Report International Conference on Inclusive Insurance 2020 Digital Edition

Edited by Zahid Qureshi and Dirk Reinhard Report International Conference on Inclusive Insurance 2020 — Digital Edition

Conference documents and This report is the summary of the Inter- presentations are available online: national Conference on Inclusive Insur- ance — Digital Edition, which took place from 2 to 6 November 2020. Individual summaries, in various styles, were contributed by a team of international www.inclusiveinsurance.org rapporteurs. Readers, authors and organisers might not share all opinions expressed or agree with the recommendations given. These, however, reflect the rich diversity of the discussions.

Over 70 speakers participated in the conference. Report International Conference on Inclusive Insurance 2020 — Digital Edition 1

Contents

1 Contents 31 Agenda 61 Agenda 2 Foreword Day 3—4 November 2020 Day 5—6 November 2020 3 Acknowledgements How to reach scale and develop Lessons learnt and next steps 4 Participant overview inclusive insurance markets 62 Session 16 5 Agenda 32 Session 8 Technology driving Day 1—2 November 2020 Integrated risk inclusive insurance Inclusive insurance management solutions amidst a pandemic 65 Session 17 36 Session 9 The ups and downs of 6 Session 1 How digitisation can inclusive insurance: Opening of the conference — spur market growth Learning from experience The landscape of inclusive insurance 2020 39 Session 10 68 Session 18 Lessons learnt from Outlook: What will be the next 9 Keynote national strategies milestones in the development of inclusive insurance/closing 11 Session 2 42 Session 11 the insurance gap? Inclusive insurance Leveraging sovereign responses to Covid-19 insurance to build scale 72 Registered organisations 76 Acronyms 14 Session 3 45 Agenda 77 Imprint Pricing insurance in the D ay 4—5 November 2020 midst of a pandemic New products and solutions to increase insurance outreach 17 Agenda Day 2—3 November 2020 46 Session 12 Inclusive insurance Insurance from a distance: against climate risks Using remittances to increase protection 18 Session 4 Public private partnerships 49 Session 13 for inclusive insurance Developing insurance against climate risks: markets for MSMEs What works and what does not? 52 Session 14 22 Session 5 Innovative distribution models — The role of mobile in scaling High touch vs. low touch: index insurance Is face to face really necessary?

25 Session 6 56 Session 15 Macro, meso, micro: Analysing the client value of Practical experiences at all levels hospital cash products of parametric insurance

29 Session 7 Quality Index Insurance Certification (QUIIC) Report International Conference on Inclusive Insurance 2020 — Digital Edition 2

Foreword

In November 2020, the world was reel- The acceleration of digitisation around ing from the havoc wreaked by the the world has certainly been one silver Covid-19 pandemic. Half the world lacks lining on the pandemic cloud. House- access to healthcare or social protection holds, industry and governments have and global human development would embraced digital solutions at an see a reversal for the first time in a gen- unprecedented rate. The pandemic has eration due to the pandemic’s impact been a grim reminder that we are, on health and incomes, noted Achim indeed, all in this together and that sur- Steiner, Administrator of the United vival depends on innovation, coopera- Nations Development Programme, in tion and partnership. As in previous his opening remarks. editions of the conferences, these were key themes that emerged during the Meanwhile, devastation from extreme week. climate events and natural disasters doggedly continued. Super Typhoon This sense of urgency, awareness of the Goni swept across the Philippines, increasing complexity of risk and the impacting two million people caught in sheer size of the problem that confronts its path. Flooding due to excessive rain us are all driving determination and new affected six million people in east partnerships to find solutions for the Africa, nearly a million of whose homes billions of vulnerable people and small were destroyed just months after a businesses around the world for whom plague of locusts had wiped out crops insurance could and should provide throughout the region, threatening food shelter from the storm. security and livelihoods. In Central America, hurricanes Eta and Iota dam- The inclusive insurance community is aged infrastructure and crops, exa strong and growing. The digital edition cerbating already strained food security of the 2020 Conference bore testament and taking lives. to the solidarity of more than 2,000 registrations from 126 countries who The findings of the Microinsurance are committed to ensuring that no one Network’s 2020 Landscape of Inclusive is left without the protection and resil- Insurance report, which was launched ience that good insurance can bring. at the opening session of the conference, served as a stark call to action Katharine Pulvermacher, that was echoed throughout the 18 ses- Executive Director, sions that took place over the five days Microinsurance Network a.s.b.l. of the virtual event. Luxembourg, March 2021 Effective and responsible insurance — including both risk transfer and risk management — is critical if we are to achieve the UN Sustainable Develop- ment Goals. Dirk Reinhard, Vice Chair of the Munich Re Foundation, reminded us all that we desperately need in creased cooperation between stakeholders to deliver the sustainable solutions that are urgently required. Value for the customer, which begins by understanding what clients need, is the starting point for designing such solutions. Deploying digitisation and efficient payment systems are both critical for these solutions to add this value to customers while remaining Katharine Pulvermacher economically viable. Executive Director, Microinsurance Network, Luxembourg Report International Conference on Inclusive Insurance 2020 — Digital Edition 3

Acknowledgements

The International Conference on Inclu- I would also like to thank all content sive Insurance (ICII) 2020 — Digital partners and supporting organisations Edition was the first fully online confer- of the ICII 2020 — A2ii, CEAR, Cenfri, ence in the history of the ICII. The EA Consultants, GIZ on behalf of BMZ, Covid-19 pandemic had made all plans GSMA, ILO’s Impact Insurance Facility, to host in-person events obsolete. At the IAA’s Microinsurance Working the same time, the pandemic has had Group, UNDP, MCII, the Microinsurance a strong negative impact on the eco- Centre at Milliman, and the World Bank nomic situation of the poor, and has Group. highlight ed the urgent need for more affordable risk management solutions. Furthermore, I would like to make It was therefore clear for all parties special mention of the team of rappor- involved that cancelling the Internatio teurs and authors — José Miguel Flores nal Conference on Inclusive Insurance Contró, Hugo Fulco, Ulf König, Maria during the pandemic was not an option V. Sáenz and Kira Henshaw — led by because affordable risk management Zahid Qureshi — who volunteered and solutions have never been more impor- summarised the key messages and tant. lessons from the various sessions of the 2020 conference. In addition, I would We would like to thank all those who like to extend my thanks to the Munich helped to make this conference with its Re Foundation conference team — over 2,000 registrations from 126 coun- Thomas Loster, Julia Martinez, Nora tries a genuine success. Switching from Fingado and Melissa Merle as well as in-person to online mode with such a the new Chair of the Munich Re Foun- diverse event was certainly an adven- dation, Renate Bleich. ture. But it was worth the effort since it allowed an unprecedented number and At the same time, I would like to diversity of participants to access first- welcome the participants to the Inter- hand experience in inclusive insurance. national Conference on Inclusive Insurance 2021 which hopefully can The great success of the conference take place in Jamaica. Together with the would not have been possible without Insurance Association of Jamaica, we the hard work of the conference steer- are looking forward to the next event, ing committee and I would like to thank set to take place from 26 to 28 October all members of the steering committee in Kingston. for their guidance. I would also like to express my sincere gratitude to the Dirk Reinhard, Vice Chairman 77 speakers and facilitators who volun- Munich Re Foundation, Germany, teered to present their knowledge and Chairman of the Conference lead the sessions. Steering Committee

A special thank-you goes to Doubell Munich, January 2021 Chamberlain, former Chairman of the Board of the Microinsurance Network, and its new chairman Lorenzo Chan, CEO of Pioneer Insurance, for the long- term cooperation and support of the Microinsurance Network. We would like to thank the Executive Director of the Microinsurance Network Katharine Pulvermacher and her team. They have worked long hours to technically host the event and were the core and heart of this first digital ICII. Dirk Reinhard Vice Chairman, Munich Re Foundation, Germany Report International Conference on Inclusive Insurance 2020 — Digital Edition 4

Participant overview

Type of participant by category

Insurance and finance industry 59.0 % Donor agencies, development and international organisations 9.9 % Microfinance and microinsurance providers 5.5 % Government and regulatory bodies 5.2 % Academics 6.3 % Consultants 8.9 % Media 0.4 % Other 4.8 %

Source: Munich Re Foundation

Geographical origin of participants 1 146

Source: Munich Re Foundation Powered by Bing, Copyright GeoNames, Microsoft, Navinfo, OpenStreetMap, TomTom, Wikipedia Report International Conference on Inclusive Insurance 2020 — Digital Edition 5

Agenda Day 1—2 November 2020 Inclusive insurance amidst a pandemic

Session 1 Session 2 Session 3 Opening of the Inclusive Insurance Pricing inclusive conference — responses to Covid-19 insurance in the The landscape of midst of a pandemic inclusive insurance Speakers 2020 Hosted by Gilles Renouil IAA’s Microinsurance Welcome Global Head of Insurance Working Group products, Women’s World Dirk Reinhard Banking, Switzerland Speakers Vice Chairman, Munich Re Foundation, Germany Shilpi Shastri Denis Garand Strategic Advisory — Denis Garand and Keynote Insurance, Women’s Associates, Canada World Banking, USA Achim Steiner Jeff Blacker Administrator of the Jordon Tait Independent Consulting United Nations Assistant General Actuary, USA Development Programme Manager — Commercial (UNDP), USA Lines, GK General Facilitator Insurance, Jamaica Panellists Nigel Bowman Rehan Butt Co-founder, Inclusivity Alice Merry Chief Commercial Officer, Solutions, South Africa Financial Inclusion MicroEnsure, Pakistan Consultant, Peru Syed Nayyar Hussain Garance Wattez-Richard Director — Head of Head of AXA Emerging Department, Securities and Customers, GIE AXA, France Exchange Commission, Pakistan Craig Churchill Chief, ILO’s Social Finance Facilitator Programme & Team Leader, Impact Insurance Facility, Craig Thorburn Switzerland Lead Financial Sector Specialist, The World Bank, Facilitator USA

Katharine Pulvermacher Executive Director, Microinsurance Network, Luxembourg Report International Conference on Inclusive Insurance 2020 — Digital Edition 6

Session 1 Opening of the conference — The landscape of inclusive insurance 2020

The first-ever digital ICII opened with Katharine Pulvermacher, Executive Reaching women clients the launch of the Landscape of Micro- Director of the Microinsurance Net- insurance 2019 study, setting the scene work, introduced the Landscape of Alice Merry added that for five days of discussions and insights. Microinsurance 2019 study, which pro- four trends were emerging: Welcoming some 2,000 registered par- vides much-needed insight into devel- ticipants, Dirk Reinhard, Vice Chairman oping markets. She said the findings — The continuing rise in low-cost of the Munich Re Foundation, noted make for sobering reading — only one health products; that the conference comes at a very dif- person in four has insurance, and out of ficult time both on a personal level for the 5.4 billion emerging consumers — Combining digitisation and the millions of people, and for the insurance worldwide, only about 500 million have human touch; industry as a whole. any kind of insurance to protect them against daily and catastrophic risks — Concerns around customer “Post-pandemic, we will still face the (see Figure 1). value, highlighted by low claims much bigger challenge of climate ratios for low-cost personal change,” said Dirk Reinhard. “Insurance The landscape studies date back to insurance products; and can and should help vulnerable popula- 2010. For the first time, this year the tions to manage climate risk, educate study collected data on the gender of — Shifting perspectives on them about the benefits and limitations customers. Asia has the highest per- climate risks. of insurance, and encourage an ena- centage of female clients, followed by bling regulatory environment to create Latin America and the Caribbean, and The study detected an increasing rec- more efficient distribution channels. then Africa, Katharine Pulvermacher ognition that climate and natural disas- Collecting and sharing reliable data is noted. ter risks affect not only agriculture but also key.” also a wide range of economic activities Author of the report Alice Merry said and people themselves. Index covers Keynote speaker Achim Steiner, Admin- that these figures probably reflect and natural disaster insurance are istrator of the United Nations Develop- broader levels of economic and finan- increasingly being used to protect liveli- ment Programme (UNDP), also focused cial inclusion in each region (see hoods outside of agriculture. Climate on the dual challenges of Covid-19 and Figure 2). “To better serve women, a change is bringing about new and fre- climate change. Global human develop- vital first step for insurers is to collect quent natural disasters, while gradual ment, he said, is set to decline this year and monitor gender-disaggregated changes in climate are posing threats to for the first time in a generation. How- data. Microinsurers were able to food security and increased health risks. ever, inclusive insurance can play a vital provide this information for 45 % of Climate has a bearing on all classes of role in getting the Sustainable Develop- the products in the study.” inclusive insurance, and they have a role ment Goals (SDGs) back on track by to play in improving resilience. protecting lives and livelihoods, reducing poverty, increasing financial inclusion, and empowering women.

Dirk Reinhard Achim Steiner Alice Merry Vice Chairman, Munich Re Foundation, Administrator of the United Nations Financial Inclusion Consultant, Peru Germany Development Programme (UNDP), USA Report International Conference on Inclusive Insurance 2020 — Digital Edition 7

Figure 1 The people protection gap

No more than one person out of every four has access to insurance.

