Risk-pooling products that are designed to be appropriate for the low-income market in relation to cost, terms, coverage, and delivery mechanisms

Risk-pooling products that are designed to be appropriate for the low-income market in relation to cost, terms, coverage, and delivery mechanisms

• Risk-pooling products that are designed to be appropriate for the low-income market in relation to cost, terms, coverage, and delivery mechanisms

Michael J. McCord. AIG Uganda - CGAP Working Group on Microinsurance, Good and Bad Practices Case Study No. 9. April 2005.

• Michael J. McCord. AIG Uganda - CGAP Working Group on Microinsurance, Good and Bad Practices Case Study No. 9. April 2005.

• James Roth and Vijay Athreye. Tata – AIG Life Insurance Company Ltd. - CGAP Working Group on Microinsurance, Good and Bad Practices Case Study No. 14. September 2005

• Lemmy Manje. Madison Insurance Zambia- CGAP Working Group on Microinsurance, Good and Bad Practices Case Study No. 10. May 2005

• Sven Enarsson and Kjell Wiren. MUSCCO: Malawi Union of Savings and Credit Cooperatives: Good and Bad Practices Case Study No. 8 . March 2005

• Craig Churchill and Terry Pepler. Tuw Skok, Poland: Good and Bad Practices Case Study No. 2. May 2004

Micro Insurance Agency (MicroEnsure)

• Micro Insurance Agency (MicroEnsure)

• Traditional brokerage activity focused on low income
• Primarily work through MFIs
• Uganda, Tanzania, Ghana, India, and the Philippines
• “Break even in <1 year”
• http://www.microinsuranceagency.com/index.html

• Planet Guarantee

• Numerous francophone countries
• Technical assistance provision and brokerage
• http://www.planetfinancegroup.org/EN/pop_planet_garantee.php

SANTAM (South Africa) broker with runners

• SANTAM (South Africa) broker with runners

• Recent variation on broker model
• Sell new low income household structure and content insurance
• Brokers employ “runners” who sell the product but not registered to provide advice
• Advice provided by broker or supervisor. Supervisor for every 5 runners.
• Premiums collected by debit order. No option to pay premium in cash.
• Free “Call me” for SMS used for call centre access

• Mexico

• Insurers generally use brokers for all business

Guy Carpenter –

• Guy Carpenter –

• Reinsurance intermediary for microinsurance
• ILO Microinsurance Innovation Facility

Traditional agents

• Traditional agents

• Gemini Life Insurance (Ghana)
• AIG Uganda (as intermediary)

• Micro-agents

• Delta Life (Bangladesh)
• Tata-AIG (India)

• Unlicensed agents

• SurAmericana (Colombia)
• Allianz (Indonesia)

India (2005)

• India (2005)

• In addition to an insurance agent or corporate agent or broker licensed under the Act, … as the case may be, micro-insurance products may be distributed to the micro-insurance agents

• Peru (2007)

• “The commercialization of microinsurance can be undertaken by direct sale to the insured, through the intermediation of insurance brokers or through the signing of commercialization contracts

• Bolivia (2009?)

• “Bans” brokers in microinsurance (draft regulations)

Alternative delivery channels: Traditional brokers/ agents typically do not want to sell microinsurance with its relatively small premiums (and thus small commissions). Thus, many microinsurance delivery channels are unlicensed and unregulated agents. Often the regulator allows the insurer to take on the risk of agents so may not need to be directly regulated.

• Alternative delivery channels: Traditional brokers/ agents typically do not want to sell microinsurance with its relatively small premiums (and thus small commissions). Thus, many microinsurance delivery channels are unlicensed and unregulated agents. Often the regulator allows the insurer to take on the risk of agents so may not need to be directly regulated.

• Intermediaries such as agents and brokers are also important actors at the micro level. These entities need to be strong, capable and responsive to the particular needs of low-income households and their service providers in order to contribute effectively to building an inclusive financial system.

Assess potential role and profitability

• Assess potential role and profitability

• Is this really a priority for brokers

• Develop (buy) low-income market expertise

• Someone from MFIs or other type distributor

• Identify demand

• Risk managements gaps

• Identify potential market conduits

• MFIs ( easier to start)
• Others – retailers, utilities, cell phone operators, churches

Microinsurance Innovation Facility

• Microinsurance Innovation Facility

• Innovation grants
• Technical assistance
• Research

• Micro Insurance Network

• Leaders forum
• Sub groups
• Newsletter

• 5TH International Microinsurance Conference

• Dakar, Senegal – 3-5 November 2009

“Covers an individual / company / household for some or all of a financial loss that is linked to an unpredictable event or risk, via risk pooling and the payment of a premium”

• “Covers an individual / company / household for some or all of a financial loss that is linked to an unpredictable event or risk, via risk pooling and the payment of a premium”

Community-Based Model (ILO STEP)

• Community-Based Model (ILO STEP)

• Owned and Managed by Members

• Mutual Model (TYM and their planned MBA)

• Owned by members, professional management

• Partnership Model (ABIC and VBARD)

• Very limited risk to MFI, administrative burden limited

• Also: full service insurer, provider, social security models, new microinsurance brokerage model