14th International Microinsurance Conference launches
Even before the official opening ceremony, the 14th IMC had got off to a flying start with several pre-conference workshops and a live-streamed press conference.
During the press conference, Shipango Muteto of the Microinsurance Technical Advisory Group (TAG), Zambia, said that insurance products contribute to economic development, that they increase resilience and mitigate risk, and that inclusive insurance seeks to eliminate intergenerational aspects of poverty - but penetration of microinsurance depended on an enabling regulatory framework. Dirk Reinhard, Vice-Chair of the Munich Re Foundation pointed out that in the past 10 years there have been 3,100 natural disasters - climate change is making things worse for people who have no protection. However, the insurance industry cannot tackle insurance penetration on its own, and cooperation between the industry, governments, donors and the media is essential.
Reducing risk will help reduce the cost of insurance, but insurance is part of risk management, it’s not the answer on its own. Microinsurance Network (MiN) Executive Director Katharine Pulvermacher, launching the 2018 State of Microinsurance report, said innovative, affordable microinsurance products can and truly are working for economically vulnerable people around the world, but reach needs to increase urgently. Millions of individuals, families and small businesses risk catastrophic losses on a daily basis because they cannot access insurance. Focusing on IMC host Zambia, she said that progress in the country has been laudable but the momentum should be maintained to cover more ground.
Participants were welcomed during the opening ceremony by Geoffrey Chirwa, Chair of TAG; Thomas Loster, Chair of the Munich Re Foundation and Martin Libinga, Registrar of the Zambian Pensions and Insurance Authority (PIA). Emanuel Pamo, Permanent Secretary to the Zambian Minister of Finance, said that micro, small and medium enterprises (MSMEs) are the real economic drivers, but this group of people is particularly vulnerable. Thomas Loster welcomed the fact that one million people have now access to agriculture insurance in Zambia.
Public and private sector actors such as the Ministry of Finance, the PIA and TAG highlighted some of the key factors for the success of microinsurance in Zambia. These included ensuring that microinsurance is a core part of Zambia’s National Financial Inclusion Strategy, building multiple stakeholder coordination in the microinsurance industry, investing in consumer education and protection and supporting a conducive regulatory environment.
Dr Daryl Collins, co-author of Portfolios of the Poor, presented several case studies which clearly illustrate that people on low incomes need financial tools which help them to better manage their uncertain cash flow and their vulnerability to health, accidents and other risks. A special methodology - the Financial Diaries - developed by Dr Collins and her team of researchers, clearly shows that regardless of how poor an individual is, he or she can manage money over time. But when they are affected by risk, the availability of insurance helps a more efficient management of their cash flow. What’s more, family and friends are more likely to help an affected family after death rather than during illness, which means insurance would make a lot of sense.
The opening ceremony was followed by a plenary session - Why does insurance matter for development? - hosted by the Microinsurance Network and facilitated by Craig Churchill, the Head of the ILO's Impact Insurance Facility. Rowan Douglas, CBE (Willis Towers Watson and Vice-Chair of the Insurance for Development Forum (IDF)) pointed out that insurance is not just an industry, it is an essential institution for society to function well. The insurance sector has a key role in promoting and helping with the achievement of the SDGs, and insurance companies should not see it as simply a matter of CSR, but rather of delivering responsible, effective and inclusive insurance.
Rowan Douglas, Mathieu Dubreuil of the World Food Programme, Shilpi Shastri from Women’s World Banking and Peter Wrede from the World Bank all spoke about the contribution that microinsurance can make to achieving the Sustainable Development Goals (SDGs). Common themes to emerge included the necessity of cooperation and partnerships among all stakeholders, especially by governments which can ensure real transformation at scale. Speakers agreed that insurance as a stand-alone product cannot make a significant impact - it has to be implemented as part of a holistic approach including other financial products, capacity building and financial education. Inclusive insurance is not CSR - it is and should be a scalable, sustainable and effective insurance in which all the partners win. As Rowan Douglas said, insurance is about freedom - freedom to live with security.
Day two - Wednesday, 7 November
Day two of the 14th International Microinsurance Conference (IMC) in Lusaka, Zambia kicked off with a plenary session on the role of digital platforms in inclusive insurance markets, facilitated by Doubell Chamberlain, Managing Director of Cenfri and Chair of the Microinsurance Network. Chamberlain highlighted the emerging digital ecosystem in sub-Saharan Africa - 284 multi-sided platforms already exist in Africa, of which 49 provide financial services and 24 provide insurance. Adrien Lebegue of Zhong An, the first online Chinese insurance platform, said that after just five years Zhong An sells insurance to more than 430 million people. Richard Leftley of MicroEnsure, said that the success of mobile network operators (MNOs) comes from combining trust with payments and that trusted partners are critical for driving inclusive insurance. Amolo Ng’weno from Bankable Frontier Associates in Kenya focused on emerging distribution channels such as micro kiosks and merchants, pointing out that microinsurance can be distributed off the back of these platforms.