World daily income distribution*

> US$ 50 7 %

US$ 20—50 9 % Emerging consumers represent US$ 10—20 13 % an estimated 69 % of the world’s population. US$ 2—10 56 % That’s around 5.4 billion people, of < US$ 2 15 % whom only about 500 million have any kind of insurance to protect them * Pew Research Center — 2011 estimates. against daily and catastrophic risks.

Source: Pulvermacher, Katharine. Presentation “The Landscape of Microinsurance 2019.” International Conference on Inclusive Insurance — Digital Edition 2020.

Figure 2 For the first time, this year’s Reaching women clients Microinsurance Landscape study has collected data on the gender of microinsurance customers. Insurance providers were able to provide this information for 45 % of products in the study.

The median percentage of female clients in each region Region Median percentage of female clients Africa 40 % Asia 60 % Latin America and the Caribbean 52 % All regions 50 %

Source: Merry, Alice. Presentation “The Landscape of Microinsurance 2019.” International Conference on Inclusive Insurance — Digital Edition 2020. Report International Conference on Inclusive Insurance 2020 — Digital Edition 8

Session 1 Opening of the conference — The landscape of inclusive insurance 2020

Panellists Garance Wattez-Richard, In simple terms, an insurer is usually The study’s research focuses on 30 Head of AXA Emerging Customers, and expected to have a claims ratio of 60 to countries in Africa, Asia and Latin Craig Churchill, Chief of the ILO’s Social 70 % and an expense ratio of 20 to 30 %. America. Combining extensive in-coun- Finance Programme & Team Leader of A combined ratio of less than 100 leaves try primary research with analysis of its Impact Insurance Facility, both com- a margin for a before-tax profit; if it is the context for market development, mented on the significance of the Land- more than 100, the excess produces an the landscape study provides a unique scape study and the importance of underwriting loss, which needs to be benchmark for all stakeholders in inclu- robust data. offset by investment income. sive insurance, said Dirk Reinhard as the session concluded. “The research Garance Wattez-Richard said she had In this global study of inclusive insur- is fundamental to improving the supply been positively surprised by how the ance across the three regions, claims of insurance products and services “essential building blocks” already in ratios are at a low median rate of 23 %. designed to meet the needs of vulner- place have helped countries cope with The average claims ratio is particularly able, low-income households and Covid-19 — for example in India, where low in Latin America and the Caribbean MSMEs, and to increasing uptake. 200 million women received emergency at just 10 %, and highest in Africa at The results of the study not only enable subsidies through existing channels. 28 %. Although many products do offer cross-country comparison to identify “The world has taken a crash course on good value to clients, a significant pro- factors critical to creating a fertile life and health insurance,” she said. portion of products (33 % across all environment for inclusive insurance, but “How can we turn all this into a silver regions) have single-digit claims ratios, also provide insurers and distribution lining?” and in Latin America and the Caribbean partners with much-needed insight into over half of the products recorded had the potential market size.” “Climate change and Covid-19 demon- single-digit claims ratios. strate how vulnerable we all are, and insurers should be able to respond to The claims ratios are impacted by the those opportunities,” said Craig high expense ratios of many insurers, Microinsurance Network Churchill. “However, on the flip side particularly in Africa, and by high com- there are huge challenges — it’s deeply missions for distribution partners, par- troubling to see the data on claims. ticularly in Latin America and the Carib- It’s definitely not a pretty picture.” bean. These costs raise the price of insurance products while squeezing the amount available to pay claims.

Garance Wattez-Richard Craig Churchill Katharine Pulvermacher Head of AXA Emerging Customers, Chief, ILO’s Social Finance Programme & Executive Director, Microinsurance Network, GIE AXA, France Team Leader, Impact Insurance Facility, Luxembourg Switzerland Report International Conference on Inclusive Insurance 2020 — Digital Edition 9

Keynote By Achim Steiner — Administrator UNDP

Excellencies, Ladies and Gentlemen, At this critical moment, inclusive This is an incredible challenge — but Dear Colleagues, insurance is playing a vital role in one we can achieve if we work together. getting the Sustainable Development So, please allow me to share with you It is with great pleasure that I welcome Goals back on track — particularly four fundamental reflections on how I you to the 16th International Confer- in terms of protecting lives and liveli- see the work of the conference: ence on Inclusive Insurance. This digital hoods. It is also contributing to a edition of the conference comes as range of critical areas including poverty Firstly, in light of the increasing com- countries across the globe tackle the reduction, financial inclusion and plexity of risk that communities face — unprecedented consequences of the women’s empowerment. the inclusive insurance industry must Covid-19 pandemic. Global human design and develop solutions that are development, a combination of the Indeed, the pandemic has shown us not only about the transfer of risk. The world’s education, health and income, is that expanding access to insurance is solutions must also focus on the long- set to decline in 2020 for the first time vital. That includes areas like health term management of risk — and they in a generation. at a time when 50 % of the world lacks must aim to build broad family financial healthcare or social protection.1 Inclu- resilience. sive insurance is also key to protecting micro, small and medium-sized enter- Secondly, governments should recog- prises which generate 70 % of employ- nise the crucial importance of access ment worldwide.2 Those businesses will to financial services — including insur- be critical to driving forward the global ance — for economic development, and socio-economic recovery. develop concrete strategies to address critical inclusion gaps. We are also aware of the increasingly critical role that inclusive insurance Thirdly, the insurance industry must will play in mitigating the many make digitisation central to its work. impacts of our changing climate. At This is not only because of the realities the UN Climate Action Summit in 2019, of the Covid-19 pandemic, but also the insurance and development com- because of its ability to improve the munity recommitted itself to delivering products, tools and services it pro- on the ambitious target of 500 million vides to those who need it most. more beneficiaries of climate risk insurance by 2025 — 150 million through inclusive insurance.

ILO Achim Steiner 2 Administrator of the United Nations Development Programme (UNDP), USA ILO Report International Conference on Inclusive Insurance 2020 — Digital Edition 10

Opening remarks

Take a look at a new report by the UN As the UN’s technical lead in the Secretary-General’s Task Force on the socio-economic response to Covid-19, Digital Financing of the Sustainable UNDP is well aware of the critical need UNDP Development Goals. It points out how for inclusive insurance. We will there- digital finance holds extraordinary fore work on promoting inclusive potential to expand financial inclusion insurance in a minimum of 20 coun- by empowering citizens as savers, tries over the next 6 years — thanks investors, borrowers, lenders and tax- largely to support from the Federal Gov- payers. And if we give people a choice, ernment of Germany, a global leader in they will invest in critical areas like the this space. And to help UNDP’s Country green economy — boosting job creation Offices, programme countries and our and inclusion. partners to take advantage of the myr- iad of benefits associated with inclusive Finally, partnerships are everything — insurance, we will launch a “one-stop that includes those between the private shop” for them later this year, called the and public sectors, within government, Insurance and Risk Finance Facility. between ministries of finance and insurance regulators and supervisors — Finally, I am incredibly impressed with and beyond. So, please see the United the level of engagement with this Nations Development Programme as conference — it has attracted some your critical partner — wherever you are. 2,000 people from 126 countries. This On the ground in 170 countries, we is quite remarkable for a virtual event. work with governments on legislation I would like to express my gratitude to and regulation. And we construct new all of you for your efforts to move inclu- initiatives with partners from the private sive insurance forward at this critical sector — all built on the specific needs moment — and I wish you a productive and realities of people and their com- week ahead. munities. Thank you. Report International Conference on Inclusive Insurance 2020 — Digital Edition 11

Session 2 Inclusive insurance responses to Covid-19

By Ulf König

This session addressed the impact of How Covid-19 affects policyholders Third and last, a number of factors ham- Covid-19 on the inclusive insurance com- pered access to and utilisation of in munity in different parts of the world. Women’s World Banking presented surance. Banking and microfinance Panellists discussed their reactions to early findings from a study of six health operations came almost to a standstill short-term implications of the pandemic microinsurance schemes, one each in for lack of physical contact. Branches as well as the long-term changes it has Egypt, India, Jordan, Morocco, Pakistan remained closed for many weeks in triggered. and Uganda. It shows that the pan- most countries, preventing customers demic has had three distinct effects on from filing claims. On top of that, insur- policyholders and potential customers. ers had to send their employees home, First, unemployment increased in leaving them with insufficient capacity industries such as manufacturing and to handle the outstanding claims. hospitality, where a majority of the In practice, this translated into major workforce is women, causing major delays in reimbursement or even no insecurity and spending cuts. Second, cover at all. At the same time, while cus- access to healthcare has narrowed as tomers became more aware of the ben- many hospitals are overwhelmed by efits of insurance, their declining Covid-19 cases, forcing them to concen- incomes made cover unaffordable and trate their resources on those cases and many defaulted on their premiums. refuse admissions for other services. This is reflected in Figure 3, which depicts low occurrence of hospitalisation (% of claims) observed in three microinsurance schemes over the years 2018—20, dropping significantly in 2020 compared to previous years.

Figure 3 Total monthly hospitalisation incidence by admission date

0.35 %

0.30 %

0.25 %

0.20 %

0.15 % 2018 0.10 %

0.05 % 2019

0 % Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2020

1. 2. 3. The possible causes low reporting of claims customers not going to delay by the FSP and of the lower incidence (branch shutdown or hospitals for non-Covid insurers in approving rates could be due to customers’ movement cases, or the claims as they are factors such as: restricted), also working with limited capacity.

Source: Renouil, Gilles. Presentation “Inclusive Insurance Response to Covid-19.” International Conference on Inclusive Insurance — Digital Edition 2020. Report International Conference on Inclusive Insurance 2020 — Digital Edition 12

Session 2 Inclusive insurance responses to Covid-19

Box 1 How the industry reacted Beyond the immediate crisis Bearing the brunt Insurers acted fast on these new chal- Covid-19 has shown that digital distri- Although in many countries more men lenges and made major efforts to bution and digital operations will be of have reportedly died from Covid-19 digitise both their delivery models and crucial importance in narrowing the gap than women, women are facing more internal processes, especially claims- of financial inclusion further — in par- challenges because of the prevalent handling routines. This consensus of ticular, mobile technology, which enjoys social and economic gender gaps now panellists from Jamaica and Pakistan broad penetration in most countries and exposed by the pandemic. These was echoed in the session’s Q&A round. represents a good means of reaching include loss of livelihood, reduced food The pandemic created an unprece- potential customers. As women in security, access to essential healthcare dented sense of urgency in the industry, low-income communities are less likely services (e.g. maternity, gynaecologi- triggering a wave of innovation that to own and use a mobile phone and cal), more cases of gender-based vio- may well persist beyond the immediate the internet, they will require special lence and mental health. crisis. Some of these projects were car- attention. Importantly, insurers do not ried out with the help of external con- have to wait for regulators’ permission Covid-19 has forced the low-income sultants, which contributed to their to digitise their processes and may population, especially women, to speed of implementation. Regulators, embark upon this journey on their own. mobilise their savings for basic suste- on the other hand, issued a number of Once they are running fully digitally, nance rather than investing in their guidelines providing insurers with relief insurers can even pass on their cost long-term goal of children’s education. on reporting duties, flexibility for dead- savings to customers in the form of As men in households succumb to lines and recommendations on solvency lower premiums, which would accel- the pandemic, it’s the women left issues. erate adoption even further. behind who are feeling the pressure of having no safety net or inheritance and they are at a greater risk of being pushed into poverty.

Source: Shastri, Shilpi. Presentation “How Covid-19 widens the gender equality gap in low income countries.” International Conference on Inclusive Insurance — Digital Edition 2020.

Gilles Renouil Shilpi Shastri Jordon Tait Global Head of Insurance products, Strategic Advisory — Insurance, Assistant General Manager — Women’s World Banking, Switzerland Women’s World Banking, USA Commercial Lines, GK General Insurance, Jamaica Report International Conference on Inclusive Insurance 2020 — Digital Edition 13

In addition, filing a claim has proved to Hospital cash insurance has gained Lessons learnt be the moment of truth for policyhold- momentum in microinsurance in the ers. For many, it is the first contact with last few years because of its simplicity — Covid-19 has slowed down progress their insurance provider since purchas- and effectiveness in providing critical in financial inclusion and inclusive ing cover — and it is often not a satisfac- financial support during health emer- insurance all over the globe. tory experience, fraught with cumber- gencies, and there is a separate session some steps required to report a claim dedicated to it in the conference. — Distribution/delivery and and get it processed. Insurers are well customer coverage represent the advised to think about ways to win back biggest challenges brought up their customers’ goodwill, e.g. by ac by the pandemic. cepting late premium payments and Women’s World Banking late claim filings. — Women are impacted more severely Micro Insurance Company than men by the pandemic. Securities and Exchange In this context, hospital cash insurance Commission of Pakistan needs to be mentioned explicitly. Many — Switching to digital delivery models Covid-19 patients ended up recuperat- and to digital operations is turning ing at home due to limited capacity at out to be key for insurers to cope hospitals. The claims of those who had with the crisis. Covid-19 has fuelled hospital cash insurance were declined innovation in unexpected ways. because they were not hospitalised. New approaches call for technical However, they were not able to generate education and training of customers any income during this time either. in low-income communities. A critical value proposition of hospital cash insurance is that it acts as an — Governments can contribute to income replacement tool in the event easing the regulatory burden of the hospitalisation of the breadwin- on insurers, during the Covid-19 ner. These customers expressed their pandemic and beyond. frustration and felt that the insurance providers failed to adapt the product to these exceptional circumstances.

