Insurers adapt to changing climate in the Philippines
Microinsurance Philippines, 28 February 2011
Amid forecasts of a stormy summer, the insurance industry is gearing up to provide the public with better protection from typhoons and floods after the devastation wrought by Ondoy and Pepeng in 2009.
Non-life insurance typically only provides coverage from accidents and theft for cars and fire and lightning for property. Protection from damage caused by natural disasters such as typhoons, floods and earthquakes is not included.
An estimated 75% of all property losses caused by typhoons Ondoy and Pepeng were uninsured, said Lacson & Lacson Insurance Brokers, Inc. managing director Salvador L. Lacson. Since then, awareness has spiked, Mr. Lacson added.
But this awareness may be short-lived given the additional costs. While rates may vary among different insurers, annual premiums usually cost 1% of the value of the property.
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Panel to define microinsurance products in Nepal
República, 19 February 2011
Insurance Board (IB) has formed a taskforce to define and identify ways for implementing microinsurance products that target rural and low income groups, aiming to widen and deepen insurance services in the country. The taskforce was formed after insurance companies refused to implement the board´s instruction of adding at least one microinsurance product in their products portfolio.
The board about a month had issued the directives, asking both the life and general insurance companies to unveil products to tap business potentials of the groups that have so far remained out of the insurance business net. The taskforce will also identify sectors and target groups wherein the companies can launch microinsurance products. The taskforce has also been asked to suggest the delivery channel and claim settlement procedures so that due insurance obligations could be fulfilled effectively.
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Kilimo Salama expands to protect Kenyan farmers
EurekAlert!, 25 February 2011
With Kenyan farmers increasingly fearing massive weather-related losses, UAP Insurance, Syngenta Foundation and mobile operator Safaricom announced today a major expansion of Kilimo Salama, an innovative and affordable crop insurance programme that will now cover the expected value of farm harvests, more crops and many more farmers against drought and flooding, while also protecting against livestock losses.
The new programme, called Kilimo Salama Plus, builds on the original Kilimo Salama Kiswahili for "safe farming" which was launched last year. It uses a low-cost mobile phone payment and data system that is linked to solar-powered weather stations to issue an insurance policy and rapidly compensate farmers for investments in seeds, fertiliser, and other inputs that are lost to either insufficient or excessive rains.
Kilimo Salama Plus retains this innovative approach while expanding from the initial focus to go beyond just inputs to give farmers the opportunity to insure the value of their harvest. In addition, due to high demand, farmers can now insure a wider array of crops including maize, wheat, beans, and sorghum.
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Government tampering could endanger Ghana's healthcare system
Development and Cooperation, February 2011
Ghana is a politically stable country in the midst of unstable West African neighbours. It is also ahead in terms of healthcare. A national health insurance scheme was started in 2004; premiums are affordable; the catalogue of services measures up to Western standards.
The first self-help groups started forming in the 1990s, which was the birth of health microinsurance schemes. In 2004, the health ministry adopted the concept of the self-help groups and expanded it into a countrywide system of state-funded health insurance. Various microinsurance schemes were bundled into national programmes. The government, moreover, established a microinsurance programme of its own in places where there were no self-help groups. By 2009, more than 61% of Ghanaians had health insurance coverage – a breathtaking rate by African standards.
Andreas Grüb of the Centre for International Migration and Development (CIM) says the policy has been a remarkable success. "We never thought that we might develop a successful model for a nationwide healthcare system from small self-help groups," he says. But he fears for the future. "The system’s long-term solvency is at risk," he adds. "The government has already had to intervene on a broad basis. Three-quarters of the budget comes from taxes. A mere 38% of the members pays premiums, and many are covered by other persons’ policies at no charge, for instance children or the completely destitute." The risk pools of small self-help groups are too small to shoulder such costs. Their revenue tends to lag behind their expenses.
In 2008, several of the health microinsurance schemes ran into financial difficulties at the district level for the first time. Nonetheless, Grüb reports, plans are still afoot to further expand the already substantial services covered by the insurances. Poor understanding of how commercial insurances operate – not so much among the self-help groups as in the government – is undermining the schemes, he warns.
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Manulife looks to replicate Vietnam activities in the Philippines
Business World Online, 22 February 2011
Manulife Philippines is set to venture into the microinsurance business and be the first foreign insurer to do so in the Philippines. They are looking to replicate their business in Vietnam after seeing the income potential of selling cheap insurance products to low-income Filipino households.
David Wong, senior vice president of the mother company Manulife Financial, said that the sale of microinsurance was one of the strategies to be adopted by its Philippine office in order to seek further revenue growth.
Manulife’s microinsurance activities in Vietnam have so far been profitable and they expect the same from the Philippines given the large room for growth in the microinsurance sector.