The landscape of inclusive insurance in Zambia brought together speakers Lemmy Manje of FinProbity Solutions, Mauwa Lungu of FSDZ and Titus Nkwale from the Zambian Pensions and Insurance Authority, moderated by Shipango Muteto. Three key lessons: the market is dynamic and evolving rapidly; Zambia now boasts a 37% insurance penetration rate among the estimated low- and middle-income population, and insurers have a positive view of the microinsurance sector. Ultimately, as Mauwa Lungu pointed out, consumer education is key.
Indira Gopalakrishna of Equity Insurance Agency in Kenya, Jonathan D. Batangan of Cebuana Lhuillier Insurance Solutions in the Philippines and MK Balachandran of HDFC ERGO GIC Ltd in India came together under the facilitation of Richard Leftley to discuss distribution. Presentations included building disruptive business models to improve insurance penetration in Kenya, making microinsurance matter when it matters the most and distribution beyond mobile using online rural kiosks.
Hosted by MicroInsurance Centre at Milliman’s Michael J. McCord, the session on health microinsurance tackled the successes, failures, and nuances of product development and monitoring processes. Hadil Abdelkader of Axa Life Egypt said success was down to thorough research, personalised product features and improved value perception. Britam’s Saurabh Sharma said learning from failures as a trailblazer in the health sector was vital, while Michael Weilant from Milliman pointed out that a product’s simplicity and relevance is key.
Glenn Harrison of the Center for Economic Analysis of Risk at Georgia State University in the US chaired a discussion on academic research in agricultural insurance with Mame Mor Anta Syll from the University Gaston Berger in Senegal and Bristol Powell from IRI Columbia University in the US. Powell emphasised that reliable data is key for designing reliable index insurance, while Mame Mor Anta Syll said making insurance mandatory in order to get credit tends to be self-defeating.
Marième Ba of AXA Mansard in Nigeria, Indira Gopalakrishna from Equity Insurance Agency in Kenya, Paul Musoke of FSD Africa and Saurabh Sharma from Britam in Kenya took to the stage with the ILO’s Miguel Solana to discuss what insurers are doing to serve new market segments. Key take-aways included the importance of continually adjusting processes and products; engaging and secure customer interactions across all digital touch points; and faster, more tailor-made and collaborative product development.
The importance of partnerships in agricultural insurance was discussed by MK Balachandran, Ashok Shah of Apollo Investments in Kenya and Hailemelekot Teklegiorgis from the Ethiopian Agriculture Transformation Agency - facilitated by Pranav Prashad from the ILO. Partnerships can be a combination of the private sector, development agencies and the public sector but must be built upon the same goals, clear commitment from the parts and mutual respect.
Antonique Koning of CGAP told the session on the business case for customer centricity that customer centricity requires a strategic shift throughout an organisation, while Lorenzo Chan of Pioneer Insurance emphasised the need for employees to buy into the whole customer experience. Microinsurance Master Bert Opdebeeck facilitated a lively discussion which also included Gilles Renouil of Women's World Banking.
The final parallel session on universal health brought together Lydia Dsane-Selby of NHIA in Ghana, Christina Tümmers of BIMA, also in Ghana and Isaiah Okoth of the Kenyan PharmAccess Foundation. Pilot projects on universal health care have shown massive success in Ghana and Kenya, while mobile registration for public insurance has greatly facilitated the process compared to registration at an office with long queues.
Day 2 of the 14th IMC wrapped up with a fascinating plenary session on public-private partnerships (PPPs) in the distribution of agricultural insurance, with Marième Ba, Hailemelekot Teklegiorgis, Humphrey Mulele of Mayfair, Saskia Kuhn from GIZ and Timothy Gotora of the African Risk Capacity Agency - facilitated by Sharon Adhiambo Onyango of the World Bank Group. Lessons learned included: PPPs require strong government lead; a solid political, institutional and legal framework is essential; trust among partners is a key component; do not overpromise and underdeliver; be responsive to both primary and secondary stakeholders; aim for a win-win-win result; finding the right balance of interests and roles takes a long way to go; good support from the field is crucial; keep the needs and perspectives of the end-user in view; manage expectations and keep premiums affordable.
Day three - Thursday, 8 November
The need for cooperation, partnerships and working together for progress emerged strongly on the third and final day of the 14th International Microinsurance Conference in Lusaka, Zambia.
New sources of data were discussed in a session on alternative client data for inclusive insurance. Facilitated by Herman Smit of Cenfri & insight2impact (i2i), Francisco Ceballos of the International Food Policy Research Institute (IFPRI), Belhassen Tonat from Munich Re Africa, Mia Thom of Cenfri and Megan Lawrence of Hollard pooled some key lessons learned from alternative data. These included understanding customer needs in order to design suitable financial products; identifying the needs and wants of Africa’s excluded; understanding the cost benefit of alternative data and how it can make insurance more affordable and accessible; and how to use alternative data without violating consumers’ right to privacy.