Rehan Butt Syed Nayyar Hussain Craig Thorburn Chief Commercial Officer, Director — Head of Department, Lead Financial Sector Specialist, MicroEnsure, Pakistan Securities and Exchange Commission, The World Bank, USA Pakistan Report International Conference on Inclusive Insurance 2020 — Digital Edition 14

Session 3 Pricing insurance in the midst of a pandemic

By Maria V. Sáenz

Pricing insurance products can be a The pricing process was explained After running a Monte Carlo simulation challenge. Pricing microinsurance is using a hypothetical health insurance 1,000 times with the same basic even more challenging. And trying to do product and both deterministic and assumptions plus a 90 % desired confi- it during an unexpected pandemic is stochastic models. The result of the dence that the risk premium will be something that was until now unthink- deterministic approach is the weighted sufficient, the result was very close to able. This session went from a recap on average of the incidence rate (based the deterministic result: US$ 11,232. insurance pricing to the lessons from on the claims frequency distribution) This simulation gives an idea of the out- catastrophe insurance applicable to a multiplied by the weighted average of comes and of how much margin is pandemic. the expected amount of insurance needed for a desired level of confidence. claims (distribution of the amount filed If higher confidence is desired, more Pricing insurance without data by those who had a claim). In this margin goes to the premium. With example, the risk premium is 0.54 (the fewer people in the model or higher The process of pricing insurance, and expected number of claims filed per volatility in the data, higher margins are microinsurance under normal or abnor- person per year) multiplied by an aver- added to the premium. mal circumstances, is the same: gather age claim of US$ 40, that is US$ 21.60 data, set assumptions, define a model, per person per year. If the pool insured To explain the stochastic model, a validate model output, monitor experi- is 500 people, the gross premium Monte Carlo simulation of the hypo- ence against assumptions, and repeat would be US$ 21.60 x 500 insureds = thetical product was run online, using as required. The price is the gross pre- US$ 10,800 (see Figure 4). However, fixed assumptions such as deductibles, mium, which equals the risk premium given that usually the data to set coinsurance and costs, among others. (incidence rate or likelihood of the assumptions is not perfect, the insurer The responses of the audience deter- insured event x expected amount of needs to add a margin to increase mined the incidence rate and the insurance claims) + expenses + profit confidence that the risk premium will expected amount of insurance.4 margin. be sufficient. To add this extra layer of certainty to imperfect data, insurers may use stochastic methods, like the Monte Carlo simulation.3

Figure 4 Deterministic or stochastic models?

Distribution Frequency of claims Distribution Amount of claims 60 % 0 50 % US$ 10 30 % 1 40 % US$ 50 6 % 2 10 % US$ 150 4 % 3

— Stochastic processes have random variables — Monte Carlo is a way of simulating stochastic processes

3 Expected numbers of insured 500 IBM.com defines Monte Carlo simulation Desired confidence 90 % as a mathematical technique used to estimate the possible outcomes of an uncertain event. Run 1000 simulations producing a range of results It was invented by John von Neumann and Aggregate claims, average US$ 10,800 Stanislaw Ulam during World War II to Aggregate claims, 90 % confidence US$ 11,232 improve decision-making under uncertain conditions. Risk premium per person with margin US$ 22.46 = US$ 11,232 / 500 4 The Excel file with the Monte Carlo simulation

Source: Blacker, Jeff. “Pricing Insurance without Data.” can be downloaded from Global Insurance International Conference on Inclusive Insurance — Digital Edition 2020. Consulting. Report International Conference on Inclusive Insurance 2020 — Digital Edition 15

The stochastic model has many advan- Dealing with the impact of Women’s World Banking’s preliminary tages. It gives a good idea of the risk major perils findings from the microinsurance premium and the margin needed for a schemes operated by three different desired level of confidence, while allow- Studies show that survivors of extreme financial service providers during the ing hypothetical scenarios with differ- weather events experience adverse pandemic show that the percentage ent plans and designs. However, there mental health outcomes that can have of hospitalisations is lower than in are some disadvantages: it can give a significant social and political con- previous years and maternity and gyne- false sense of confidence if the input sequences. Only the immediate impact, cology claims show a sharp decline. is not correct, and it has difficulty simu- such as deaths during a hurricane, Reasons for the declines may be low lating 100-year events, making it inca- makes the news, but there are likely reporting of claims because of branch pable of pricing insurance for Covid-19. long-term effects. shutdowns or restrictions on customers’ movements, fewer visits to hospitals In the face of data problems, pricing A Swiss Re study of Ebola’s conse- for non-Covid-19 cases, and delays in specialists may use incomplete data quences showed that 18 months after approval of claims as providers face or data from other similar sectors, its peak, the population affected devel- working and capacity restrictions. adjusting for various actuarial factors. oped mental health issues. In the case Any subjective valuation can then be of Covid-19, a likely consequence, be Statistics of the Canadian Institute addressed through market research. sides mental health, is long-term organ of Actuaries show the same trend Pricing requires a holistic view of the damage. (see Figure 5). status and trends, plus frequent monitoring against assumptions to measure results.

Figure 5 Canadian Institute of Actuaries COVID Study Total Individual and Group Life Insurance Monthly Claims count Jan 2019—June 2020

count 1K

Group Claims Claims Group 3.2 3.2 3.4 3.2 3.4 3.0 3.1 2.8 2.8 3.0 3.0 2.9 3.3 3.0 2.9 2.8 2.7 2.2 0

10K

4K count

2K Individual Claims Claims Individual 10.2 8.6 9.2 8.9 9.1 8.0 8.4 8.0 8.3 8.8 8.7 8.4 10.1 8.5 9.0 9.8 9.0 6.4 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2019 2020

Source: Garand, Denis. “Pricing insurance in the midst of a pandemic.” International Conference on Inclusive Insurance — Digital Edition 2020. Report International Conference on Inclusive Insurance 2020 — Digital Edition 16

Session 3 Pricing insurance in the midst of a pandemic

The pandemic serves as a reminder that Lessons learnt low-income people are hit hardest by systemic shocks such as natural disas- — The pandemic seems to have — Lack of data should be offset ters or pandemics. Regulators, insurers changed everything. But the pricing by research and a holistic view and intermediaries together have to process in insurance remains the of the market, plus frequent increase access to inclusive insurance same, except for the calculation of monitoring to measure results. supplemented by risk mitigation. tail risks, which can be present to a significant extent. — Many studies are expected to help regulators, industry, distributors — Inclusive insurance is learning from and clients understand the post- the experience with natural catastro- pandemic ecosystem. A focus on IAA phes and their long-lasting conse- inclusive insurance to protect the quences. The lessons call for special poor should be a priority. attention to mental health issues. The product’s pricing and added — Understanding the context of the value should be good enough to target population is critical. guarantee a normal rate of claims, paid rapidly.

Denis Garand Jeff Blacker Nigel Bowman Denis Garand and Associates, Canada Independent Consulting Actuary, USA Co-founder, Inclusivity Solutions, South Africa Report International Conference on Inclusive Insurance 2020 — Digital Edition 17

Agenda Day 2—3 November 2020 Inclusive insurance against climate risks

Session 4 Session 5 Session 6 Session 7 Public-private The role of mobile in Macro, meso, micro: Quality Index Insurance partnerships for inclusive scaling index insurance Practical experiences Certification (QUIIC) insurance against climate at all levels of parametric risks: Hosted by insurance Hosted by CEAR What works and what GSMA — Mobile does not? for development Hosted by Speakers the Microinsurance Hosted by the Speakers Centre at Milliman Michael Carter ILO’s Impact Professor, University Insurance Facility Simon Schwall Speakers of California, MRR CEO, OKO, Israel Innovation Lab, USA Speakers Matt Chamberlain Pranav Prashad Principal and Consulting Lilian Ndungu Srinivasan Iyer Senior Technical Officer, Actuary, Milliman, Thematic Lead — Programme Manager, ILO’s Impact Insurance USA Agriculture and Food Ford Foundation, India Facility, Switzerland Security, Regional Centre Iker Llabres for Mapping of Resources Mario Wilhelm Facilitator Business Manager for for Development (RCMRD), Head Middle East & Africa, El Salvador and Kenya Swiss Re, Switzerland Rishi Raithatha Actuarial Officer, MiCRO, Senior Advocacy Manager, USA Munyaradzi Daka Munyaradzi Daka GSMA Mobile Money Consultant, Agro Insurance Consultant, Agro Insurance Programme, UK Isaac Anthony Consortium, Uganda Consortium, Uganda CEO, CCRIF SPC, Cayman Islands Facilitator Emily Coleman Agricultural Insurance Lead, Facilitator Glenn Harrison INSURED, PARM, IFAD, Italy C.V. Starr Chair of Risk Indira Gopalakrishna Management & Insurance, Facilitator Microinsurance Specialist, Robinson College of MicroInsurance Centre at Business, Georgia State Pranav Prashad Milliman, Singapore University, USA Senior Technical Officer, ILO’s Impact Insurance Facility, Switzerland Report International Conference on Inclusive Insurance 2020 — Digital Edition 18

Session 4 Public-private partnerships for inclusive insurance against climate risks: What works and what does not?

By Kira Henshaw

The session highlighted the necessity of Box 2 Pradhan Mantri Fasal Bima Yojana public-private partnerships (PPPs) in Pradhan Mantri Fasal Bima Yojana (PMFBY) is a government-sponsored building sustainable inclusive insurance weather-based crop insurance PPP in programmes addressing climate risks. Number of people insured: India. It was launched in 2016 after 55 million per year rolling back two earlier national agricul- Assisting smallholder farmers Insured risks: ture insurance schemes. Premiums are Crop (pre-sowing to post-harvest) subsidy-based, with a nominal share Smallholder farmers are highly vulnera- Premium: paid by farmers. The premium cost over ble to shocks. Farm yields depend on Farmers’ share ranges from 1.5 to 5 % and above the farmer share is equally unpredictable seasonal rainfall, and of the sum insured, with the rest subsidised by states and the central low income from other sources makes subsidised by government government. it difficult to purchase insurance to absorb losses. A PPP, engaging the Implementation challenges in covering government, private insurers and inter- smallholdings and large crop varieties mediaries, can help farmers pay premi- include high transaction costs, incon- ums while creating a scalable platform. sistent and arbitrary loss assessment and inefficient claims payments. To increase effectiveness, sustainability and the impact of government support, PMFBY focuses on improving inclusion, damage assessment, credibility, edu cation, simplification and innovation.

Key features of the scheme include:

— integration of land records with the PMFBY portal;

— crop insurance mobile app for easy enrolment of farmers; and

— use of technology such as satellite imagery, remote-sensing, drones, artificial intelligence and machine learning to assess crop losses.

Srinivasan Iyer Mario Wilhelm Munyaradzi Daka Programme Manager, Head Middle East & Africa, Swiss Re, Consultant, Agro Insurance Consortium, Ford Foundation, India Switzerland Uganda Report International Conference on Inclusive Insurance 2020 — Digital Edition 19

The features make it easier for the Box 3 The Uganda Agriculture Insurance farmer to report crop loss within 72 The Uganda Agriculture Scheme (UAIS) is a PPP insured by the hours of occurrence of any event Insurance Scheme Agro Consortium (a group of 11 insur- through the crop insurance app, a ance companies). Through the co-insur- common service centre (CSC) or the Number of people insured: ance structure of the consortium, agri- nearest agriculture officer. 174,800, smallholder and cultural risks underwritten are shared large-scale farmers throughout the risk pool, spreading the As an end-to-end risk mitigation mech- Insured risks: financial burden of claims and unifying anism for farmers, the scheme extends Natural calamities for crops standards, procedures and products. cover for the entire cropping cycle from and livestock pre-sowing to post-harvest, including Premium: Subsidised by the Government of cover for losses arising out of prevented Average US$ 41.05 per year Uganda, farmers purchasing agriculture sowing and mid-season adversities. insurance products directly or through Also covered are individual farm-level financial institutions pay reduced losses arising out of localised calamities premiums. Subsidies of approximately due to perils such as inundation, cloud- US$ 1.5m are provided per year, with burst and natural fire. a view to increasing provision with increasing demand (see Figure 6). With 290 million farmers enrolled in five years, PMFBY serves as an example of a PPP, supported by public sector subsidies, achieving scale while keeping premiums affordable.

