expertise, probing new ideas, sharing discussions, and gaining new perspectives to find solutions to problems faced.” Shafiqur Rahman Patwary, Chairman of the Insurance Development and Regulatory Authority of Bangladesh (IDRA) added: “Bangladesh is on the development high road. Keeping in mind sustainable insurance, we are optimistic we can grow further through innovative products provided through alternative distribution channels.”
The opening ceremony was followed by the first conference plenary ‘Making inclusive insurance work for the most vulnerable’, facilitated by Thomas Loster. Bangladesh is one of the fastest growing economies. Financial inclusion, including insurance, is pivotal for resilience and sustainability. Insurance protects not only the most vulnerable, but it also protects the macro economic gains that have already been achieved.
Dr Astrid Zwick, Head of the InsuResilience Secretariat, presented the first insights from a new Landscape of Climate and Disaster Risk Insurance (CDRI) in Asia and the Pacific. Four key findings related to regulation, data, technology, and integrated approaches. "Climate and disaster risk financing and insurance need to be integrated into comprehensive and holistic strategic frameworks,” said Dr Zwick, for example including credit, savings, and insurance. But holistic strategic frameworks require collaboration across different stakeholders and ministries, and if there are separate regulatory bodies for microfinance and insurance, they need to work together.
Ashok Shah, Group CEO of APA Insurance in Kenya said that one of the greatest microinsurance challenges is raising awareness and financial literacy - as well as building trust. “We bring farmers with us when we take samples at the end of the season to measure yields,” he said. “That way the farmers understand the process and this builds trust.”
Lea Müller, Head of Consulting at CelsiusPro in Switzerland, explained: “Using technology for climate inclusive insurance can bring additional benefits but needs to be built on strong partnerships. Working with different partners has enabled us to reach 40,000 people in South Africa,” she said. “Satellite data is available everywhere, and the CelsiusPro approach can be replicated. Data is less of a restricting factor than in the past.”
Technology is the way forward, echoed Dr. Rahman, Professor in the Department of Development Studies at the University of Dhaka. “Digitisation is the name of the game,” he said. “Insurers can learn from the banking revolution in Bangladesh. Money is not the problem - lack of trust is, and the insurance industry must gain that trust.” He listed seven key principles for pro-poor insurance: comprehensive need-based solutions, client value, affordability, accessibility, transparency, sustainability and an enabling environment.
Day two - Wednesday, 6 November
Day Two of the 15th International Conference on Inclusive Insurance was filled with a packed programme of parallel sessions covering topics as diverse as insurance markets for SMEs to gender inclusivity in climate risk insurance. To set the scene, the plenary session on The challenge of reaching the bottom of the pyramid: distribution aimed to find solutions to distribution at scale.
Moderated by Microinsurance Master’s Bert Opdebeeck, the three panelists together represented around 85 million enrolments. They were asked to address four key topics: is distribution the toughest nut to crack?; distribution: an embarrassment of riches?; what are essential partner traits?; and partnership chemistry. Lorenzo Chan of Pioneer Insurance said it was essential to design yourself around partners and clients served and that “shared values are important for successful partnerships to work.” MicroEnsure’s Richard Leftley observed that failing to understand the cost of distribution can lead to the failure of the insurance product and that trust was massively important in the equation. "No one wakes up in the morning wanting wanting to buy insurance. People worry about the risks they face- such as a relative getting sick or dying. People trust telcos more than insurance companies because when they top-up, it works!” “You need to think about the whole customer journey, your distribution partner and your needs as insurer,” added Mark Robertson from Hollard Life South Africa.
Key takeaways from this plenary included agreement that distribution is indeed the toughest nut to crack, and that internal set-up is key in your choice of B2B and B2C distribution channels. When choosing your distribution partner, you need to look for trust, volumes, values and a long-term perspective. Don’t forget you are solving a problem for your partner - you can add value in terms of alignment and incentives.
Participants then had a tricky choice of two from eight parallel sessions, starting with understanding the role of the different stakeholders, hosted by the Bangladesh Insurance Association (BIA) and facilitated by Michael J. McCord of MicroInsurance Centre at Milliman. Panelists Prof. Rubina Hamid of Sun Life Insurance; Farzanah Chowdhury from Green Delta Insurance; BRAC’s Shameran Abed and Asadul Islam of the Financial Institutions Division agreed that effective collaboration requires clear understanding of customers' needs and being more customer-centric instead of product-focused. On an optimistic note, Asadul Islam said he believed that increased insurance outreach to 35% of the population (over 50 Million people) in Bangladesh by 2025 is possible!