The session on insurance to support MSME development was facilitated by Cenfri’s Jeremy Gray and heard from Gregor Sahler of GIZ, Maroba Maduma from SA Taxi in South Africa and David C. Muchiri of the Equity Insurance Agency, Kenya, about the risks and vulnerabilities of MSMEs.
How to reach smallholder farmers through contract farming was discussed by Agrotosh Mookerjee of Risk Shield Ltd, Milimo Mdimba of NWK AgriServices, Joseph Saiti from the Malawi Oilseeds Sector Transformation and Saskia Kuhn of GIZ. Why can’t we deliver incentives instead of pushing farmers into contract farming - microinsurance, for example, is one of the best incentives for contract farming. Contract farming cannot be applied everywhere, but it has a lot of potential in many countries and sectors such as the cotton market in Zambia.
The World Bank-hosted session on consumer oriented education in Ethiopia, facilitated by Craig Thorburn, heard from South African actuary Janice Angove and Milliman’s Michael J. McCord. Key takeaways included abandoning preconceived ideas of what will work best and what clients need - every country, culture and environment is different. The regulatory environment is as important as the administrative process and all partners must show the same commitment for the same time.
The thorny question of how to make microinsurance commercially viable when the donor money runs out was tackled by Amir Nafie of Egypt’s Lead Foundation, Mario Wilhelm from Swiss Re, Hans Ramm from the Swiss Agency for Development and Cooperation (SDC) and facilitator Shilpi Shastri of Women’s World Banking. The session illustrated a very successful partnership between a technical assistance provider, a microfinance institution, a donor and a reinsurer. Lessons learned included making sure the donor had feasible objectives and that every new product has to be embedded in the insurance value chain.
Synergies between macro- and micro-level insurance were explored by Richard Kyuma of the Kenya Livestock Insurance Program (KLIP), Mathieu Dubreuil from the World Food Programme (WFP), Timothy Gotora of the African Risk Capacity Agency Secretariat and facilitator Raúl Fernández from the Munich Climate Insurance Initiative. Hosted by the Microinsurance Network and InsuResilience, the session heard how government macro-level insurance schemes and individual micro-level insurance must be aligned in order to achieve maximum impact.
The session on Credit Life heard how consumers have to perceive insurance products as a game changer in their life and see it as a way out of their poverty trap in order to buy into it. Peter McPherson of FijiCare Insurance Ltd, Monirul Hoque from BRAC, Oliver Ullrich of Allianz X and facilitator Denis Garand agreed that educating consumers about the benefits of insurance is key.
Agricultural insurance was again under the spotlight in a session on scaling agri-insurance: insights from research with Berber Kramer from the International Food Policy Research Institute, Rahab Kariuki of ACRE Africa, Nathaniel Jensen from the International Livestock Research Institute and facilitator James Hansen from the International Research Institute for Climate and Society (IRI). Their recommendations included getting the right mix of partners from research, government, insurances and agribusiness; starting small; and acting based on evidence.
The IMC came together for a plenary on InsurTech: Rising to the regulatory challenge facilitated by Craig Thorburn. Tonat Belhassan of Munich Re Africa warned that if we don’t disrupt the insurance industry ourselves, it will be disrupted by someone else, while Elias Omondi of IRA advocated making change part of the culture and ensuring proper coordination between the regulator and innovators. Regulators have a big role to play to ensure a stable market, said Hannah Grant of a2ii. There are opportunities for businesses and investors, but consumers must be protected. Customers want to understand what they are buying and how it will add value to their lives.
The IMC wrapped with presentations by Hollard’s Pravin Kalpage on Inclusive Insurance 2030 and the evolution of mobile microinsurance by Rishi Raithatha of GSMA. Raithatha pointed to the opportunities for further growth but warned the insurance industry needs to address the challenges of maintaining sustainable revenue, education and awareness. Kalpage reiterated that trust is an issue.
Key findings and common threads from the conference, pulled together by consultant Maria-Victoria Saenz, included the Zambian success story - in 10 years the country has evolved from a one product industry with few insureds to a diversified industry with more than two million insured.
When it comes to development, microinsurance matters a lot - it is an important tool for the achievement of some of the SDGs and there’s a clear need for insurance to boost consumption and aid in cash flow management. Partnerships are all-important, whether public-private or private-private. Technology is both a solution and a challenge.
Nishith Kumar Sarker, Secretary General of the Bangladesh Insurance Association looked forward to next year’s conference and hoped to see participants there. Shipango Muteto, Chair of the Organising Committee, said he hoped to see six million people covered by inclusive insurance in Zambia by 2022, while Doubell Chamberlain reflected on changing times - the key is to pursue value and scale together: progress will be faster if all stakeholders work together. Finally, Dirk Reinhard Vice-Chairman of the Munich Re Foundation closed the 14th IMC by reminding participants of the importance of cooperation and thanking all organisers and all speakers.
See you all in Bangladesh in 2019 for the 15th IMC!