Figure 6 UAIS 3-year performance 174,800 insured are 5.8 % of 3,000,000 active farmers in Uganda

Year 2017 2018 2019 Total

Farmers insured 45,701 47,305 81,794 174,800 Premium 1,450,000 2,300,000 3,500,000 7,250,000 Claims 490,000 460,000 520,000 1,470,000

Loss Ratio 34 % 20 % 14 % 20 %

Source: Daka, Munyaradzi. Presentation “Uganda Agriculture Insurance Scheme”, International Conference on Inclusive Insurance — Digital Edition 2020. Report International Conference on Inclusive Insurance 2020 — Digital Edition 20

Session 4 Public private partnerships for inclusive insurance against climate risks: What works and what does not?

Ensuring stakeholders’ input A PPP’s contribution to such priorities is Box 4 mutually beneficial to partners in the Three PPP learnings Stakeholder responsibilities should be public and private sectors. Govern- specified, ensuring their full support of ments have the capacity and incentive 1. Think Big — climate change is a the PPP. In Uganda, while the govern- to reach people at scale as they are global and long-term challenge. ment increases financial sustainability required to fulfil a social role, creating PPPs should articulate their goals of UAIS, government agencies provide safety nets for people and businesses. and maintain a long-term vision, data support, financial institutions The PPP’s focus on enhancing the gearing pilot studies towards achiev- increase access to credit, and the con- safety nets though products protecting ing scale and using public resources sortium undertakes sensitisation and the vulnerable against climate risks efficiently to create widespread awareness activities with government will help it achieve scale and make its solutions. agencies and development partners own business sustainable. Schemes to encourage uptake. beginning as private sector initiatives in 2. Start Small — fail small and fast. India (PMFBY) and Northern Kenya Use pilots to test and refine products A PPP must acknowledge potential (livestock insurance) have been scaled and claims processes. Models and effects of political pressure on products, successfully by broadening the scope of data availability evolve over time. premiums and claims. Financial support operations as part of larger public pro- should be ring-fenced from day-to-day grammes. In a complementary role, pri- 3. Scale Fast — reach scale quickly to political interference and insurance vate players continue to drive innova- show traction and keep stakeholders principles should form the basis of tion and competition for the expansion engaged. Few schemes have schemes. Nevertheless, the PPP needs and improvement of products and ser- succeeded without scaling fast. to embrace new national priorities vices. that may affect its mission and operations — particularly ones such as cli- Source: Wilhelm, Mario. Presentation “Public Private mate change that are clearly connected Partnerships for Inclusive Insurance against Climate Risk.” to its business. International Conference on Inclusive Insurance — Digital Edition 2020.

Emily Coleman Pranav Prashad Agricultural Insurance Lead, INSURED, Senior Technical Officer, ILO’s Impact PARM, IFAD, Italy Insurance Facility, Switzerland Report International Conference on Inclusive Insurance 2020 — Digital Edition 21

Creating an enabling environment Another challenge of state-led subsi- Lessons learnt dised schemes can be that farmers have To build a sustainable national agricul- agricultural insurance without under- — Long-term sustainability and effi- tural insurance programme, there are standing the cover they have or how ciency of PPPs remains challenging. common demand and supply chal- claims can be made. In some countries, Multi-stakeholder approaches lenges that government-led schemes distribution models are commonly used are critical with public and private can help overcome. in social village structures, with village sectors as equal players. leaders purchasing insurance without Food security became particularly individual farmers’ full understanding. — Governments and donors can help important when pandemic trade restric- In addition to alternative delivery chan- overcome market development tions arose. This has encouraged inter- nels, awareness-raising and capacity challenges. Private players should be est in helping to create and test new development can therefore help govern- able to benefit from public goods, insurance products for high value agri- ments and PPPs create strategies with a levelling playing fields and incentiv- cultural value chains, such as for vege- long-term view of market development. ising insurer involvement. tables, rather than only for rice, which has so far been a focus in countries like Helping to collect and provide access — Governments should improve Cambodia and Indonesia. However, to good quality weather and yield data participation of private insurers to sometimes insurance for high-value is a widespread challenge and a funda- enable competition for subsidised crops can bring other challenges, for mental area for government to support, products. Some countries have example finding solutions to permit particularly in the face of climate subsidised programmes with only timely loss-and-damage assessment. change, in order to develop, operate, one or two state-backed insurers Also on the product side, demand and validate accurate products. able to access subsidies. research in Vietnam suggested that crops should be diversified on the basis — Risk pooling improves capacity for of proximity to various target groups skills development and product and their local risk exposure, rather consistency, and provides robust PMFBY than following uniform product design product research and development UAIS decisions taken at state level. opportunities — standardisation is useful for achieving scale. Report International Conference on Inclusive Insurance 2020 — Digital Edition 22

Session 5 The role of mobile in scaling index insurance

By José Miguel Flores Contró

The session focused on how mobile Index insurance enables access but Among the study’s key and satellite technology can digitise has failed to generate uptake findings were that delivery and service, and can continue to make insurance more accessible and In May 2020, the GSMA, which repre- — index insurance enables first-time acceptable to smallholder farmers. The sents mobile operators worldwide, pub- access for many smallholder farmers, panel represented: OKO5, a crop insur- lished the report “Agricultural insurance but uptake remains limited; ance start-up using satellite imagery and for smallholder farmers,”6 covering weather forecasting to simplify claim index insurance trends, challenges and — partnerships are fundamental for management; ILO’s Impact Insurance opportunities (see Figure 7). The GSMA scaling-up and education; Facility, which is dedicated to enhancing brings together some 750 operators insurance capacity to reduce vulnerabil- with almost 400 companies in the — mobile technology enables service ity and protect the poor; and the GSMA, broader mobile ecosystem, including delivery across the agricultural an association of mobile network opera- handset and device makers, software insurance value chain; tors worldwide. companies, equipment providers and internet companies, as well as organisa- — MNOs and mobile money providers tions in adjacent industry sectors. can expand index insurance services; and

— insurance should be bundled with loans.

5 In the Yoruba religious system Oko is a deity protective of agriculture.

6 GSMA report, “Agricultural insurance for smallholder farmers”, published by the GSMA AgriTech programme, 2020.

Figure 7 GSMA Mobile for Development: reducing inequalities in our world

Clean Tech Identifying innovation, Connected Society Addressing facilitating scale and reducing the access and usage barriers to increase fragmentation of the clean tech space mobile internet adoption

Assistive Tech Improving the accessi- Connected Women Reducing the bility and affordability of mobile gender gap to increase digital and services for persons with disabilities financial inclusion for women

M4D Ulitities Unlocking access to Digital Identity Enabling robust affordable and improved energy, and unique digital identity for water and sanitation services greater inclusion

Mobile for Humanitarian Innovation Ecosystem Accelerator Delivering Accelerating the delivery and impact social impact and scale through of digital humanitarian assistance mobile innovation

Mobile Money Accelerating the Agri Tech Digitising the agri value digital financial ecosystem for the chain to drive mobile financial underserved inclusion for small holder farmers

Source: Raithatha, Rishi. Presentation “The role of mobile in scaling index insurance,” International Conference on Inclusive Insurance — Digital Edition 2020. Report International Conference on Inclusive Insurance 2020 — Digital Edition 23

Digitisation has changed the index The ILO’s Impact Insurance Facility Covid-19 has made the case for insurance landscape has been studying digitisation’s effects technology in insurance on agricultural insurance for a few In agricultural insurance, digitisation of years. In fact, its first encounter in this The pandemic has partially affected payments has been a gamechanger. field was when index insurance was the sale of crop insurance, given the introduced in India in 2003. In those restrictions on in-person meetings with Without mobile payments, the only days, digitisation was considered an farmers. However, Covid-19 has had option would have been to have a dense important tool for creating automated little impact on operations that are network of points of sale to serve cus- weather stations. The use of technology mainly technology-driven (e.g. claims tomers, a costly solution. Mobile money has since brought multiple players are verified by satellite data). services, such as M-PESA and Orange into the insurance value chain. It has Money, have enabled farmers who lack helped enhance insurance awareness Overall, by forcing insurers and inter- bank accounts to enrol in index insur- and financial education among target mediaries to adapt, the pandemic has ance schemes. Digitisation has also customers, improving their understand- established a meaningful case for the enabled precise data collection, improving and familiarity of the loss assess- use of technology in insurance. ing risk computation. Capturing the ment and verification processes. data has led to yet another significant By its very nature, selling agricultural change: digitisation of distribution tools. OKO, an Israel-based start-up, is a index insurance is more challenging new player in crop insurance. It uses than selling life and hospi-cash insur- emerging technologies as the pillar of ance services. Agricultural index insur- its crop insurance business, building ance targets smallholder farmers, who interfaces and platforms for different are harder to reach and are usually less stakeholders of its fully automated par- familiar with insurance. ametric products. Serving smallholder farmers in Africa in partnership with Allianz, OKO uses mobile for distribution and, with satellite data monitoring and automatically triggering the weather index, it processes claims and pays them via mobile money. To improve the value proposition, OKO bundles insurance with added services such as weather alerts, farming tips and access to affordable micro-credit.

Simon Schwall Pranav Prashad Rishi Raithatha CEO, OKO, Israel Senior Technical Officer, ILO’s Impact Senior Advocacy Manager, Insurance Facility, Switzerland GSMA Mobile Money Programme, UK Report International Conference on Inclusive Insurance 2020 — Digital Edition 24

Session 5 The role of mobile in scaling index insurance

Partnerships with MNOs Lessons learnt that can deliver — Digitisation has been instrumental Partnerships that use mobile money in various parts of the agricultural and bundle index insurance with prod- index insurance value chain — and ucts of a mobile network operator so has mobile technology. (MNO) have shown positive outcomes. This involves providing insurance cover — Mobile technology can improve to MNOs’ customers every time they insurance awareness and financial recharge their airtime balance or send education. airtime credit to a friend or family member. BIMA and MicroEnsure are good — Covid-19 restrictions have compelled examples of technical service providers insurers to increase their use of that have successful partnerships with technology to maintain operations. MNOs. Their business model allows deducting monthly premium payments — The use of satellite imagery and from customers’ airtime balances. sophisticated weather forecasting is bringing a variety of new players, MNOs need to be involved in the agri- such as data science experts, into cultural index insurance process in the agricultural index insurance some way. They can provide the right value chain. tools for insurers and suppliers to gather weather data, which can be used — Insurance value chains can best to determine whether indices might be held together through a partner- have been triggered. Using MNOs as a ship that combines expertise in prod- distribution channel without their uct design, distribution in emerging buy-in has proved less successful than markets, claim processing and when they are co-opted. value-added risk management.

Generally, successful business models work across various points of the insurance value chain. Partnerships where MNOs are enablers for some customer touch points can certainly help index insurance schemes.

Apart from distribution and payments, mobile technology can also be used to train sales staff, perform photo-based claims settlement, reduce fraud, set up weather stations and develop Internet of Things (IoT) devices. Some livestock insurance schemes have drastically reduced fraud by implementing photo- based claims settlements, which agricultural index insurance can also employ.

GSMA Report International Conference on Inclusive Insurance 2020 — Digital Edition 25

Session 6 Macro, meso, micro: Practical experiences at all levels of parametric insurance

By Maria V. Sáenz

The session featured two parametric Micro and meso levels MiCRO designs its risk transfer prod- catastrophe insurance schemes and an ucts according to the beneficiaries’ indemnity product for flood insurance, In the aftermath of the 2010 Haiti earth- needs and each intervention’s ecosys- drawing lessons from their experience quake, Fonkoze, the country’s largest tem (the type of prevalent risks, geo- with different beneficiaries. MFI, and global NGO Mercy Corps graphic areas, etc.). To this end, founded the Microinsurance Catastro- MiCRO’s products “protect against phe Risk Organisation (MiCRO). MiCRO business interruption losses and the acts as a facilitator between aggrega- decline in well-being caused by natural tors (banks, MFIs, utility companies, disasters”.7 It uses a proprietary calcula- etc.), regulators, insurance companies tion platform based on satellite infor- and reinsurers to develop and imple- mation and other sources to detect cov- ment index-based inclusive insurance ered events’ occurrence and severity. that helps vulnerable people recover Cash payments are made after calculat- from the consequences of natural disas- ing the severity of the event. All of ters, including reductions in income and MiCRO’s products have the backing of additional expenses. What MiCRO premium reinsurance. MiCRO’s prod- offers is a business interruption product ucts and processes are straightforward that benefits farmers and microentre- (see Figure 8). preneurs and all those affected by the consequences of natural disasters.

