Microcredit crisis in India: What is Allianz doing?
Allianz website, 15 December 2010
India’s microfinance industry has gone into its first crisis and many poor families cannot repay their loans. Allianz microfinance expert Michael Anthony explains in an interview why this is happening and why there is little impact on microinsurance.
Read full interview
China Life aims to increase its rural outreach
Trading Markets, 10 December2010
Beijing-based China Life has won the regulatory approval to further expand its rural microinsurance pilot programme to five more Chinese provinces and autonomous regions, aiming to realise 250 million Yuan (US$38 million) microinsurance premium income in 2010.
The life insurer is required to explore and strengthen the microinsurance business model applying to the low-income group in both economically well-developed districts and minority districts in those provinces and autonomous regions, and then report to the commission on a timely basis, said the CIRC in a statement.
China Life earlier said it has targeted to provide coverage for 10 million people through its microinsurance business in 2010. According to the poverty standard of China, there are around 36 million poor who need to have basic protection for living, and most of them are located in the central and the far west parts of the country, according to China Life.
Since August 2008 to December 2009, China Life said it has accumulatively provided rural microinsurance coverage to around 10.54 million policyholders. During January to September 2010, the insurer has provided various individual life microinsurance products to 11.48 million policyholders in rural districts.
Task force set up to develop microinsurance in Pakistan
Business Recorder, 8 December 2010
The Securities and Exchange Commission of Pakistan (SECP), regulator of the insurance industry, is fully cognisant of its responsibility to develop the microinsurance industry and in this regard, SECP have set up a 16-member task force. This task force, which is supported by the Center for International Private Enterprise, comprises of major stakeholders in the insurance industry including representatives from the SECP, the State Bank of Pakistan, insurance companies, microfinance banks, Insurance Association of Pakistan, Pakistan Microfinance Network, Kasha Foundation, and National Rural Support Programme.
Headed by the SECP Executive Director (Insurance), the task force has been divided into three subgroups, focusing on their respective areas including the development of regulatory framework for microinsurance, discussing the feasibility of a viable and specialised microinsurance companies and recommending sustainable business model for microinsurance business.
The task force met at the beginning of December in Karachi to compare notes on a proposed regulatory framework and sustainable business models for delivering microinsurance. In Pakistan the insurance penetration is a mere 0.7% of the GDP, this initiative is expected to help in creating a transparent and enabling environment thereby increasing the insurance density and affordable outreach to low-income people. The task force will next meet in a month's time to discuss the findings of subgroups.
Read full article
Can insurance help halt climate change?
TreeHugger, 2 December 2010
Insurance isn't the first industry people think about when talking about business and climate change. Yet from moving to pay-as-you-drive car insurance, to discounting LEED-certified buildings, we have already seen a number of ways that insurance companies can reward sustainable practices. Given the likelihood of more destructive weather as the climate warms, it is in the industry's best interests to tackle this problem now. But incentivising low carbon behaviour is just one way that insurers can help.
Forum for the Future, a UK-based think tank, has just released a new set of recommendations detailing ways that the insurance industry can respond to the challenge of climate change. The report outlines eight specific strategies that could play a crucial role in shifting our entire economy to a lower carbon trajectory.
Beyond simply offering rewards and incentives for lower carbon behaviour, or changing payment models to include externalities, the report also suggests the industry should look at new ways to communicate climate risk. Crucially, the report urges insurers to find better ways to insure those most vulnerable to climate change by either shifting aid toward insurance for future climate disasters, as opposed to retroactive disaster relief, or by finding ways to pool risk through microinsurance.
Read full article
CIC unveil new premium remittance platform in Kenya
Ratio Magazine, 29 November 2010
In a bid to increase insurance penetration, CIC Insurance has launched M-Bima, an insurance premium payment instrument that rides on mobile money transfer platforms such as M-Pesa. Policy holders with CIC Insurance will now remit as little as KES20 ($0.25) premium payment through their cell phones. CIC has already signed up with Safaricom’s M-Pesa and is in the final stages of securing partnerships with other mobile money transfer platforms such as Yu-Cash, and Airtel’s Zap/Airtel Money.
"This is one of the solutions to the challenges involved in penetrating the low-income market and developing cost efficient insurance distribution and payment mechanisms," said Nelson Kuria, the CIC Managing Director.
CIC customers will now visit ‘pay bill’ on M-Pesa, dial in the business number of their specific insurance product followed by the individual account or policy number to remit their premiums free of charge. Clients also will get regular SMS updates on their policies.
Mr Kuria explained that the success of any microinsurance product depended on whether the premiums are designed to accommodate the policyholder’s irregular cash flows, choice of distribution channels that can manage the entire customer relationship, as well as policies that carry limited screening requirements that have kept customers away in the past.
Read full article