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2007 General Meeting Assemblée générale 2007 Montréal, Québec Denis Garand Denis@garandnet

Canadian Institute of Actuaries. L’Institut canadien des actuaires. 2007 General Meeting Assemblée générale 2007 Montréal, Québec Denis Garand Denis@garandnet.net MICROINSURANCE IP-31. Millennium development goals. ERADICATE EXTREME POVERTY AND HUNGER UNIVERSAL PRIMARY EDUCATION

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2007 General Meeting Assemblée générale 2007 Montréal, Québec Denis Garand Denis@garandnet

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  1. Canadian Institute of Actuaries L’Institut canadien des actuaires 2007 General Meeting Assemblée générale 2007 Montréal, Québec Denis Garand Denis@garandnet.net MICROINSURANCE IP-31

  2. Millennium development goals • ERADICATE EXTREME POVERTY AND HUNGER • UNIVERSAL PRIMARY EDUCATION • PROMOTE GENDER EQUALITY AND EMPOWER WOMEN • REDUCE CHILD MORTALITY • COMBAT HIV/AIDS, MALARIA AND OTHER DISEASES • ENSURE ENVIRONMENTAL SUSTAINABILITY • DEVELOP A GLOBAL PARTNERSHIP FOR DEVELOPMENT

  3. Importance of Microinsurance In its first report, Insuring for Sustainability, the Insurance Working Group of the UNEP FI ranked nine global sustainability issues identified as vital for insurers to address. Topping the list is climate change, followed by microinsurance, lifelong income, health, emerging man-made risks, environmental liability, natural resources, recycling and internal resource efficiency.

  4. Microinsurance market • 3.0 billion earn less than $2 (US) a day • 1.3 billion earn less than $1 (US) a day • 72% of the world population has income below $3000 a year Source: World Bank

  5. Micro Finance • Founded by Muhammad Yunus (Grameen Bank in Bangladesh) • Lending without collateral • Doorstep service • Small payments • Impact on 110 million poor • Spandana

  6. What is Microinsurance? • Living without insurance! • Part of solution to lower poverty. • Can Microinsurance be viable?

  7. Who’s involved • ILO • CGAP • World Bank • Other agencies • Insurance companies world wide • 5 out of 10 actuaries Canadian!

  8. Poverty and Microinsurance • 100,000,000 become poor, each year, due to a lack of protection. (WHO 2005) • Does the world have the correct priorities? • Health care cost Rwanda $200 million • War in Iraq $150 billion

  9. Reasons for Decent into poverty

  10. Why do people save or borrow - UGANDA Source: “Preliminary” findings from FinScope Survey (2007)

  11. The cycle of poverty • Most poor are very resourceful • Major disaster, sell all assets • Poverty is a cash flow management problem

  12. Microinsurance in the world • Credit life (40 million and viable) • Accident insurance • Life insurance • Health (25 million and few are viable) • Assorted general insurance and crop protection • Household goods (hut) • Weather insurance

  13. Why micro health insurance? • Principal reason for loan default for a MFI – health • To maintain economic situation – does not reduce poverty • Improve access • To enhance overall productivity • Problem in USA, India, Cambodia, etc.

  14. What are the challenges? • High mortality, morbidity, assets at risk • Low administrative margins • Ability to pay small amounts • Transform your insurance organization

  15. Successful micro insurance (or lesson we need to relearn) • Local organization (distribution) • Brand name • Clear communication, one page contract (pictorial) • Target high participation • Efficient premium collection • Link with other services

  16. Successful micro insurance (2) • Clearly defined products • Rapid service • Community verification of claims • Health • Appropriate treatment protocols • Health promotion and prevention • Data base to help manage • Underwriting the community and insurance

  17. Other forms • Microtakaful

  18. Key to micro insurance success • Distribution system • Affordable quality care • Efficient management

  19. What you can learn • Creating efficient organizations • Creative solutions • Understand real service issues • Development opportunity for your staff • TRANSFORM YOUR UNDERSTANDING OF INSURANCE AND MANAGEMENT

  20. Learn more • www.microinsurancefocus.org • www.ilo.org/gimi • www.munichre-foundation.org

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