Figure 8 Product characteristics

Gradual payouts depend- Fast and ing on automatic severity of the payouts event

3 4

MiCRO’s All insureds No exclusions in same location 2 parametric 5 or deductibles receive same solutions payout level

1 6

Nimble and No need to simplified file a claim, no processes ease paperwork affordability constraints

Source: Llabres, Iker. Presentation “Macro, meso, micro: practical experiences at all levels of parametric insurance.” International Conference on Inclusive Insurance — Digital Edition 2020. MiCRO Report International Conference on Inclusive Insurance 2020 — Digital Edition 26

Session 6 Macro, meso, micro: Practical experiences at all levels of parametric insurance

MiCRO’s learning curve has been long Macro level In 2014, the Facility was restructured and arduous. However, good planning, using a segregated portfolio company the stakeholders’ involvement and the CCRIF SPC (formerly the Caribbean to facilitate expansion into new geo- right pricing are beginning to show Catastrophe Risk Insurance Facility) graphical regions and to provide new good results. During the first quarter of was formed in 2007 as the world’s first products for additional perils. 2017, MICRO sold 94 policies. By the multi-country risk pool. The impacts third quarter of 2020, MICRO had of Hurricane Ivan in 2004 brought into Since its inception, CCRIF has made 41,341 outstanding policies (cumula- sharp focus at political level the need 49 payouts totaling US$ 197 million to tive), showing a compound annual for quick liquidity following a natural 15 member governments, within 14 days growth of 50 %.8 The total payouts over disaster to meet immediate needs of of the event. Payouts have benefited time are nearly US$ 2.0 million, 51 % of the population even before consider- about 2.5 million persons and have policyholders are women, and 69 % of ation of reconstruction and redevelop- been used by governments to meet the the policies sold are linked to agricul- ment. CCRIF and the introduction of immediate needs of their populations ture loans. Today MiCRO has operations parametric insurance in the Caribbean (see Figure 9). in four countries, working with 6 insur- were therefore born out of Hurricane ers and 9 aggregators. Ivan. CCRIF is a regional catastrophe fund for Caribbean and Central Ameri- can governments to limit the financial impact of devastating hurricanes, earth- quakes and excess rainfall events by providing quick financial liquidity when a policy is triggered. The Facility also provides parametric insurance cover for the electric utilities and fisheries sectors.

8 1 41341 Growth (%) = [( ) 15 ] – 1 94 Calculation by MV Sáenz

Figure 9 Use of CCRIF payouts since 2007

Immediate post-event activities 62 % Long-term infrastructure work 14 % Risk mitigation activities to reduce vulnerability to future natural hazard events 6 % Economic sectors, e.g. agriculture 6 % Unallocated contribution to the national budget 9 % Capitalisation of Recovery Fund 3 %

While these payments are relatively small compared to the overwhelming cost of rebuilidng, all recipient governments have expressed appreciation for rapid infusion of liquidity, which they are able to use to address immediate priorities.

Approximately 2.5 million persons have benefited from CCRIF payouts since 2007.

Source: Anthony, Isaac. Presentation “Macro, meso, micro: practical experiences at all levels of parametric insurance.” International Conference on Inclusive Insurance — Digital Edition 2020. Report International Conference on Inclusive Insurance 2020 — Digital Edition 27

On microinsurance, CCRIF has since Also, in 2019, CCRIF launched the An alternative to a macro cover 2010 been engaged with the Munich COAST product for the fisheries sector Climate Insurance Initiative (MCII) and in two member countries — Grenada Private flood insurance is emerging as other partners such as the ILO’s Impact and Saint Lucia. COAST is designed for an alternative to the National Flood Insurance Facility through the Climate individuals working in the fisheries Insurance Program (NFIP) in the USA. Risk Adaptation and Insurance in industry. COAST is unique as it is pur- This case has lessons from developing the Caribbean (CRAIC). The project chased by governments, but payouts a market in a developed economy for a addresses climate change, adaptation, are distributed to registered fisherfolk, peril that, until recently, was thought to and vulnerability by promoting to protect their livelihoods. The COAST be uninsurable: flood. weather-index-based (parametric) product provides coverage for losses insurance. The project produced the suffered by fisherfolk due to bad Over the past 15 years, the federal Livelihood Protection Policy (LPP) weather and for direct damage caused programme has survived catastrophic specifically for vulnerable low-income by tropical cyclones (wind and storm losses with increasing debt, now groups. surge) to fishing vessels, fishing equip- exceeding US$ 20bn. The take-up is ment and fishing infrastructure. low in designated flood zones, and Through COAST, vulnerable fishing far lower outside, causing adverse communities and those employed in the selection. Cover is perceived to be too sector, including boat owners, fishers, expensive. market vendors many of whom are women, and boat boys among others Many believe that if it is not required as have access to insurance developed a condition of a mortgage, they are not specifically for their needs, protecting at risk of a flood. Others think flood their livelihoods and playing a key role cover is standard in their home insur- in closing the prot ection gap. ance policy. Overall, between 50 % and 80 % of losses in recent catastrophes went uninsured, limiting and delaying disaster recovery.

Matt Chamberlain Iker Llabres Isaac Anthony Principal and Consulting Actuary, Business Manager for El Salvador and CEO, CCRIF SPC, Cayman Islands Milliman, USA Actuarial Officer, MiCRO, USA Report International Conference on Inclusive Insurance 2020 — Digital Edition 28

Session 6 Macro, meso, micro: Practical experiences at all levels of parametric insurance

To fill the protection gap, market Lessons learnt forces are moving towards increased private involvement. There is plenty of — Pricing is key. It is a symbol that — Enhancing awareness and the use reinsurance capacity, legislation has gives a better idea of the risk. of advanced technology are key. become more favourable and more There is a strong correlation However, lack of data is still a chal- reliable risk models are available, and between take-up and a mismatch lenge. consumers have begun to understand in price related to the real risk. insurance. More than 100 stand-alone — Ins urance itself does not build programmes have been launched — Parametric insurance has many resilience. Aggregators, communi- since 2013. Written premiums benefits, but it is not a silver bullet. ties, and countries in the case of increased by 56 % in 2017 and 6 % in It requires high-quality models and sovereign programmes, must aim 2018 (see Figure 10). its models need to be underpinned at building capacity in DRM and by continuous improvement and CCA a s well as DRF, and pursue modified with new data from recent other training and means to build natural hazard events. resilience. MiCRO CCRIF Microinsurance Centre

Figure 10 Private flood premium growth

Private Written Premiums (Millions) 2016—2017 2017—2018 State 2016 2017 2018 % Change % Change California 48.8 72.0 83.6 48 % 16 % Florida 47.8 84.5 79.7 77 % -6 % Texas 31.8 53.5 63.2 68 % 18 % New York 27.4 47.7 47.2 74 % -1 % New Jersey 17.0 28.9 33.6 70 % 16 % Pennsylvania 13.2 18.8 22.1 42 % 18 % Louisiana 11.5 17.9 20.5 56 % 15 % Massachusetts 9.0 15.3 17.0 70 % 11 % Illinois 9.8 14.0 15.6 43 % 11 % Ohio 5.6 14.2 15.4 154 % 8 % Indira Gopalakrishna All 50 States 412.6 641.9 681.4 56 % 6 % Microinsurance Specialist, MicroInsurance Centre at Milliman, Singapore Source: Chamberlain, Matt. Presentation “Macro, meso, micro: practical experiences at all levels of parametric insurance.” International Conference on Inclusive Insurance — Digital Edition 2020. Report International Conference on Inclusive Insurance 2020 — Digital Edition 29

Session 7 Quality Index Insurance Certification (QUIIC)

By Ulf König

How do we evaluate and “certify” t he On the other hand, the threshold may How does QUIIC work? quality of index insurance contracts? be too low, triggering payouts when The session dealt with this question, there have not been any losses (“false The idea of QUIIC is simple: an index detailing the QUIIC process and imple- positive”). This might seem fortunate at insurance product should only be mentation with a view to assisting first sight, but it will be factored into the offered to the public if customers are governments and regulators that care insurer’s pricing scheme, making premi- “better off” with it than without it. Put about more than just solvency issues. ums more expensive for everyone. into standard microeconomic notation, the expected utility of purchasing such Why QUIIC? These scenarios are not just hypotheti- a product must be higher than the cal; they transpired in Uganda. The Agro expected utility of not purchasing it. When it comes to insuring the poor, Consortium was set up as a public- who can only afford small premiums, private partnership between the govern- Figure 11 illustrates this graphically: insurers must have highly efficient ment of Uganda and eleven insurers an ideal insurance contract (dotted line) operations to stay in business. In this aiming to supply cost-efficient index should put a floor under the farmers’ context, index insurance represents a insurance products to poor farmers. feet so they make a small sacrifice by promising option, as payouts are trig- Lack of data and lack of expertise paying the premium in good years, to be gered as soon as a given index falls resulted in harmful policies. It took six protected from disastrous losses in bad below and/or surpasses a pre-set years to rebuild farmers’ trust in the years. If they had no insurance at all, threshold. This saves insurers the trou- product. Improvements proved possible their asset distribution would look like ble of assessing individual claims, as only with the help of a so-called Quality the solid line. The dots represent the they simply need to monitor tempera- Index Insurance Certification (QUIIC). different outcomes of an insurance con- ture, rainfall and other indices. Such an evaluation presents customers tract under QUIIC’s investigation: green and regulators with a means of judging dots symbolise desired outcomes, red However, designing appropriate index the quality of an insurance policy prior dots stand for false negatives, and insurance products requires enough to purchase. yellow dots represent false positives. (historical) data and expertise to cali- As can be seen, the contract in this brate the statistical models in such a example delivers ~50 % of the quality of way that customers benefit from buying an ideal contract. insurance and are not left worse off. Suppose an insured farmer loses his crop due to lack of rain. If his insurance does not pay out because the rainfall Figure 11 threshold was set unrealistically high QUIIC assessment of an index insurance contract (“false negative”), he is worse off with insurance than without it — not only has he lost his crop, he also had to pay a premium on top. Assets (USD) 1,000 No insurance Perfect insurance

800 Type 0 Type 1

Type 2

600 Type 3

Type 4

Type 5

400

Assets (USD) 400 600 800 1,000 Michael Carter Professor, University of California, MRR Innovation Lab, USA Source: Carter, Michael. Presentation “The Why & How of Measuring Index Insurance Quality.” International Conference on Inclusive Insurance — Digital Edition 2020. Report International Conference on Inclusive Insurance 2020 — Digital Edition 30

Session 7 Quality Index Insurance Certification (QUIIC)

How does QUIIC get implemented? This process takes about one week after Lessons learnt all necessary data is collected. If the UC Davis is partnering with the Nairobi- adjusted income with insurance is — Customers, insurers, and regulators based Regional Centre for Mapping of lower than that without it, the insurance have a legitimate interest in Resources for Development (RCMRD) scheme is not approved and needs knowing the quality of an index to establish a technical lab that facili- adjustment such as reduced cost struc- insurance product. QUIIC provides tates QUIIC’s implementation in South- tures, another base index, etc. In order a simple yet effective methodology ern and Eastern Africa member states. to scale this approach, RCMRD plans to for answering this question by Insurers request assessment at the strengthen its data collection capabili- comparing the customers’ expected QUIIC certification board, which is ties through networks, build up capacity income with and without insurance composed of all relevant stakeholders through training modules, and assess based on quantitative analyses. such as regulators and reinsurers. the effectiveness of QUIIC through a market-level study. — Quality certification is practically The assessment is conducted by the mandatory to establish trust in technical lab, whose employees esti- index insurance policies and foster mate policyholders’ income both with penetration. Without certification, and without insurance based on histori- harmful products will most likely QUIIC cal data. Insurance-backed income is destroy the market and tear down CEAR calculated as the expected crop size beneficial products with them. multiplied by its historical selling price, minus insurance premiums, and plus — Data availability on past index claims payments as triggered by histori- values represents the biggest chal- cal rainfall, temperature, etc. Both types lenge for implementing QUIIC of income are adjusted by farmers’ risk at large scale. Ideally, the method aversion. requires 10 years of time series data.

— If sufficient data is not available, recreating data, using proxies, or running simulations can be an alternative. Also, drones can be a meaningful alternative in the absence of satellite imagery.