Those who attended the parallel session on Small and Medium Enterprises, hosted by GIZ, heard that SMEs are important for employment and economic growth and if they fail, it affects entrepreneurs, employees, and their dependents. Sara Jane Ahmed of the Climate Vulnerable Forum and V20 pointed out that only one in three SMEs recover after a natural disaster. Facilitated by Gregor Sahler from GIZ, AXA’s Kristian Mangold and Jeremy Gray of Cenfri listed lack of financial literacy, exposure to disasters, lack of access to insurance, lack of funds and transaction costs as barriers to SMEs taking up insurance. However, insuring SMEs is an investment in a potentially huge opportunity, and it may be worth taking a loss early by paying claims and removing exclusions to build trust.
Meanwhile the parallel session hosted by Craig Churchill of the ILO's Impact Insurance Facility and Thomas Wiechers of FSD Africa aimed to help participants learn and act the process of making change happen and getting insurers ready to serve low-income and emerging markets. As Yogi Berra once said, “If you don’t know where you are going, you might not get there.” Key takeaways were: become more client-centric; be more innovative; be more efficient; improve operations; enable staff; secure new partnerships; improve governance; and improve organisational structure.
Gender-inclusiveness in climate risk insurance was the theme of a parallel session hosted by InsuResilience and facilitated by Katherine Miles. All panelists agreed there is not enough gender disaggregated data which is key for gender-responsive climate risk insurance. Hannah Grant of A2ii pointed out that “mobile can provide great access to insurance, particularly for women who like the privacy of transacting digitally.” Christina George said the African Risk Capacity will conduct impact assessments on all past payouts to determine gender impact, and are now inviting governments to undertake a gender audit at the outset of their projects. Vener Abellera, CEO of CARD MRI Insurance Agency in the Philippines, discussed the various options available to women through micro, macro and meso insurance models - pointing out that of her six million members, 95% are women.
Women are a key target when it comes to creating awareness for micro-health insurance, the topic of the parallel session hosted by BIA and facilitated by Sultan-ul-Abedine Molla of the Academy of Learning. Prof. Shibli Rubayet of Shadharon Bima Corporation pointed out that in Bangladesh, around 40% of patients sell assets to pay for treatment, and that micro health insurance should be seen as a transitional mechanism to improve healthcare. Dr. Mosharraf Hossain of IDRA and Pranav Prashad from the ILO's Impact Insurance Facility heard from Telenor Health CCO Andrew Smith, who said clients have three simple questions when it comes to healthcare issues: What do I have? Where do I go? How can I afford it? He explained how Telenor Health is helping solve this through a free, 100% digital approach to their members.
Developing weather index insurance markets was on the minds of participants at a session hosted by the IFC and facilitated by Prerna Saxena. Farzanah Chowdhury of Green Delta Insurance said not many insurers wanted to jump into crop insurance, but they chose to in part because of the large revenue potential in a fast-growing economy. BRAC Bank - represented by Abdul Momen - got into crop loans because bundling the loan with the insurance gave the bank more confidence to accept the risk. Dr Shameem Hassan Bhuiyan recommended that insurers partner with a data expert to validate historical data with other sources, while other panelists including Mohammed Masum of the Supreme Seeds Company and Vijaysekar Kalavakonda of IFC agreed that development agencies can help the first few insurers in a country with crop insurance - when they succeed, others will follow.
Jakub Nugraha of PT Asuransi Central Asia and Daniel Osgood from Columbia University discussed agricultural microinsurance in Indonesia with facilitator Dirk Reinhard of Munich Re Foundation. The session addressed both scaling participatory approaches for indexed insurance and how agriculture microinsurance in Indonesia is initiating integrated climate risk management for sustainable farming. One key takeaway was that better collaboration with different stakeholders is crucial in ensuring success for sustainable farming, while the use of technology can help reach scale and reduce costs. It is also important to engage with farmers early and choose the right partners.
The final parallel session parallel session, hosted by ILO's Impact Insurance Facility and FSDA, discussed the evolution of insurance distribution models. Saurabh Sharma of Britam and Richard Leftley of MicroEnsure, guided by Thomas Wiechers, discussed finding the right distribution mix - product type, targeted segments, pricing points and channel types. Saurabh identified three factors for success - partnerships are the key; agent definition is changing; deliver value, not products.
Participants came back into plenary for the final session of the day - the role of policy, regulation and supervision in enabling climate risk solutions, hosted by A2ii. Andrea Camargo of A2ii facilitated a discussion between Teresa Pelanda (also of A2ii), AXA’s Kristian Mangold and Yegnapriya Bharath of IRDA. The session highlighted the outcomes of the three consultative forums that the A2ii conducted in Panama, South Africa and Bangladesh, by bringing together industry, regulators and supervisors to discuss their role in enabling climate risk insurance solutions. Teresa observed that supervisors can catalyse action and act as a bridge to policymakers, industry and consumers to strengthen resilience, while Yegnapriya touched on the challenges faced by the regulator regarding distribution channels for inclusive insurance and how IRDA have adopted proportionate regulations to address the issue. She also observed that whilst speedy approvals are great for industry, consumer protection should not be overlooked by regulators, who are at the same time, encouraging innovations to speed up approval processes in India. Kristian highlighted the challenges faced in developing and implementing weather-indexed solutions - given that they are fairly new products there’s a need for further awareness among regulators about how to integrate them into the regulatory framework. Insurers must also think of their distribution partners when designing products, given regulatory implications. “Products cannot be standalone, partners matter,” he concluded.
