Micro insurance: Reaching the Masses at Grass Root Level- The CARD MBA Experience

Transcription

1 Micro insurance: Reaching the Masses at Grass Root Level- The CARD MBA Experience Dr. Jaime Aristotle B. Alip Chairman and Managing Director CARD- Mutually Reinforcing Institutions 17 th ICDC Congress Hotel Cinnamon Grand, Colombo, Sri Lanka October 1, 2013

2 Poverty and Vulnerability 27.4 M families live under poverty threshold and 1 out of 3 Filipinos is considered poor (NSCB, 2013) 44% of the population live on less than US$2 a day and 14% on US$1 a day or less (WB, 2007) The poor is vulnerable to risks, i.e, life cycle needs and unpredictable risks such as illness, death, theft, natural & man-made disasters (Llanto et al., Microinsurance in the Phils: Policy and Regulatory Issues and Challenges, 2007)

3 The Poor has Limited Access to Insurance Insurance Density (Per capita expenditure): PhP or US$ 18.8 Life - PhP or US$ 13.8 Non-Life - PhP or US$ 5.0 Insurance Penetration (Premiums as % of GDP): 1.02% Estimated Life Insurance Coverage: 13.90% (Insurance Commission, 2009)

4 Sharing with you the CARD story CARD was established in December 1986 Twenty peso bill Old typewriter

5 CARD Mutually Reinforcing Institutions Mga Institusyon sa iisang Misyon

6 Geographical presence of CARD MRI Partnership Program with TYM in Vietnam since 2005 First International NGO Office in Cambodia since 2006 Partnership Program in Indonesia since February 2008 Partnership Program in Myanmar started 2012 Partnership Program in Hong Kong since 2007 NGO office in Laos starting 2009 More than 1,400 Offices all over the Philippines since 1986

7 July 2013 Number of Clients: 2, 045,217 Number of Insured Individuals: 8,671,300 Clients (incl. Savers): 1,934,775 Offices: 1,440 Loan Clients: 1,583,236 Total Assets: Php14.4B Loan Outstanding: Php7.3B Total Liabilities: Php10.5B Savings: Php5.3B Total Equity: Php3.81B Repayment Rate: 99.35% Operational Sufficiency: % Staffing: 8,446 Financial Sufficiency: % *1USD=Php41

8 CARD MBA is a member of CARD Mutually Reinforcing Institutions

9 CARD MBA is a Microinsurance Institution An activity providing specific insurance, insurancelike and other similar products and services that meet the needs of the low-income sector for risk protection and relief against distress, misfortune and other contingent events. (Regulatory Framework for Microinsurance, IMC No ) Basic Features: Simple product design ; Low amount of premiums/contributions; Policy contract easily understood by clients; Straightforward and uncomplicated documentation; Frequent collection of premium/contribution that coincides w/ the cash-flow of the insured; Fast and timely payment of insurance claims.

10 CARD Mutual Benefit Association, Inc. Mission Statement CARD MBA is a mutual benefit association formed: to promote the welfare of marginalized sector; to extend financial assistance to its members in the form of death benefits, health care, retirement savings, loan redemption and other non-financial services; and to actively involve its members in the direct governance of the Association including formulation and implementation of policies and procedures geared towards sustainability and improved services.

11 CARD Mutual Benefit Association, Inc. How Microinsurance Works? R E S O U R C E S DEATH or SICKNESS Without Microinsurance (+) 0 (-) TIME

12 CARD Mutual Benefit Association, Inc. How Microinsurance Works? R E S O U R C E S DEATH or SICKNESS With Microinsurance as SAFETY NET. 100 K (+) 0 (-) THIS PORTION WILL BE LEFT FOR THE BENEFICIARY TIME

13 Products and Services Continuous offering of innovative products and services to level or move ahead with the increasing competitive market of microinsurance. 1. Life Insurance Program - Accidental Death - Hospitalization Benefit -Motor Vehicular Accident - Refund of Contributions - Total & Permanent Disability 2. Retirement Savings Fund Mandatory Exit Age at 70 Optional Retirement at ages 65, 66, 67, 68 & Loan Redemption Fund Amount of benefit = Principal amount of loan Automatic Loan Offsetting upon Total & Permanent Disability [AUTO-LOAD] All rights reserved CARD MBA 2012

14 Products and Services 4. Package Assistance in Case of Disaster (PAID) Plan Personal Accident Funeral Benefit Re-house (Residential Insurance) 5. Build-Operate-and-Transfer Program Transfer of MBA Technology

15 Products and Services 1. Catastrophe Reinsurance 2. Crop Insurance Crop Assistance Program 3. Health Insurance 4. Funeral Benefits

16 How can mutual insurance live up to its true potential? CARD MRI DISASTER RELIEF ASSISTANCE PROGRAM MASS WEDDING SCHOLARSHIP PROGRAM

17 CARD MRI s DISASTER RELIEF ASSISTANCE PROGRAM Without additional member s contribution, relief goods are given to all membervictims of natural disasters like: a. Earthquakes e. Fire b. Floods f. Typhoon c. Landslide d. Volcanic eruption 17

18 THE RESULTS YEAR MEMBERSHIP 28,531 35,704 49,887 69, , , , , , ,934 CLAIMS PAYMENT (Php 000) YTD CUMULATIVE FUND BALANCE (Php 000) TOTAL ASSETS (Php 000) , , , ,244, ,676, ,433, , , ,583, , , ,

19 NUMBER OF INSURED INDIVIDUALS 20% Contribution in the Overall Insured Filipinos 80% Insured in other companies

20 Key Success Factors

21 Key Success Factors Focus on the economically challenged women The Nanays are our center of existence Member s ownership Weekly Center Meeting

22 [ Key Success Factors day Target Model in Claim s Settlement 1 3 If the dead body is already buried at the time of validation and with complete documents, the claim must be settled within three days upon notification. If the dead body is not yet buried at the time of validation, the claim must be settled within 24 hours upon notification. 5 On the 5th day upon notification, all claims must be given action with finality. Claims with incomplete documents will be given denial letter but still can be settled upon completion of required documents thru the letter of reconsideration. This Claim Settlement Model is replicated by at least ten (10) organized groups providing formal or informal microinsurance program to their member-clients

23 Key Success Factors CARD MRI Networks Assist in the weekly collection thru Center Meeting Assist in the Information Education Campaign MBA Coordinators Assist in the claims settlement General Membership CARD MBA is 100% owned by the Members The Board of Trustees is composed of members elected by the general membership

24 Key Success Factors Culture of listening to members voices and innovating to meet their needs

25 How can mutual insurance live up to its true potential? The Insurance Code of the Philippines contains provision on mutual benefit associations (MBAs) which is not present in other countries. Built strong relationship and continuous collaboration with the regulators in terms of policy advocacy and enhancement of products and services that would fit the needs and demands of the marginal sector.

26 How can mutual insurance live up to its true potential? CARD MRI assisted in the establishment of RIMANSI so we can share our MBA experience and together build the microinsurance industry in the Philippines. And with the help of Canadian Cooperative Association (CCA), CARD MRI and Rimansi were able to disseminate the MBA technology in Vietnam, Cambodia, Indonesia and other parts of Asia.

27 Thank you! All rights reserved CARD MBA 2013