Lilian Ndungu Munyaradzi Daka Glenn Harrison Thematic Lead — Agriculture and Food Consultant, Agro Insurance Consortium, C.V. Starr Chair of Risk Management & Security, Regional Centre for Mapping of Uganda Insurance, Robinson College of Business, Respurces for Development (RCMRD), Kenya Georgia State University, USA Report International Conference on Inclusive Insurance 2020 — Digital Edition 31

Agenda Day 3—4 November 2020 How to reach scale and develop inclusive insurance markets

Session 8 Session 9 Session 10 Session 11 Integrated risk How digitisation can Lessons learnt developing Leveraging sovereign management solutions spur market growth national strategies insurance to build scale

Hosted by Hosted by GIZ Speakers Hosted by MCII ILO’s Impact Insurance Facility Speakers Dante Portula Speakers Senior Advisor, GIZ, Speakers Andrea Camargo The Philippines Isaac Anthony Risk Financing CEO, CCRIF SPC, Floriano Hilot Consultant, Inspowering, UK Kemibaro Omuteku Cayman Islands CEO, Oro Integrated Head of Insurance, Cooperative, The Philippines Mohamed Feriss Financial Sector Deepening Matthew Branford Head of Department, Trust (FSDT), Tanzania Acting Accountant General, Nikhil AC ACAPS, Morocco Department of Finance, Head — Liability Products, Eduardo Morón Government of Saint Lucia, Dvara KGFS, India Mathilda Ström President, APESEG, Peru Saint Lucia Deputy CEO, BIMA, UK Sicco van Gelder Facilitator Dean Romany Director Demandside Kofi Andoh President, Guardian General Financing, PharmAccess Deputy Commissioner of Lemmy Manje Insurance Limited, Trinidad Foundation, Netherlands Insurance, National Founder and CEO, and Tobago Insurance Commission, FinProbity Solutions, Zambia Facilitator Ghana Dirk Kohler Insurance Advisor, MCII, Aparna Dalal Wolfgang Buecker Germany Senior Technical Officer, Head of Sector ILO’s Impact Insurance Programmes/ Facilitator Facility, Switzerland Cluster Financial Systems Development and Elizabeth Emanuel Global Initiative for Access Corporate Communications to Insurance, GIZ, Germany Manager/Technical Assistance Manager, Facilitator CCRIF SPC, Cayman Islands

Hui Lin Chiew Jennifer Phillips Advisor, Access to Insurance Associate Project Manager, Initiative , Germany Munich Climate Insurance Initiative, Germany Report International Conference on Inclusive Insurance 2020 — Digital Edition 32

Session 8 Integrated risk management solutions

By José Miguel Flores Contró

The session addressed the importance Examples from the Box 5 of bundling insurance with other finan- Philippines and India OIC’s Health & Disaster Savings cial services for risk management. Pan- ellists presented insurance products Oro Integrated Cooperative (OIC) Purpose: integrating with other financial services was founded in 1966 as the first credit Save for an emergency: to create affordable risk management union in Mindanao, the second largest health and calamities solutions for low-income people. A par- island of the Philippines. In the first Number of people insured: ticular focus was leveraging digital tools week of March 2020, it launched two 420, with savings of to improve access and care. products in which insurance is inte- PHP 430,000 (US$ 8,958) grated with savings, one for children’s Insured risks: Insurance is considered the principal education, and one for health and disas- Free calamity insurance on mechanism for coping with risk. For the ter emergencies (see profile Box 5). accumulated balance of PHP 5,000 rural and urban poor, other ways of risk (US$ 103), 100 % property damage management and coping — such as The products were designed after mar- due to natural calamity for PHP 6,500 using savings and assets and informal ket research that included views of (US$ 130), health reimbursement group-based risk-sharing — provide members and focus groups, interviews due to peril for PHP 500 (US$ 10) only limited protection, leaving them with staff, questions about risks faced, Savings and interest rates: exposed to severe shocks. Insurance coping mechanisms, savings and credit 5 % on minimum of PHP 6,000 can help low-income people to get out behaviour and brainstorming sessions (US$ 120) and maximum of PHP or stay out of poverty by reducing the (see Figure 12). 30,000 (US$ 600) per annum financial burden of shocks. Moreover, Deposit term: for overall risk management, insurance Minimum 5 years can be offered or integrated with other financial services such as credit, savings, money transfers and remittances.

Figure 12 OIC’s product design methodology

One on one interview with members including FGDs

Interviews with staff

Questions about risks faced, coping mechanism, saving and credit behavior

Brain storming product ideas

Floriano Hilot CEO, Oro Integrated Cooperative, The Philippines Source: Hilot. Floriano R. Presentation “Integrated Risk Management Solutions”, International Conference on Inclusive Insurance — Digital Edition 2020. Report International Conference on Inclusive Insurance 2020 — Digital Edition 33

Dvara Kshetriya Gramin Financial Box 6 The DSSP investment products include Services (Dvara KGFS), based in Dvara Sampoorna a liquid money market mutual fund Chennai, Tamil Nadu, has since 2008 Sampath Plan (DSSP) and a Gold SIP (systematic investment operated in six states of India to maxim- plan). The first one is a simple invest- ise the well-being of individuals and Number of people insured: ment tool that is low-risk and offers enterprises through access to financial 20,000 decent returns. The latter allows house- services in remote rural areas. Offering Insured risks: holds to invest in gold in a convenient, savings, credit and remittances, by Hospitalisation, personal accident, life secure and cost-effective manner. 2019 the company was serving more Premium range: Gold SIP enables them to buy a fixed than a million clients through 306 Personal accident Rs. 57 (US$ 1) to amount of gold on a regular basis on a branches. In October that year it added Rs. 572 (US$ 8) per annum; group specific date of every month, quarter investment and insurance products term life Rs. 621 (US$ 8) to Rs. 1086 or year. to its portfolio and piloted them through (US$ 15) per annum an integrated offering named Dvara Risk solutions for health Sampoorna Sampath Plan (DSSP). PharmAccess works to improve health- Encouraging people to save some care markets in sub-Saharan Africa so amount of their income, the company they can deliver affordable and better- prepares and analyses a financial quality healthcare for everyone. It does well-being report on clients. Then, using this by following a holistic approach advance machine learning models, it with five core elements: access to offers products that best fit the clients’ finance with the Medical Credit Fund needs and characteristics, in particular (MCF), social health insurance, digital the surplus income they can set aside. In health financing platforms, clinical addition to insurance (see profile Box 6), innovations, quality assessments and DSSP provides financial planning while improvement using the S afeCare meth- helping to diversify investment. The odology, and research and analysis. product is structured in four stages: plan, grow, protect and diversify. This support for financially challenged rural households helps them cultivate a systematic savings habit.

Nikhil AC Sicco van Gelder Aparna Dalal Head — Liability Products, Dvara KGFS, India Director Demandside Financing, Senior Technical Officer, PharmAccess Foundation, Netherlands ILO’s Impact Insurance Facility, Switzerland Report International Conference on Inclusive Insurance 2020 — Digital Edition 34

Session 8 Integrated risk management solutions

In addition, PharmAccess has been Box 7 leveraging successful experiences Financial products for of mobile money technologies such health enabled by M-TIBA Oro Integrated Cooperative as M-PESA and the fact that 90 % of Dvara KGFS Africans now have a mobile phone. — Health wallet post-paid (savings) PharmAccess In 2015, it launched M-TIBA,9 a mobile M-TIBA health platform that allows people to — Health wallet pre-paid (loans) ILO’s Impact Insurance Facility save, borrow money for healthcare and pay premiums for health insurance, — Risk pooling through while enabling payers (governments, shared wallet (groups) donors and insurers) to offer products such as vouchers, managed funds — Hybrid bundled products and insurance. Its key feature is to connect payers, healthcare providers — Insurance with premium and users through mobile technology financing (loans) (see Figure 13). — Insurance prepaid More than 4.6 million people and 3,500 (savings and remittances) providers are now connected to the M-TIBA platform. While mobile healthcare exchanges like M-TIBA make even the most vulnerable directly accessible, digital health solutions (e.g. telecon sultations, online health information and applications for symptoms assessments) point the way to the future (see Figure 14). Figure 13 M-TIBA mobile health exchange

From this situation… … to this situation

NHIF/ Clinic NHIF/ Clinic Government Government

Employer Clinic Employer Clinic contributions contributions

Private contribu- Clinic Private contribu- Clinic tions/Savings tions/Savings

Mobile Health Wallet Private Clinic Private Clinic insurance insurance

Donor Clinic Donor Clinic contributions contributions

Patient/ Patient/ Beneficiary Beneficiary

9 Source: Van Gelder, Sicco. Presentation “Risk solutions for health.” Tiba means care in Swahili International Conference on Inclusive Insurance — Digital Edition 2020. Report International Conference on Inclusive Insurance 2020 — Digital Edition 35

Lessons learnt

— Mobile financial services enable — Digitisation provides opportunities new forms of health financing, to combine financial and health risk closing a gap between out-of-pocket solutions in an easily accessible way. payments and health insurance. — Providing access to good quality — Risks in healthcare are not limited healthcare is as important as to financial ones, and integrated providing financial risk solutions, risk solutions therefore need to such as health insurance. Therefore, incorporate preventative, curative health financing also needs to and promotional health services. include a robust purchasing function.

Figure 14 The health journey

Self-management tools Online health Monitoring & information management of NCDs Health, healthcare & health financing Healthy

Recovery & Sick management

(Tele)consultation Seeking Triage tools Anamnesis, testing, treatment Chatbots/apps for treatment & referral symptom assessments

Source: Van Gelder, Sicco. Presentation “Risk solutions for health.” International Conference on Inclusive Insurance — Digital Edition 2020. Report International Conference on Inclusive Insurance 2020 — Digital Edition 36

Session 9 How digitisation can spur market growth

By Kira Henshaw

This session focused on key regulatory 1. The level of digitisation of the On the demand side, digital culture, enablers for digitising insurance insurance value chain allowed empowerment and consumer engage- processes. It examined three cases at by regulation. ment play an important role. Cultural different stages of digital market barriers such as attachment to cash- development. 2. The possibility to use innovative based methods, acceptance of demate- providers and business models. rialisation and trust create obstacles to A tool for regulators digitisation. 3. The level of efficiency and col The Covid-19 restrictions on physical laboration of authorities involved. Policy considerations include account- interaction spurred digitisation, pressing for unintended consequences of ing regulators to adopt proportionate Innovation requires an understanding of digital insurance. Digitisation may gen- approaches that facilitate digital prod- mobile and inclusive insurance market erate exclusion and discrimination, with uct provision and service. An upcoming development levels, and penetration inequalities in infrastructure access GIZ white paper “How can supervisors and usage of digital financial services due to the availability and affordability unlock responsible mobile insurance (see Figure 15). of mobile devices and data plans — and promote access to insurance?” wome n are often disproportionately formed the basis for discussion. It will Supply, demand and policy factors disadvantaged. also provide a tool for regulators to self-assess the appropriateness of their Supply-side challenges include limita- Many innovative industry and private frameworks. tions of digital information technology, sector players seek regulatory approval mobile phone coverage and power within a good time frame to bring prod- Digitisation reduces friction throughout supply reliability. Digitisation has not ucts to the customer. Some countries the value chain by increasing speed, taken off uniformly. Strong digital infra- may face difficulties in keeping up with security and transparency. It builds structures in Kenya, Ghana, Tanzania quickly occurring reforms. trust, permits scale, reduces product and India have become the backbone costs, and unlocks business opportuni- of payment systems, while infrastruc- ties, models and tailored products. tures in Morocco and Egypt are still Three dimensions of regulation need to developing. The priority a country gives be considered for digitisation: to digitisation drives supply.

Figure 15 Development of digitisation

Insurance market development Digitisation development

Stage 4 Stage 3 Widespread adop- Stage 1 Stage 2 Stage 3 Stage 4 Stage 2 Moving beyond tion and usage of Nascent Early growth Early retail Diversified Stage 1 More intensive payments to other DFS by individuals and retail Basic access usage of transaction DFS products (e.g. and MSMEs compulsory to transaction accounts for digital credit, insurance) accounts payments China, USA, Sweden Kenya Bangladesh, Ghana, Brazil, India, Thailand, Tanzania, Algeria, Turkey, Kazakhstan Côte d’Ivoire, Egypt, Ethiopia, Indonesia, Morocco, Nigeria, Mozambique, Rwanda, Pakistan, Peru, Senegal, Vietnam, Zambia Insurance penetration Insurance Predominantly Increased penetration of and Fully digital Economic development cash-based usage of digital financial services

Source: Camargo, Andrea. Presentation “How supervisors can unlock responsible mobile insurance and promote access to insurance.” International Conference on Inclusive Insurance — Digital Edition 2020. Report International Conference on Inclusive Insurance 2020 — Digital Edition 37

Box 8 A conducive payments landscape and The Ghanaian National Insurance Digitisation trends in the market consumers’ comfort with payment Commission (NIC) has no restrictions channels is what makes or breaks a on the nature of players or on which 1. Increased comfort and use of mobile business model — regulation often parts of the value chain can be digitised. money and new payment channels, serves as a hygiene factor. Distribution All proposals and associated risks particularly for subscribers. and payment challenges should be are assessed, ensuring appropriate prioritised, updating outdated laws consumer protection measures while 2. Increased comfort and use of smart- and regulations prohibiting digitisation mitigating adverse effects on market phones, digital services and social of distribution and payments. There stability. The NIC supports cross- media channels; increased product should be clarity over the government governmental discussions and aims to engagement, claims and picture/ entity owning decisions in the space. avoid gaps and duplication in processes video contact. by collaborating with other regulatory Experience from Ghana authorities, thereby improving the effi- 3. Development of marketing and pro- ciency of the market. It recommends motion methods; digital marketing — Mobile network operators play a pivotal that regulators: new ways of generating consumer role in providing access to insurance in trust and providing information on Ghana, with government-approved — focus on principle-based regula- health services. interoperability smoothing digital pro- tions — strictly define what has to cesses — over 65 % of inclusive insur- be done and why; 4. Development of new insurance ance is sold through mobile phones. selling channels. — build capacity for innovation — acknowledge and embrace digiti sation in insurance; and

Source: Ström, Mathilda. “How supervisors can unlock responsible mobile insurance and promote access to — review results — innovation changes insurance.” International Conference on Inclusive Insurance — risks. Digital Edition 2020.