Manulife is considering to sell microinsurance products through the help of NGOs, whose beneficiaries might also serve as clients of Manulife and mutual benefit associations (MBAs). They are also open to the idea of selling its products to poor households through convenience stores and post offices.
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Islamic insurance light at the end of the Egyptian crisis tunnel
The Lebanese Daily Star, 15 February 2011
Tokio Marine Middle East, an Islamic insurance services provider, sees an opportunity to expand its business in Egypt following the recent political turmoil, the company’s chief executive, Ajmal Bhatty, told Reuters. Islamic insurance, or takaful, is already seeing demand in Egypt and the recent demonstrations will highlight the need for financial protection.
"The awareness for insurance, especially personal insurance is generally low in regional markets including Egypt," Bhatty said. "Events such as the recent ones generally result in increasing the awareness in people that they need to do more about protection of their livelihood and assets."
Tokio Marine is also considering launching microtakaful operations in Egypt to complement microfinance programmes already available. As part of a micro-credit scheme, a small amount goes to cover areas such as life, disability and accident insurance, as well as livestock cover or crop insurance against hazards of severe weather or flooding.
Bhatty said the company has already successfully provided conventional microinsurance in India through a joint venture with a Japanese fertiliser company. "We would like to explore microtakaful possibilities for Egypt as a good proportion of the society would benefit from it."
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New micro health insurance product in Colombia
MicroCapital, 8 February 2011
Liberty Mutual, a US-based insurance provider that has subsidiaries across Asia, Europe and Latin America, has recently started offering health insurance policies to poor people in the slums of Barranquilla, Columbia.
The health insurance product offered by Liberty Mutual in Columbia costs COP 3,000 (US$ 1.60) per month and provides coverage of approximately COP 3.7 million (US$ 2,000) in the case of serious illness. Liberty Mutual also addresses the challenge of collecting premiums by working with the local gas company to include insurance premiums on the client’s natural gas bill. According to a sales representative of Liberty Mutual in Colombia, the quick settlement of claims by the company in the event of death of the insured has encouraged more people to sign up.
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Thai insurance company separates business into two divisions - public and commercial
Bangkok Post, 4 February 2011
Dhipaya Insurance plans a greater focus on retail customers and microinsurance and will recruit more investment specialists to manage its THB 10.5 billion (US$340 million) worth of investment assets to ensure higher yields.
Somporn Suebthawilkul, the newly appointed managing director of the general insurer, said its business would be separated into two divisions - public service and commercial service.
The public service division will market affordable microinsurance and other policies to retail customers with the aim of providing coverage and financial security to Thais. The commercial service division, meanwhile, will focus on profitability through corporate clients.
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Insurance Commission approves microinsurance performance standards in the Philippines
Business World Online, 31 January 2011
The Insurance Commission (IC) in the Philippines has approved the performance standards that will govern the microinsurance industry.
These performance standards dictate how insurance companies, cooperative insurance societies and mutual benefit associations providing microinsurance products and services will be evaluated and monitored by the IC.
Insurers will be evaluated and monitored according to standards or indicators grouped under the acronym SEGURO, which stands for: Solvency and stability; efficiency; governance; understanding of the product by the client; risk-based capital; and outreach.
According to the report, the risk-based capital, solvency and stability indicators will be applied to insurers’ total operations, while the others will be applied only to their microinsurance operations.
Click here for more information on the approved standards and indicators
Max Bupa introduces microinsurance product in India
Money Life, 31 January 2011
Max Bupa Health Insurance, a joint venture between Max India and UK-based Bupa group, has launched 'Swasthya Pratham Micro Insurance Plan', a group health insurance cover for the economically vulnerable sections of Indian society.
The plan provides health insurance cover to suit the needs of these groups in the rural and semi urban areas and aims to protect themselves, their spouse and children. The sum insured ranges from INR5,000 (US$109) to INR30,000 (US$660) for individuals and INR10,000 (US$220) to INR30,000 for family floater policies. This product is offered in Bihar, Rajasthan, Madhya Pradesh and West Bengal and in subsequent years, will be extended to other parts of the country .
NIC encourages microinsurance in Ghana
Business and Financial Times, 29 January 2011
The National Insurance Commission (NIC) in Ghana has encouraged insurers to introduce microinsurance to a much wider segment of the population. Mr. Simon Nerro Davor, Deputy Commissioner, NIC, in an interview pointed out that this segment has an average annual disposable income that is far below income earned by rural dwellers.
Importantly, the regulator wants to encourage traditional insurers as well as other organisations, such as government agencies and rural banks to offer low cost insurance products to this vast uninsured segment of the population. Ghana’s largest life insurer, SIC Life is already offering micro-life insurance policies, with about 12 million already on their books.
Ghanaians are keen to utilise international experience and have organised conferences in the collaboration with the German Technical Cooperation (GIZ) and the participation of all stakeholders and insurance experts as well as many local insurance people.
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