A TOOL FOR SOCIAL AND ECONOMIC DEVELOPMENT

Transcription

1 A TOOL FOR SOCIAL AND ECONOMIC DEVELOPMENT 4 TH ANNUAL MICROINSURANCE CONFERENCE CARTAGENA, COLOMBIA 5 TO 7 NOVEMBER 2008 OLIVIER BARRAU

2 Summary Haitian Context : Major Factor of vulnerability Our Micro-assurance : An Essential Financial Tool Our Partnership : A Guaranteed Collective Success Keys to success : Our approach Next steps : where do we go from there? 2

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5 Alternative Insurance Company S.A. 27,130, % Nationale d'assurance S.A. (La) 11,522, % Cie d'assurance d'haiti S.A. 5,685, % Internationale Assurance S.A. 5,288, % Les Assurances Leger S.A. 4,545, % National Western Life 2,819, % La Generale d'assurance S.A. 1,102, % Societe de Commercialisation d'assurance S.A. 213, % Capital Life Insurance Co. LTD 210, % Total de l'industrie: 58,519, %

6 The formal insurance Market (all lines combined) represents approximately 250 to people in Haïti while the total population is approximately 8,000,000. That is a maximum of 3.5% of the population. 80% of the economy is part of the informal sector which is the portion of the social pyramid most vulnerable to risks. In favorable environment, Microinsurance has a potential to reach at least 1,000,000,00 people in the next 10 years. 30% of Haiti s GDP is coming from remittances. 6

7 Risks at the heart of the subject Insurance : a real need Haïti : like in other third world countries due to lack of insurance coverage, health and death are major reasons why people fall deeper into poverty. Results from our survey of over 7,000 people throughout the country states clearly that if possible, they would not like to leave their loved ones with debt. If possible they would like to cover their debts, their funeral costs, and the education of their kids. Average funeral expenses are as high as 40, gourdes ($1,025 US), about 11 times monthly income. «Providing low income populations with means to survive without giving them tools to face risks, can be counter productive» E. Ghassana, Représentante du PNUD au Bénin, la pauvreté en Afrique et le Cadre Stratégique de Réduction de la Pauvreté, A.G FANAF,

8 AIC &FONKOZE Partnership Partnership with the largest MFI FONKOZE 9 months to implement the program 1 year later we have 48,000 clients which did not have access to insurance products before received and settled 92 claims declined only 5 claims insured loans estimated mortality rate : 1/1000 real Mortality rate:2/ st year combined ratio: 156% projected combined ratio 2 nd year: 98%

9 Our Approach: START WITH SIMPLE PRODUCTS THAT ARE EASILY UNDERSTANDABLE TO THE TARGET MARKET but BRING SOLUTIONS TO THE POPULATION S NEEDS 1) Death or Health depending on areas 2) Schools expenses or food allocations 3) Disability- Dismemberment / Fire TO START INSURANCE COVERING THE BALANCE OF THE LOAN PLUS AN ADDITIONAL INDEMNITY TO HELP COVER FUNERAL EXPENSES AS IMPROVEMENTS DEPENDING ON RESULTS, CREATE MORE COMPLEX PRODUCTS. WE WILL ADD FINANCIAL ASSISTANCE TO COVER SCHOOL 9 EXPENSES AND OR FOOD ALLOCATIONS

10 AIC & Fonkoze Product Eligibility Coverage Length of coverage: Renewal: Enrollment Insurance premium Payment of premium Exclusion Clients age between 18 and 70 years old having a loan in force with the MFI. No medical procedures Group life insurance policy covering in case of death: Balance of the loan Payment of a fixed indemnity to the beneficiary named by client For the balance of the loan coverage stops 15 days after repayment of loan (usually 6 months) ; for the indemnity, 12months starting at disbursement of loan. If within 15 days of loan repayment, client renews loan insurance is automatically renewed without any policy fees. Presented to the client at the same time as the credit forms. Rates for this program are approximately 0.80% (tax included) Total payment is done at disbursement of loan. One monthly settlement is done with the MFI Practically no exclusions. HIV is covered 10

11 Procedures: No medical exams, enrollment only with an ID of the client Procedures of enrollment and claims are simplified to the maximum to adapt the product to the social and environmental conditions of life of the client. In case of death, required documents are easily obtainable by the family. In case of report we pay the indemnity within 24 to 48 hrs. In case of no report, we pay half of the indemnity and the balance with proper documentation 11

12 Keys to success of the program: Complete involvement of both partners (from top level management) considerable amount of investment in training of employees sharing of resources partnership attitude WIN-WIN-WIN concept

13 Keys to success of the program: Creation of a department handling ONLY micro insurance and invested in a software to handle the volume of transactions 13

14 Keys to success of the program: marketing and education campaign 14

15 From subscription to claims settlements All the way to the branches of our partners

16 Fees for report : Settlement of claims: An amount is allocated by the insurer for reporting Forms to be filled: Claim form to be signed by beneficiary (in both cases report or not) ID of beneficiary ( in both cases) Certificate of death signed by priest or pastor where funeral was held (in case of no report) Signature of credit officer or branch manager (in both cases) Police report or Justice of Peace in case of accidental death or homicide only 16

17 «VERNACULAR» DOCUMENTS : YES! Microinsurance policy

18 Claims declaration Disbursement authorization MIS claims analysis

19 Listing of claims and management of Amendments

20 Program and Product understanding, insured satisfaction and path to improvement Mirebalais assurées Jacmel Agents (Jacmel)

21 In Summary, it s a Insured WIN WIN WIN 1-ultimately cost of money will reduce 2-become less vulnerable to risks 3-Dignity, no burden left behind MFI 1- Added value to face competition 2-Additional income to face increased cost of operations 3- Improve default rate 1-Participate in the social and economic development of the country 2-Improve the image of insurers 3-Penetration of markets that were unreachable 21

22 Important points to remember: A harmony between the offer and the demand. Know your client and understand their livelihood. A multipurpose approach taking into consideration all cultural, social, economic, political, historic and legal. Choose carefully and know your partner well. 22

23 The Future.

24 The future. signing with the second largest MFI Sogesol introduce new products 3 concept working with USAID to see the feasibility of doing a CAT cover

25 Insurance: a real need beyond borders remittances in HAITI Source survey IDB 6 Mars 2006 Major Findings Thirty one percent of Haitian adults approximately 1.1 million people received remittances on a regular basis during The average Haitian remittance recipient receives money 10 times per year The average remittance to Haiti is US$150 The IDB Survey indicates that Haiti received approximately US$1.65 billion during 2006 Actual use of remittances Interest in Financial Products Pay for Education 29% Health/ Life Insurance 89% Start a Business Open a Savings Account Buy or Build a House Buy Health or Life Insurance Other 5% 8% 11% 22% 25% 0% 5% 10% 15% 20% 25% 30% Loan to Finance Business Mortgage/Loan to Buy House Open Savings Account Finance University Education 76% 76% 73% 82% 25 0% 20% 40% 60% 80% 100

26 Thank you