Andrea Camargo Mohamed Feriss Mathilda Ström Risk Financing Consultant, Inspowering, UK Head of Department, ACAPS, Morocco Deputy CEO, BIMA, UK Report International Conference on Inclusive Insurance 2020 — Digital Edition 38

Session 9 How digitisation can spur market growth

Experience from Morocco Lessons learnt

Although interaction with digital tools — Regulation can play an important — Coordination and cooperation and insurance is changing, mobile role in enabling digitisation through- frameworks between different regu- insurance remains a nascent market in out the insurance value chain — pro latory authorities are important to Morocco. The Supervisory Authority of duct design, data collection, distri create synergies, exchange expertise, Insurance and Social Welfare (ACAPS) bution, premium payments, claim work on regulatory solutions and facilitates a digitally seamless insur- payouts, identity verification, dema- ensure clarity on which entities own ance process, with a strong overarching terialisation and onboarding. Regu which space. financial inclusion strategy, while lators need to understand how these embracing alternative channels and new processes work, and update — Stakeholders need to systematically partnerships with varying stakeholders. laws and regulations accordingly in consider enabling and hindering order not to constrain new business factors of mobile insurance deve Network coverage, dematerialisation models. lopment to know how to move for- and digital trust pose barriers for the ward in the market. Moroccan mobile insurance market — — The dynamic between regulators and many fear digital solutions (although industry partners needs to change — — Regulators play an important role in over 70 % have smartphone access). regulators and industry need to increasing financial literacy, cr eating ACAPS acknowledges the internet collaborate consultatively and trans- industry legitimacy, building trust, and mobile technology evolution and parently, supported by clear regula- and ensuring customer pr otection — aims to ease constraints jeopardising tory processes and fast approvals. all stakeholders s hould collaborate national access to insurance. Launch to improve customer education. of an electronic national biometric ID and recognition of electronic documents and signatures will ease enrolment and claims processes.

A2ii BIMA ACAPS NIC Ghana

Kofi Andoh Wolfgang Buecker Hui Lin Chiew Deputy Commissioner of Insurance, Head of Sector Programmes/Cluster Advisor, Access to Insurance Initiative, National Insurance Commission, Ghana Financial Systems Development and Global Germany Initiative for Access to Insurance, GIZ, Germany Report International Conference on Inclusive Insurance 2020 — Digital Edition 39

Session 10 Lessons learnt from national strategies

By María V. Sáenz

National strategies for financial inclu- Box 9 Initially, microinsurance was considered sion are a prerequisite for successful Microinsurance market highlights part of microfinance, and only part of market development. Their aim is to the CSR (corporate social responsibil- address market failures by stimulating Population 100 m ity) of insurance entities. However, the demand and supply, creating an Microinsurance clients 45 m growing market and opportunities enabling environment through specific Population served 45 % meant that microinsurance needed to regulation, providing incentives for busi- be tackled independently. With the Financial landscape ness growth, and creating awareness help of GIZ of Germany and the ADB and educating consumers. In this ses- — Banks 587 Japan Fund for Poverty Reduction, sion, Tanzania, the Philippines and Peru — Intermediaries and a multi-stakeholder working group, the shared their experience with national pawnshops 45,000 process started by mapping the gaps strategies for the development of inclu- — Total insurance companies 122 and inefficiencies, which was followed sive insurance markets. Insurers participating in the by policy papers, which the industry microinsurance market 42 and the public reviewed. The feedback The Philippines Insurers participating in the received formed the basis of the National Strategy of 2010, which pro- microinsurance market 34 % The Philippines case explains the vided the market with a clear definition importance of a systematic approach Microinsurance premium of microinsurance, the targeted market, to implementing a national strategy. 2019 US$ 178.40 m and the players’ roles. The legislation It reflects more than 10 years’ work % of total industry 3 % moved to formalise the situation of involving all of the stakeholders — Number of registered informal providers and created special public and private — as well as all the microinsurance products 215 agents and brokers, and other delivery possible legal instruments. channels. All of these actions facilitated the inclusion of other suppliers beyond

Source: Sáenz, Maria V. Data compiled from the joint presenta- the Mutual Benefit Associations tion of Session 10 of the International Conference on Inclusive (MBAs). In 2013, a dedicated section Insurance — Digital Edition 2020, SBS Document 2020. on microinsurance was incorporated into the Amended Insurance Code of the Philippines, which effectively institutionalised the various regulatory statements on microinsurance.

Dante Portula Kemibaro Omuteku Eduardo Morón Senior Advisor, GIZ, The Philippines Head of Insurance, Financial Sector President, APESEG, Peru Deepening Trust (FSDT), Tanzania Report International Conference on Inclusive Insurance 2020 — Digital Edition 40

Session 10 Lessons learnt from national strategies

To further promote a conducive environ- Tanzania Peru ment for the development of the market, and with the information compiled Tanzania has a population of 56.3 mil- Nineteen insurance companies make from thorough market research, the lion. In 2017, some 65 % of adults had up the insurance sector, of which eight working group developed prototypes of access to and used financial products, participate in the microinsurance mar- products and made them available to including about 8.45 million or 15 % ket. The potential market for micro- all stakeholders. At the same time, the covered by insurance. The market has insurance in Peru is 26.2 million people regulator was working on a review of one reinsurer, 30 insurers, 109 brokers, (82 % of the total population), defined policy contracts, setting performance and 635 agents. According to the as people who earn between US$ 2 and standards and defining an alternative National Financial Inclusion Framework 20 per day. In 2019, microinsurance dispute resolution mechanism. (NFIF) 2018—2022, the microinsurance covered 5.2 million people (20 % of the market includes 12 providers offering 18 potential market), and premiums The whole process is accompanied by types of product, basically life, personal amounted to US$ 35.7m (3 % of the a financial literacy strategy; training accident, credit, hospital cash, and crop US$ 1.3bn for the entire industry). The materials and modules were developed, and livestock. main products offered are individual and seminars delivered on a regular life insurance (33 %), personal accident basis to different audiences, from law- The process of defining a national strat- (20 %), and group life (14 %). makers to low-income people. egy started in 2012 with an insurance diagnostic survey, followed by the initial The process of developing a regulatory regulations and a draft microinsurance framework for microinsurance started strategy in 2013. The approval of the in 2007, when the government, through final design of the strategy came in the SBS (Superintendency of Banks 2014. Since then and up to 2020, with and Insurance), decided to stimulate the NFIF’s approval, Tanzania has fol- the microfinance sector. Today, micro- lowed a path similar to the Philippines. insurance regulations are aligned with The strategy and its implementation are all the applicable laws and regulations based on four pillars: for the financial sector. In 2015, the Multi-sector Commission of Financial 1) Regulatory environment Inclusion launched the National Finan- 2) Demand stimulation cial Inclusion Strategy. Many of its gen- 3) Supply strengthening eral provisions can apply to insurance, 4) Fundraising and it contains eight different indicators related to inclusive insurance. With the active involvement of multi- stakeholders in the committees respon- The roadmaps the three countries have sible for each pillar, the strategy lends followed for market development are significant weight to financial literacy shown in Figure 16. and training among national priorities. The strategy’s objective, embedded in The three countries followed similar the NFIF, is to cover 50 % of the popula- paths of stakeholder consultation, lead- tion with at least one insurance product. ing to a set of initial regulations, followed by new sets of enhanced regulations or, as in Tanzania, the definition of a National Inclusive Insurance Strategy. All three countries received financial support from development agencies.

FSDT NFIF APESEG MEFIN

Lemmy Manje Founder and CEO, FinProbity Solutions, Zambia Report International Conference on Inclusive Insurance 2020 — Digital Edition 41

Lessons learnt

— All the main stakeholders in the — Define metrics for success. — Advocacy and awareness-raising strategy need to be engaged through are a continuous effort. all the processes to achieve success. — Capacity-building is an ongoing effort. Markets change, regulations — Important to promote resilience — Regulators have a dual role: change; the stakeholders should while empowering customers supervisory and enabling the market. be able to adapt products and through financial literacy and con- regulations. sumer protection. — It is essential to start with market research and study of regulatory — Reaching scale and sustainability — It is important to keep the end- barriers and gaps. is a goal to be set in stages with users of the inclusive insurance a long-term vision. products at the centre of the — Implementing national strategies national strategies and following up on their results is not easy, and it takes years.

Figure 16 Inclusive insurance roadmaps

2007 2008 2009 2010—2012 2013 2014—2015 2016 2017 2018—2020

National Strategy Alternative Health and Enhanced and Regulatory dispute Agriculture MI regulatory Framework resolution frameworks framework (2016) (2010) mechanisms (2015) Roadmap to (2013) financial literacy

The Philippines in MI (2011)

Insurance MI regulations National MI MI Landscape MI Strategy Sustainability Diagnostic and draft of MI coordinator survey Fin Disrupt Training of Survey (2012) strategy (2013) Industry capacity Definition and Insurance trainers building. application of Regional Busi- MI regulations MI strategy Key Performance ness Cases revised (2018) Creation of Steer- Indicators Bancassurance ing Committee Capacity building Training of Tanzania and Technical trainers (2019) Working Group National Inclusive (2014) Insurance Strategy (2020)

1st regulation. Analysis of Second version New insurance General insur- Associated Revised regula- Arbitrary limits documents by of MI Regulations for the whole ance contract initiatives: tions shifting to Government try- CGAP, IAIS and No limits, focus sector, not just MI law and related A2ii Country a qualitative ing to regulate the Protecting the on low-income regulations Diagnostic approach with the MI activity in Poor: a MI population, on consumer National emphasis on eas- a very regulated Compendium, simple language, protection, Financial ing the process microfinance Munich Re and minimal exclu- transparency, Inclusion for registration of Peru environment and MiN sions, payments electronic poli- Strategy (2015) products with the objective in 10 days cies, premium of facilitating payments, claims the expansion of payments, etc. microfinance Massive products

Source: Sáenz, Maria V. Flowchart compiled from the joint presentation of Session 10 of the International Conference on Inclusive Insurance — Digital Edition 2020. SBS Document “Caso de estudio: Desarrollo del mercado de microseguros en Perú,” and A2ii Perú Country Diagnostic — 2014. Report International Conference on Inclusive Insurance 2020 — Digital Edition 42

Session 11 Leveraging sovereign insurance to build scale

By Ulf König

This session addressed ways to scale up CCRIF’s approach CCRIF is a captive insurance company access to microinsurance through sover- providing a bespoke insurance solution eign risk pools such as CCRIF SPC CCRIF is a regional catastrophe fund that enables it to provide unique and (formerly the Caribbean Catastrophe for Caribbean and Central American tailored insurance/cover that is not Risk Insurance Facility). The session also governments to limit the financial readily available in the commercial mar- focused on the role of other sectors, impact of devastating hurricanes, earth- ket. CCRIF has 23 members — 19 gov- private and public, including local gov- quakes and excess rainfall events by ernments from the Caribbean, three ernment agencies and non-governmen- quickly providing financial liquidity governments from Central America and tal organisations, in supporting the when a policy is triggered. The Facility one Caribbean electric utility company. scaling-up of microinsurance products. offers 5 parametric insurance prod ucts — for tropical cyclones, earth- Since its inception in 2007, CCRIF has quakes, excess rainfall, for the fisheries made 49 payouts totalling US$ 197m to and electric utilities sector. Parametric 15 member governments. An analysis insurance products are very different by CCRIF in 2019 shows that about 2.2 from indemnity insurance as they are million persons have been direct or indi- insurance contracts that make pay- rect beneficiaries of CCRIF payouts. ments based on the intensity of an About 62 per cent of payouts have been event (e.g. wind speed, earth shaking, used by governments to support imme- amount of rainfall, etc.) and the amount diate needs of the population, such as of loss calculated in a pre-agreed providing food, shelter and medicine for model caused by these events. CCRIF affected persons including women, chil- parametric insurance products are dren and the elderly, and providing a key component of member countries’ building materials for persons to repair disaster-risk financing strategies. their homes (see Figure 9, Session 6).

