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Including Migrants in Inclusive Insurance

Including Migrants in Inclusive Insurance. MIN Network Meeting. June 22, 2016 Barbara Magnoni EA Consultants. EA CONSULTANTS. All migrants’ lives are risky. Limited social networks in host country. Limited access to social services. Deportation. Illness.

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Including Migrants in Inclusive Insurance

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  1. Including Migrants in Inclusive Insurance MIN Network Meeting June 22, 2016 Barbara Magnoni EA Consultants

  2. EA CONSULTANTS

  3. All migrants’ lives are risky Limited social networks in host country Limited access to social services Deportation Illness Unsafe working / living conditions Loss of assets Evacuation / travel costs Injury Disruption or loss of employment Uneven income streams Death Limited education Limited legal protection

  4. Global Picture of Migrants’ Remittances • Most remittances flow from developed to developing countries, and these are more likely to use formal channels • Remittance flows to developing countries approx. US$431 bill in 2015 • Remittance growth is the slowest since the financial crisis (2008/2009) but the number of migrants has peaked to 250 million in 2015 Europe & C. Asia US$42 bill E. Asia & Pacific: US$125 bill MENAUS$53 bill India $70 bill China $64 bill Philippines $28 bill MexicoUS$25 bill S. Asia: US$120 bill S. Saharan Africa US$33 bill LAC US$66 bill Source: World Bank Source: IFAD

  5. The potential for remittance-linked insurance US$440 bill $$$$$$$$$$$$$$$$$$$$$$$$$ 5 Source: IFAD

  6. Potential role for formal microinsurance Home Country Host Country HOME HOST Difficult to link to remittances Can link to remittances HYBRID Either or both countries, covered individuals

  7. Potential role for formal microinsurance Home Country HOME Can link to remittances

  8. Home Model Challenges Inadequate Products • Limited offer • Don’t respond well to most important (or salient) needs Limited or Ineffective Delivery Channels • Lack of strong community ties or networks in-country • Financially excluded • Limited (financial) education Legal, Regulatory, and Political Barriers • Complications of selling and servicing acrossborders • Undocumented status may affect ability to enforce rights HOME

  9. Mexico-US is a well-developed remittance corridor Source: CONDUSEF, Consumer Protection Agency for Financial Services, Government of Mexico

  10. Home Model Example Products • Life and repatriation services Delivery Channels • Banorte Branches (particularly in border towns) • Use the remittance transaction as a touch point for sales Legal, Regulatory • Sell policy to family member in Mexico • Dual policy-holders, on each side of the border HOME

  11. Break the paradigm Home Country Family, migrant b/f departure Host Country HOME HOST HOST Difficult to link to remittances Can link to remittances HYBRID Either or both countries, covered individuals

  12. The Paradigm has Shifted 250 million 12 Source: IFAD

  13. “1 in every 5 insurance clients in Spain are Immigrants” - Axa 2008

  14. “48% of immigrants in Spain have insurance - 31% car, 21% life 19% home” - SegurCaixa 2008

  15. Host Model Success Factors: Example Spain Products • Car • Property • Life and repatriation services Delivery Channels • Marketing 65% below the line (social networks, social media and face-to-face) • Branches of Savings & Loans Coops • Cross sell with full product suite (savings, car loans) • Hire immigrants to offer products Legal, Regulatory • Assimilation and legalization of migrants is critical • Alliances with local service providers • Alliances with consulates HOST

  16. Protect Migrants Before they Leave Home Example: PhilippinoOverseas Workers (OSW) requirements for recruitment agencies Permanent/total disability (7,500) Accidental death (15,000) Natural death (10,000) Repatriation costs in natural or man-made disasters Medical evacuation Compassionate visit home for one family member who falls ill Subsistence Allowance ($100 x month for 6 months) in case of legal problems/litigation Medical repatriation

  17. MIGRANT ≠ REFUGEE

  18. In Sum…think about market size Home (Mexico): USD 60 premium p.a. x 11,700,000 = 702,000,000 10%= USD 70 mill Host (ex. Spain 2008): USD 377 premium p.a. x 4,661,952 = 1,968,166,200 20%= USD 351.5 mill Home/3rd party pay (Philippines): USD 72 p.a. x 10,200,000 = 734,400,000 10%= USD 73.3 mill

  19. In sum… • Host models are easier to scale • Home models face huge delivery hurdles • Vulnerable migrants need more than insurance to reduce vulnerability • Still need significant advocacy with regulators, insurers and other actors

  20. Thank You! www.eac-global.com

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