IRDA proposes to widen microinsurance products and distribution network
PolicyMantra.com, 27 July 2012
In a bid to boost the Indian microinsurance sector, the Insurance Regulatory and Development Authority (IRDA) proposed to widen the product portfolio and distribution network of microinsurance.
On the distribution level, IRDA proposed to widen the landscape by allowing cooperative banks, regional rural banks, primary agricultural co-operative societies and individuals such as shopkeepers, medical store owners, petrol pump owners and public telephone operators to act as microinsurance agents.
On the product level, IRDA asked insurers to consider diversifying the microinsurance portfolio by including saving-linked and health cover features and developing the non-life retail segment of the microinsurance business.
To encourage microinsurance agents to maintain reasonable persistency, IRDA also proposed to link the agent’s persistency rate to remuneration allowed, with a renewal commission of 20% to those agents maintaining persistency rate of 50% at the end of preceding last two financial years.
ADB extends expiring microinsurance grant
The Philippine Star, 22 July 2012
The Asian Development Bank (ADB) has extended its technical assistance of USD 1 million for the further development of microinsurance in the Philippines. The microinsurance project, which was first signed in September 2007, would normally expire in September this year.
The original technical assistance came in three components with the first component focused on improving regulatory framework. The second component was aimed at strengthening the capacity of government regulators and microinsurance providers, while the third and last component was aimed at promoting financial literary on microinsurance.
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CIRC promotes life microinsurance in China
Asia Insurance Review, 24 July 2012
The China Insurance Regulatory Commission (CIRC) is actively promoting life microinsurance across the country and is providing incentives to encourage insurers to offer microinsurance to lower income groups, particularly in the rural areas, according to a statement.
China’s insurance regulator states that following the completion of a four-year pilot project that began in August 2008, microinsurance now covers 24 provinces from an initial number of nine. At the same time, trial microinsurance products have expanded from the most basic accident insurance and term life policy to health insurance. The number of people who are covered by microinsurance has ballooned from 2.39 million in 2008 to 24 million in 2011.
Insurers however are concerned with the onerous cost of building a distribution network to reach remote villages. In order to encourage insurers to offer microinsurance, CIRC is giving them the freedom to determine their own rates and will lower its supervision fees for microinsurance products to help insurers keep their costs low. Another incentive is that insurers who do well in microinsurance will be given priority in opening branches or participating in new schemes.
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New developments in the Zambian insurance industry
UN Microinsurance News, 20 July 2012
Due to recent developments in Zambia’s insurance industry, low-income people are slowly gaining access to appropriate insurance services. In the first half of 2012, two new life insurance products specifically targeting the low-income market were launched. Bantubonse Life Plan, a product by Professional Life Assurance Limited, is a simple and affordable life plan with a minimum one‐off annual premium of ZMK 30,000 (USD 6) for a sum assured of ZMK 1,000,000 (USD 205). Life after Life is the first insurance product ever to be offered in Zambia using a mobile phone platform.
African Life Assurance Zambia (ALAZ) has partnered with MTN Zambia (MTN) to enable MTN customers to buy affordable and convenient life cover for as low as ZMK 1,500 (USD 0.3) per month for a payout of ZMK 1,000,000 (USD 205). Product simplicity and innovative delivery mechanisms characterise the new products with view of improved accessibility and enhanced affordability. Such developments have been triggered by the microinsurance development strategy being executed through a multi--‐ stakeholder Technical Advisory Group and supported by the International Labour Organization (ILO) and FinMark Trust.
For Professional Life Assurance Limited, the decision to invest in microinsurance business was sparked by the findings of a supplier assessment study funded by FinMark Trust. African Life Assurance Zambia also attributed its decision to venture into microinsurance product to the industry‐led development process.
How can we create viable microinsurance markets which don't depend on development budgets or donations?
The Economist Group, 13 July 2012
In a previous article, it was written that in order to get to grips with food security we need better cross-stakeholder partnerships. Let's focus on microinsurance, where a real opportunity exists to bring people out of subsistence farming and into markets.
The two initiatives mentioned in the blog (Kilimo Salama and R4 Rural resilience Initiative) are great, but they're scratching the surface. There is huge unmet demand for microinsurance in Africa. The issue is how to create sustainable, by which I mean commercially viable, insurance markets, so that schemes are self-funding. Because currently, it seems that they aren't - in the case of R4, Swiss Re are donating USD 1.25 million between now and 2015.
Through smart partnerships, involving the right combination of expertise, the right leadership and clever use of mobile technologies, microinsurance in Africa should be economically viable once you hit a critical mass of farmers. But to get there would need Governments actively involved in education and promotion, not to say policies which govern the industry effectively.
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Future Generali launches microinsurance for rural segment in India
The Economic Times, 3 July 2012
Private insurer Future Generali India launched a microinsurance product targeted at the rural segment, to provide protection to their business. The Future Sampoorna Suraksha policy covers a large range of risks such as hospital cash benefit, personal accident, building and furniture, robbery and burglary, crops, agricultural pump set, etc.
"The penetration of insurance in rural markets is dismally low, far lower than the national average of 4% (life insurance and non-life insurance put together). It presents a huge untapped opportunity. We are confident that this comprehensive product and its viable price will make a compelling proposition, which will help our partners attract many first-time buyers who would otherwise stay away", Future Generali India Insurance managing director and chief executive K.G. Krishnamoorthy Rao said.
Kenya’s innovative agricultural microinsurance programme for smallholder farmers wins award
Paepard, 29 June 2012
Kilimo Salama, a partnership between the Syngenta Foundation for Sustainable Agriculture and UAP Insurance, won the Financial Times’ award for Technology in Sustainable Finance, recognising their groundbreaking work to provide smallholder farmers with access to insurance cover using innovative technology and approaches.
Kilimo Salama (Kiswahili for ‘safe farming’) is an innovative index-based microinsurance programme for smallholder farmers in Kenya and the first in the world to use a mobile network-based platform and on-the-ground solar weather stations to provide smallholder farmers with low-cost insurance policies. Kilimo Salama has seen an eventful year marked by severe weather and explosive farmer demand for insurance to mitigate current and future weather risk. It has just completed one of the largest index insurance payouts ever experienced on the continent. They are currently making plans to expand to other countries in the region beginning with Rwanda.