Day three - Thursday, 7 November
The final day got underway with four parallel sessions looking at post disaster recovery, blockchain, different scales of insurance and crop insurance.
The Microinsurance Network (MiN) hosted the session on the role of insurance in post disaster recovery, with ED Katharine Pulvermacher in the facilitator’s chair. The session explored the long-term impact of catastrophic events and natural disasters on vulnerable communities, and how insurers can develop products that can have long-lasting impact on building resilience in these communities. Denis Garand of Denis Garand and Associates pointed out that Hurricane Maria, which struck Dominica in 2017, impacted 80 percent of the population and cost 224 percent of GDP. “It’s hard to recover from that,” he said. “But inclusive insurance is part of the solution!” Farzanah Chowdhury of Green Delta highlighted the importance of supporting mental health recovery after disasters: “Money isn’t everything. People need free personal counselling and treatment.” Pointing to the experience of Haiti, Isabelle Delpeche of Alternative Insurance Company urged insurers to change their behaviour - “investing in clients post-disaster brings trust and a sense of community,” she said. Lorenzo Chan of Pioneer added that insurers need to pay claims immediately in order to give customers as positive an experience as possible. In addition, paying claims promptly helps to build trust and scale.
Tech, blockchain, microinsurance, and actuaries were under the spotlight in a session hosted by Microinsurance Centre at Milliman. Facilitated by Queenie Chow, the panel considered how emerging technologies can help increase access to inclusive insurance. David Ding from Smart Thinking Consulting explained how Alibaba in China used blockchain to provide critical illness coverage on a mutual platform to get 100 million members in just four months! Paul Mesarcik of Lumkani showed how a combined fire insurance and early warning system is helping to mitigate fire damage in slums in South Africa, while IBISA’s Annette Houtekamer-van Dam explained how combined blockchain and parametric insurance covers farmers’ crops and livestock when they are affected by droughts. All panelists agreed that protection of customer privacy is an important regulatory issue when using these technologies.
The session on integrating macro, meso and microinsurance schemes was hosted by the Munich Climate Insurance Initiative (MCII) and aimed to showcase successful examples of such schemes in the Caribbean and Pacific. Facilitated by Jennifer Cissé of MCII, panelists including MCII’s Tara James, Krishnan Narasimhan of the UN Capital Development Fund and the ILO’s Pranav Prashad shared lessons from the Climate Risk Adaptation and Insurance in the Caribbean (CRAIC) project and the Pacific Regional Climate Risk Adaptation and Insurance (PRCRAI) scoping study.
The more technically-minded headed for a deep dive into the new paradigm for crop insurance in developing countries hosted by Munich Re. Facilitated by Munich Re’s Joachim Herbold, Felicitas Röhrig from the Potsdam Institute for Climate Impact Research and Dr. Axel Relin of GAF AG explored new approaches to area yield crop insurance. Felicitas presented two techniques for yield estimations in crop models: AMPLIFY (Agricultural Model for Production Loss Identification to Insure Failure of Yields) and a process-based model, SWIM (Soil and Water Integrated Model). Dr. Axel discussed remote sensing-based flood and drought monitoring and presented insights into what is possible from the use of this technology. Meanwhile Dr Claire Souch briefly presented the Oasis Platform for Asia - a free, open source modelling platform for insurance that can be used for pricing, capital management and risk management.
After a coffee break, another round of parallel sessions, starting with asking the question: how can insurance build society's capacity to develop? Facilitated by Cenfri’s Doubell Chamberlain and hosted by InsuResilience, Cenfri and the MiN, this session explored how insurance can help achieve the Sustainable Development Goals (SDGs), and the potential incentives for the insurance industry to be engaged and invest in the broader development landscape. Dr. Saleemul Huq of ICCCAD in Bangladesh explained that aside from adaptation as a measure to respond to climate change, there is a need to focus on loss and damage. There is the potential risk of millions over time not being able to continue their present occupations, such as farming or fishing. Job opportunities should be created for them in migrant resilient towns rather than major cities. UNDP’s Jan Kellett emphasised “insurance is important in development - from our own in-country work we are aware of the impact of unmanaged risks.” Agreeing, Augusto Hidalgo of Willis Towers Watson spoke of the need for public-private partnerships to develop and implement a roadmap for insurance to play a positive role in development. “Questions of risk transfer should be coupled with questions about potential for risk reduction,” he said. “There is a need to take a holistic view and not push forward fragmented approaches.”
