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Adie 20 years of activity

Adie 20 years of activity . 53 000 business financed 63 0000 new job created Success ratio for companies over a 2 year period: 65% 22 000 active clients Portfolio: 41 405 465 € Portfolio at risk: 11%. Products and services . Micro-insurance.

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Adie 20 years of activity

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  1. Adie 20 years of activity • 53 000 business financed • 63 0000 new job created • Success ratio for companies over a 2 year period: 65% • 22 000 active clients • Portfolio: 41 405 465 € • Portfolio at risk: 11%

  2. Products and services Micro-insurance

  3. Why did Adie decided to launch micro-insurance? • Adie interviewed 600 new entrepreneurs, and concluded that: • 1- The great majority of these microentrepreneurs, especially vulnerable to risk, do not benefit from adequate insurance coverage, posing a serious risk to their vocational activity. • 2- one fourth of them initiated their activity without insurance, due to: • -faulty analysis of their need by insurance companies and unfitted products • -cost • -lack of access to insurance (denial by insurers) • Moreover, for those who started out with insurance, 60% dropped out. • The micro-insurance product was specially designed in order to facilitate access to insurance for this vulnerable population, with a view to simplifying insurance contracts and pricing. An underlying objective is to educate them regarding insurance and its operation.

  4. The 4 micro-insurance’s products • “I have a locale” for microentrepreneurs establishing themselves at a specific site. It covers: • - The site and vocational equipment • - Damages caused by the existence or exercise of the activity • - A financial guarantee in case of cessation or reduction of activity due to an accident or illness • “I work at home” for those who work at home and/or keep their vocational equipment there. It covers: • - Private and vocational equipment • - Damages caused by the existence or exercise of the activity • A financial guarantee in case of cessation or reduction of activity due to an accident or illness • Coverage of «vehicles and carried merchandises » : • - The basic premium is the same regardless of the vehicle. • - Merchandise in transport is covered up to €3,000... • Coverage of «construction» • - mandatory for building contractors. • - Very difficult to cover on the regular market for someone starting a new enterprise, given the absence of a track record

  5. How did we start with micro insurance? • 1- Partnership with AXA and MACIF, who designed a casualty insurance scheme • 2- Recruitment of a specialist in insurance • 3- An experiment has been conducted since mid-2007 in four Regions. All employees have been trained to micro insurance and products. • => What do we do to develop micro insurance? • - offer micro-insurance and its financing: loan agents propose the insurance, postponing the premium up to ten months. This postponement is facilitated by a microcredit provided by Adie • - inform clients about insurance • help in fulfilling contracts and ensuring that the insurance contracted is always appropriate • accompany the insured in his or her claim

  6. What were our main difficulties? 1-Law: which does not allow us to be insurers 2- The necessary mutualization of numerous risks in order to cop with different losses 3- Adie’s staff fear to sell a new product 4- Insurers’ fear of face to face with our clients

  7. The main results in 2008

  8. The main lessons learnt 1- Partnership with existing insurers => a win/win partnership : They bring their expertise and we know the needs of people and how to work with them: - the microfinance institution sticks to the essence of its vocation, protects its clients and at the same time improves its credit risk - the insurer discovers a new clientele, thus opening a new market. 2- Taking the time to define the needs of its clients in order to propose a product that is simple and adapted to the institution’s clients 3- How crucial is the training our teams in both insurance and its usefulness to the entrepreneurs.

  9. the impact of micro-insurance on microcredit activities? • Micro-insurance contributes to the goal of covering the cost of financial services: • - Strengthening the position of its clients ensures an improved credit risk for Adie; • - By income generated by microcredit contracted by clients to pay the insurance premium; • - Micro-insurance is a product with additional appeal making it possible to reach more clients.

  10. The perspectives • The insurers and Adie both have to invent a new economic model . The project’s success depends on achievement of financial balance by the two parties. • A study defining the economic model, carried out at the end of 2008, showed it is possible for us to create a sustainable tool. Indeed: • - Our clients offer the insurers an acceptable risk, • - 1,500 new clients and 4,500 active clients would enable the insurers and Adie to cover their costs. • The first indicator should be reached at end-2009, • while the second should be achieved in 2010. • =>Adie is going to spread micro-insurance in every agency before the end of june 2010

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