PHILIPPINES: AS MICROINSURANCE AGENTS

Transcription

1 RURAL BANKERS ASSOCIATION OF THE PHILIPPINES: ENHANCING THE CAPACITY OF RURAL BANKS AS MICROINSURANCE AGENTS BY: RUTH ASERON Microinsurance Coordinator RBAP-MABS

2 AGENDA Microinsurance in the Philippine context Philippine definition Common Microinsurance Products Brief description of the Rural Bank Microinsurance Market Potential size Characteristics Rural Banks as Microinsurance Agents Roles and Responsibilities of Rural Banks Advantages of RBs as MI Distribution Channels Lessons of Rural Bank MI Agents The RBAP response

3 Microinsurance: Philippine definition A financial product where: Premiums (computed daily) must not be more than 5% of minimum of non- agricultural wage in Metro Manila, hence premiums cannot exceed PhP per day (US$ 0.47 daily) or PhP per month (US$ monthly) Guaranteed benefits are capped at no more than 500 times the same daily wage or at an annual maximum of PhP202,000 (US$ 4,700) Contracts shall clearly state benefits and terms Easily understood by insured either in English or Filipino Documentation requirements are simple Collections coincide with cash flows - MI National Regulatory Framework - Minimum daily wage as of October 2010 is at PhP or USD 9.40 and estimated workdays in a month is 25

4 The Philippine Rural Banking Network Client base of 6 million Rural Banks cover 85% of municipalities (mostly in rural areas) Total branch/office network is 2,700 Total loan portfolio: PhP 98 Billion (US$ 2.3 B) Deposit base: PhP 105 billion (US$ 2.6 B)

5 Size of the Rural Bank Micro- Market Type of MF Accounts Number (as of December 2010) Microfinance Loans Approximately 800,000 Micro-Deposits 4,941,445 (86%) ** Estimated Household Members 15,000,000 **Source: Philippine Deposit Insurance Corporation, December 2010

6 The Target Market of RB Microinsurance Microfinance Borrower Microfinance Depositor Low-Income client of the Rural Bank BSP Memorandum redefines microfinance clients to include any existing client classified by the bank as low-income or with an average annual household income of PhP206,000 or less (USD 4,745)

7 Rural Bank Microinsurance Team Rural Bank (licensed as MI Agent) Microinsurance Soliciting Officer Microinsurance Soliciting Officer Microfinance Supervisor Marketing / Business Development Manager Compliance Officer Sales Force (microfinance account officers / field staff)

8 Servicing of premium payments and claims RURAL BANK LICENSED MICROINSURANCE AGENT Client Education Marketing of IC approved MI Products Consumer Protection ti While the rural bank is a licensed agent of its microinsurance provider, its microfinance clients remain of prime importance.

9 Advantages of Rural Banks as MI Agents Ability to capitalize on existing operational structure for cost-efficient MI sales and servicing Compliance to both insurance and bank regulators increases their credibility as agents of MI products Enhance clients access to other relevant financial products and services Balanced recognition of MI as both a value-added client service & as a revenue-generating product

10 Lessons of Rural Banks as MI Agents Challenges RBAP s Response Onerous requirements and RBAP worked with the insurance and procedures make it difficult for rural banking regulators to clarify rules and banks to comply with insurance and develop a turn-key approval process bank regulations on their own Challenge in comparing and deciding on the best insurance partners to work with Need to educate bank staff & officers on microinsurance management and sales RBAP acts as a better services bureau to assist banks in selecting and monitoring insurance partners With the support of the USAID, ILO, and Insurance partners, RBAP was able to support a major nationwide training effort to educate bank personnel on microinsurance i Need for more market information Facilitate access to market information for regulators, rural banks and insurance providers through h dialogues and technology-based feedback mechanisms

11 Microinsurance Agent Training for RBs 2 day ys Basic Microinsurance rance Training (with qualifying exam) 1 da ay Product Mastery Training By RBAP-RBRDFI By Partner-Insurer 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

12 The RBAP MI Training Course Key Modules: 1. Fundamental concepts and principles of MI 2. MI Regulations in the Philippines 3. Effective Marketing of MI Training Approaches: 40 % Lecture 25 % Group Discussions 35 % Games & Simulation Exercises

13 GROUP DISCUSSIONS (RBAP MI Training Approaches) Allows for sharing of field lessons and practical insights Typically interactive and open Employs Case Studies

14 Games & Simulation Activities (RBAP( MI Training Approaches) Understanding MI: Barangay Bigkis (localized Treasure Pot game) Ang MI ay parang (Microinsurance is like) Bahay-Buhay-Bagyo ( house-life-typhoon ) Marketing & Selling MI: The Mystery Object D-I-G Tactic (Discover Interests then Get solutions)

15 Results to Date (as of Oct) # of Courses held 13 # of Banks Trained 157 # of Bank Staff Trained 297 # of Banks in Approval Process ) # of Banks Approved as MI Agents 45 7

16 Compliance Process TRAIN In MI Basic + Product Mastery REQUEST ASSEMBLE CHOOSE SUBMIT requirements your MI your to RBAP- Notice Team partner well RBRDFI For BSP No Objection Notice RBAP-RBRDFI coordinates submission of rural banks licensing requirements to the Insurance Commission and then the Bangko Sentral ng Pilipinas (BSP).

17 RBAP Microinsuranc e Website (Online Portal)

18 MI Website Find a MI Product Feature

19 MI Website Request Proposal Feature

20 Partnership Framework Technical Assistance Rural Bankers Association of the Philippines (RBAP) Rural Bankers Research and Development Foundation, Inc. (RBRDFI) Funding Support Luzon Federation Visayas Federation Mindanao Federation Member Rural Banks

21 RUTH ASERON Microinsurance Coordinator RBAP-MABS