Innovations in health insurance for underserved customers in Bangladesh were discussed by Milvik’s Israt Mustafa, Richard Leftley of MicroEnsure and Jamal Uddin from SVN, facilitated by Denis Garand. Richard presented on new inclusive insurance products or partnerships in the fields of health or hospital cash, explaining that after much trial and error in different countries including India and Tanzania, hospital cash took off because it is scalable, there’s no need for third party administrators (TPAs), it’s simple and easy to explain. Jamal discussed a pilot health finance scheme for ready-made garment workers in Bangladesh, which focuses on accessibility, availability and viability. Among the key results were that 93 percent of workers who took out a health insurance policy, did so voluntarily, and around 80 percent of garment factory workers were interested in having health insurance. Milvik’s model combines mobile hospital cash with mobile health and both online and offline services, using a mobile app and paperless subscription and cashless claim management. However, challenges in Bangladesh remain, including the absence of microinsurance regulations, a lack of understanding about insurance and a lack of trust in products.
Lack of trust was among the challenges on the minds of participants at the session on new approaches for insurance outreach to agricultural households, hosted by ILO's Impact Insurance Facility. The session highlighted the importance of getting distribution channels right, as this is the main success factor in achieving outreach. Insurance can play a bigger role in agriculture by improving productivity as well as building resilience to climate change and extreme weather. Facilitated by ILO’s Pranav Prashad, panelists Syed Moinuddin Ahmed of Green Delta Insurance, Devilal Vyas from the People's Education and Development Organization and APA’s Sarfraz Shah shared their experiences on how thinking locally and working with local people, which have been key drivers of success.
Last but certainly not least, MiN hosted a parallel session, which tackled the thorny issue of data - or the lack of it - in measuring impact of insurance. Facilitated by MiN board member Kate McKee, measuring the impact of insurance: challenges in data collection included the launch of the Landscape of Microinsurance in Africa: focus on selected countries and the premiere of a short video based on the study. Challenges around collecting data include data infrastructure, lack of regular reporting, varying definitions of microinsurance, unwillingness to share data and inconsistencies. These challenges were picked up by Queenie Chow of MicroInsurance Centre at Milliman who pointed out that concerns about market competition could be getting in the way of development. MiN ED Katharine Pulvermacher spoke of the challenges of identifying emerging trends without good data. “When will insurers put people over premiums?” she asked. Mariah Mateo Sarpong, also of MicroInsurance Centre at Milliman, thought there was a need to better incentivise insurers and regulators to participate in studies and share data.
And so we arrived at the final plenary session of the conference. Making innovation more sustainable, hosted by InsuResilience and the Global Index Insurance Facility and facilitated by Richard Leftley, who kicked off the discussion by asking: “why do many microinsurance pilots fail? Why aren't we reaching the envisaged scale? How can technology be a multiplier for scalable climate risk microinsurance?” Attempting to answer these questions were Rishi Raithatha from Mobile for Development, GIZ’s Dr Jochen Ramcke, Chair of the MiN board Chair Doubell Chamberlain and Vijaysekar Kalavakonda of the IFC, who said farmers in Bangladesh are reluctant to buy microinsurance because it is a less tangible product than credit. On the other hand, purely government subsidised schemes don’t work either - the World Bank Group is focusing on public-private partnerships. Doubell pondered why it is hard for the private sector to distribute weather products. “Weather insurance hasn’t taken account of farmers’ conditions and issues,” he said.
To close the conference, the MiN’s Katharine Pulvermacher, Orville Johnson, next year’s conference hosts the Insurance Association of Jamaica, Astrid Zwick of InsuResilience, the BIA’s Sheikh Kabir Hossain and Dirk Reinhard from Munich Re Foundation offered their reflections and insights on how to scale up climate risk insurance going forward. Dirk’s summariesed the key takeaways including better coordination between governments; cooperation and partnerships, especially between different stakeholders, namely PPPs; the need for more innovative and Pioneer insurers; financial inclusion strategies at all levels; and disaster risk management approaches including ex-ante financing and insurance. Echoing these themes, Astrid emphasised the importance of looking beyond the numbers and to the impacts of insurance solutions on the poor and vulnerable through convergence and collaboration.
This year’s host Sheikh Kabir Hossain thanked all participants, speakers and panelists for making the conference a great success, to which Orville Johnson added that he looked forward to welcoming everyone back in Jamaica next year for the 16th International Conference on Inclusive Insurance!
It was left to Katharine to close out the conference, by making a plea to all for the expansion of inclusive insurance services and rapid-response climate risk measures. She stressed the need for stakeholders to work together to raise ambitions and realise the potential of inclusive insurance, without leaving behind the human touch. “Our vision over the next five years is to double the current reach and serve one billion people by 2025!” she declared.