Country Builders Bank July 14, 2016

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1 Country Builders Bank July 14, 2016

2 Discussion Framework ü Background Rural Bank Industry ü Evolution of Microinsurance in Rural Banks ü Landmark regulatory policies for microinsurance ü RBAP Strategy and Milestones ü The Case of Country Builders Bank

3 Rural Banks in the Philippines 18 rural banks established The number of RBs peaked at rural banks as of April 2016

4 The Rural Bankers Association of the Philippines Rural Bankers Association of the Philippines (RBAP) Rural Bankers Research and Development Foundation, Inc. (RBRDFI) Luzon Federations Visayas Federations Mindanao Federations Member Rural Banks

5 Loans and Deposits (to provide financial services to farmers, fisherfolks and entrepreneurs) INFORMAL FORMAL

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9 Insurance Memo Circular Section 6.4. Microfinance institutions engaged in microfinance operations may apply and be licensed as microinsurance agent provided that: A soliciting agent is identified by the institution The institution sells microinsurance products only to its microfinance clients

10 Insurance Memo Circular q Microfinance institutions like bank and non-governmental organizations applying for a microinsurance agent s license shall REFLECT IN THE PRIMARY OR SECONDARY PURPOSE TO ACT AS A MICROINSURANCE AGENT. q A microfinance institution licensed as a microinsurance agent shall display prominently in its premises a supplementary signage with the wordings

11 Marketing, Sale and Servicing of Microinsurance Products A rural, cooperative, or thrift bank, including its authorized branch/es, extension office/s and other banking offices (OBOS) can: present, market and sell microinsurance products as a financial product of an allied undertaking (under GBL, Section 20) service (i.e. collect premiums and pay claims) microinsurance products as collection and payment agents (under GBL, Section 53.3)

12 All organic documents, informational and promotional materials used for microinsurance shall: Prominently display the name of the issuing insurance provider/partner State the clause: The insurance product/s of (name of issuing insurance provider ) is/are not insured by the Philippine Deposit Insurance Corporation and is/are not guaranteed by the (name of the bank).

13 RBAP S Strategy for Microinsurance Technical Assistance Rural Bankers Association of the Philippines (RBAP) Rural Bankers Research and Development Foundation, Inc. (RBRDFI) Funding Support TECHNICAL ASSISTANCE TRAINING LICENSING Member Rural Banks

14 Microinsurance Agent Training for RBs Fundamental Concepts and Principles of Insurance Difference between traditional insurance and MICROinsurance Regulations on MI sales, marketing and servicing of MI Effective marketing of Microinsurance Microinsurance product features Special coverages and riders Standard policy provisions Proper Market conduct Claims settlement

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16 Risk / Insurable Event Insurance Insurer / Risk-carrier Intermediary The Partner-Agent Model

17 Compliance to Regulations 51 rural banks with microinsurance agents license

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20 Modes of Microinsurance Delivery q Microinsurance as a compulsory product Example: Microinsurance tied up with loan such q Offer microinsurance as an additional product (voluntary) Example: Add-on to a micro-savings account Option to increase coverage and/or benefits in exchange of additional premium

21 TARGET MARKET q MICRO-BORROWERS q MICRO-DEPOSITORS q EXISTING CLIENTS OF THE BANK WHOSE ANNUAL HOUSEHOLD INCOME IS NOT MORE THAN Php 206,000

22 Success Stories RURAL BANK OF GUINOBATAN Guinobatan, Albay Microinsurance lowers the risk of non-payment of loan in case the clients experience misfortune from a loss of a family member or their own death. Furthermore, clients manage to stay in the program because of the benefit they get from MI, thus helping RBGI achieve client retention. In fact, drop-out rates lowered to 15% (45% in 2011 to 30% in 2012).

23 RANG-AY BANK San Fernando, La Union In less than a year since the product was launched in March 2012, Rang-ay bank has already enrolled a total of 3,057 borrowers and depositors and 97 of its employees to their MI program.

24 COUNTRY BUILDERS BANK Manila Since the MI product launching last September 10, 2012, CBB had already enrolled 1,045 principal members and their dependents and the number is still rapidly growing.

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26 THANK YOU! Ghay Mapano Project Coordinator (02) /