“Climate change has no season”

Matthew Branford, Acting Accountant General, Department of Finance, Government of Saint Lucia, Saint Lucia

Isaac Anthony Matthew Branford Dean Romany CEO, CCRIF SPC, Cayman Islands Acting Accountant General, Department President, Guardian General Insurance of Finance, Government of Saint Lucia, Limited, Trinidad and Tobago Saint Lucia Report International Conference on Inclusive Insurance 2020 — Digital Edition 43

Participating governments benefit from: Role of governments in scaling CCRIF helps governments make micro- microinsurance and how CCRIF helps insurance more accessible with two — access to quick liquidity following products. One product is a livelihood a natural disaster, within 14 days of If microinsurance is seen as a suitable protection policy for which CCRIF part- an event allowing them to address path towards building more resilience ners with the Climate Risk Adaptation their immediate needs; in the population, governments can take and Insurance in the Caribbean several measures. First, they can incor- (CRAIC) initiative and with Trinidad and — lower premiums as a result of porate microinsurance as a part of their Tobago-based Guardian General Insur- pooling risks; social protection programmes — by pur- ance from the private sector. chasing the insurance policy and nam- — cost savings in the range of 25—50 %; ing affected individuals as beneficiaries The other is COAST for fisheries, which to receive claims payments. This would is a parametric insurance product — access to reinsurance and obviously require setting aside amounts designed for individuals working in the international capital markets; for insurance premiums in the yearly fisheries industry. COAST is unique as it budget. Second, if paying premiums is purchased by governments but pay- — risk segregation; and centrally is not an option, subsidies or outs are distributed to registered fisher- tax relief could be allocated. Third, gov- folk as a means of protecting their liveli- — improved collaboration with other ernments can require proof of livelihood hoods. The COAST product provides member states in sharing best protection as part of farmers’ or fishers’ cover for losses suffered by fisherfolk practices and lessons learnt. or even micro, small and medium-sized due to “bad weather” and for direct enterprises’ (MSMEs) registration pro- damage caused by tropical cyclones cess. Lastly, governments can play a key (wind and storm surge) to fishing ves- role in sensitising the population to the sels, fishing equipment and fishing value of livelihood protection and the infrastructure. Through COAST, vulner- role of insurance. able fishing communities and those employed in the sector, including boat owners, fisherfolk, market vendors, and boat boys among others have access to insurance developed specifically for their needs, protecting their livelihoods and playing a key role in closing the protection gap. Since 2019, two Caribbean countries — Grenada and Saint Lucia — have purchased COAST policies, with other countries expected to follow in the near future.

Dirk Kohler Elizabeth Emanuel Jennifer Phillips Insurance Advisor, MCII, Germany Corporate Communications Manager/ Associate Project Manager, Munich Climate Technical Assistance Manager, CCRIF SPC, Insurance Initiative, Germany Cayman Islands Report International Conference on Inclusive Insurance 2020 — Digital Edition 44

Session 11 Leveraging sovereign insurance to build scale

Challenges in implementation Lessons learnt

Among the biggest challenges in intro- — Microinsurance is not the only pillar, ducing government-supported micro- but one of the more important insurance schemes is how to explain ones in sovereign risk financing as insurance to first-time buyers who are it pr ovides faster relief than long- also low-income persons who are most term rebuilding measures. probably not financially literate. It can be difficult for them to grasp the — Governments can play a pivotal nuances of an insurance contract — for role in promoting microinsurance example, the difference between a pol- schemes and can even take over icy that protects a farmer’s crop and one the insurance premium in order to that protects his livelihood but not his protect their citizens from loss. crop or farm. — Partnerships are key to implemen Offering a parametric product without tation, which requires an insurance as many clauses and conditions as an carrier, regulatory support, agents indemnity product is an advantage that and brokers to educate customers, helps build customers’ trust. However, and a technology partner under- insurers and regulators need to ensure pinning everyone’s contribution. that the design of parametric products minimises the likelihood of false nega- — NGOs, churches and cooperatives tives (no payout because the index was can be valuable partners that bring set too high) as well as false positives together and help educate large (payouts triggered when there were no groups of customers. losses). (See details in Session 9 on Quality Index Insurance Certification.) — Harmonising regulatory requirements across countries would Yet another challenge is how to scale up greatly contribute to the success quick payments to individuals. Prelimi- of microinsurance schemes backed nary testing suggests that payments by governments. within days are possible, but can this approach work at scale? Blockchain technology could be a potential solution and first pilots are being conducted.

Last but not the least of challenges is keeping up with the changing landscape of risks. Does a parametric product continue to cover primarily wind and rain losses while there is increasing risk of drought?

CCRIF MCII Report International Conference on Inclusive Insurance 2020 — Digital Edition 45

Agenda Day 4—5 November 2020 New products and solutions to increase insurance outreach

Session 12 Session 13 Session 14 Session 15 Insurance from a distance: Developing insurance Innovative distribution Analysing the client value Using remittances to markets for SMEs models — High touch of hospital cash products increase protection vs. low touch: Is face to Hosted by the face really necessary? Hosted by the Speakers Microinsurance Microinsurance Network and GIZ Hosted by EA Consultants Network and Michele Grosso ILO’s Impact Founder and CEO, Speakers Speakers Insurance Facility Democrance, UAE Jeremy Gray Ashok Shah Speakers Kate Rinehart-Smit Resilience Team Lead, Group CEO, Apollo Group/ Senior Associate, Cenfri, The Centre for Financial APA Insurance, Kenya Neto Ikpeme South Africa Regulation and Inclusion Founder and CEO, (Cenfri), South Africa Francisco Reyes Wellahealth, Nigeria Michal Matul Co-founder & CEO, Head of VAS, consumer Monirul Hoque Mango Life, Mexico Erik Jarrin Peters insights and training, Planning Manager, Head Latin America — AXA Emerging Microinsurance, Mauricio Osorio Sanchez Life Division, Barents Re, Consumers, France BRAC, Bangladesh President, Crezcamos, USA Colombia Facilitator Siani Malama Anne-Sophie Triboulet Head of Business Facilitator Microinsurance Project Craig Churchill Development & Inclusive Manager, Women’s World Chief, Social Finance Insurance, Hollard, Barbara Magnoni Banking, Uganda Programme, ILO, Zambia President, EA Consultants, Switzerland USA Facilitator Facilitator Lisa Morgan Gregor Sahler Technical Officer, Advisor, GIZ, Germany ILO’s Impact Insurance Facility, Switzerland Report International Conference on Inclusive Insurance 2020 — Digital Edition 46

Session 12 Insurance from a distance: Using remittances to increase protection

By Ulf König

Most migrant workers send part of their How RLIPs work Box 10 salary back home to support their fami- Covid-19’s effect on remittances lies and relatives in their home countries. RLIPs basically have four models, differ- Such remittances may come with some ing in the party whose risks are covered Remittance flows to low- and middle- embedded protection, which can be and where the underwriter is based. income countries (LMICs) touched coupled with targeted insurance covers The most common model covers the a record high of US$ 548bn in 2019, for senders and receivers. This session remittance senders’ risks with an but are expected to decline by 7.2 explored remittance-linked insurance underwriter in the sending country. percent to US$ 508bn in 2020, fol- products (RLIPs) while providing two Other models, in order of increasing lowed by a further decline of 7.5 real-life examples of how to overcome regulatory complexity, cover: the send- percent to US$ 470bn in 2021. challenges of implementation. ers’ duty-of-support risk with an underwriter in the sending country; the Despite the projected decline, the receivers’ risks with an underwriter in importance of remittances as a source the receiving country; and the house- of external financing for LMICs is hold unit risks with a single underwriter expected to increase further in 2020. in either the sending or receiving country. In most cases, RLIPs are distributed The top remittance recipient countries to customers through remittance ser- are India, China, Mexico, the Philippines vice providers (RSPs) such as money and Egypt. Major migrant-hosting transfer operators (e.g., Western Union), countries are in North America and banks, e-money service providers and Europe, plus the Arab states of the Gulf post offices. Cooperation Council (GCC).

Source: Migration and Development Brief 33: Covid-19 Crisis Through a Migration Lens, World Bank, October 2020.

Michele Grosso Kate Rinehart-Smit Michal Matul Founder and CEO, Democrance, UAE Senior Associate, Cenfri, South Africa Head of VAS, consumer insights and training, AXA Emerging Consumers, France Report International Conference on Inclusive Insurance 2020 — Digital Edition 47

The case for RLIPs However, no opportunity comes without With ongoing product innovation, a its challenges, and this is also true of temporary disability allowance of RM Among factors making the case for RLIPs. Regulatory barriers and the quest 100 (US$ 24.50), payable every five RLIPs, first and foremost is the demand for suitable partners are two of the most days, was added, followed by cover for for them in the large number of pressing issues. The former may involve sickness-related leave and hospitalisa- migrants already sending remittances cross-border payments, data protection tion, not just accidents. AXA also intro- (see Figure 17). Reasons for sending and sharing, or bundling of separate duced free-of-charge telemedicine money home range from payment of financial services. Also crucial are suita- services for both remittance senders health expenses (84 %), an insurable ble alliances between insurers, RSPs and receivers for a pilot period of three risk, to insurance premiums themselves and IT partners, as illustrated by two months. Offered in partnership with (21 %). The latter is remarkable consid- cases. provider Connect and Heal, the benefit ering the low penetration of insurance included care by doctors able to speak in the home country markets. AXA’s RLIP market entry in Malaysia the patients’ own language. Since its launch, Merchantrade Insure has RLIPs help build resilience by increas- AXA insures more than 200,000 paid 300 claims, two-thirds of which ing insurance uptake and ensuring a migrant workers globally. In May 2018, were for temporary disability. sustained flow of money, especially AXA launched its first Malaysian RLIP where the sender works in the informal “Merchantrade Insure” in cooperation sector without access to other protec- with local remittance service provider tion. With a multiplying effect, RLIPs Merchantrade. Within six months the penetrate each insured’s community. venture had issued more than 20,000 Insurers have clear incentives for RLIPs voluntary opt-in policies. as they can tap an easy-to-reach customer base. RSPs also benefit from diversifying their revenue streams and expanding their value proposition, translating into higher transaction frequency and enhanced customer loyalty.

Figure 17 Existing demand among senders for such products Quantitative survey results of 1,146 digital RSP senders sending from UK to Cameroon, Kenya, Nigeria and Uganda

Reason for sending % respondents

84 % 82 % 78 % 75 % 65 % 62 % 58 % 36 % 25 % 21 %

Health Funeral Business Insurance School fees HH expensesCelebrations Bill payments Loan payment Craig Churchill No specific reason Chief, ILO’s Social Finance Programme & Team Leader, Impact Insurance Facility, Switzerland Source: Rinehart-Smit, Kate. Presentation “ICII: Remittance-Linked Insurance Products.” International Conference on Inclusive Insurance — Digital Edition 2020. Report International Conference on Inclusive Insurance 2020 — Digital Edition 48

Session 12 Insurance from a distance: Using remittances to increase protection

Box 11 Partner with technology providers Lessons learnt Merchantrade Insure (AXA), Malaysia In October 2019, AXA Gulf launched an — The potential for RLIPs is huge Number of people insured: insurance scheme for migrant workers, for both leveraging resilience and 20,000+ domestic helpers and their families tapping new customer segments. Insured risks: in home countries in collaboration with Personal accident, hospitalisation, RISE, a fintech dedicated to democra- — Having skilled partners, especially temporary disability tising access to financial services. The for IT implementation, is a major Premium: new offering is powered by a digital precondition for success. RM 60 (US$ 15) p.a. platform supported by AXA Emerging Customers. Called Software-as-a- — Insuring remittance senders is now Service (SaaS), it was developed by the prevalent approach in the market, Democrance, an insurtech start-up. but covering receivers is also on the The tool enables insurers to build on a radar. fully digitised customer journey along Source: Matul, Michal. Presentation “Protection solutions the whole value chain, from digital — Insurance schemes offering immedi- for migrant workers.” International Conference on Inclusive Insurance — Digital Edition 2020. sales campaigns to policy administra- ate client value such as a temporary tion and issuance to claims filing and disability cover and telemedicine payment. The front end is mobile- services are attractive to customers. friendly and data is transmitted in real- time, fuelling powerful data analytics — There remain many regulatory algorithms in the back end and provid- uncertainties, which need clarifica- ing meaningful customer insights. tion and maybe even a coordinated lobbying approach in both the The key to the success of RISE is the remittance-sending and receiving platform’s ability to pair finance educa- markets. tion with financial services. AXA Emerging Customers’ advice to any — Going beyond remittance-linked insurer eyeing the RLIP market is, distribution, invest in multi-channel, “Don’t even start without a seamless ongoing, native marketing to drive customer journey and an agile tech behaviour change. partner.”

As an IT partner specialising in remittances and insurance from a distance, Democrance is assisting insurers in 12 countries in the Middle East, Southeast Asia and Latin America.

Cenfri AXA Democrance Report International Conference on Inclusive Insurance 2020 — Digital Edition 49

Session 13 Developing insurance markets for MSMEs

By Maria V. Sáenz

Micro, small and medium-sized enter- Challenges and opportunities The paper presented identified four prises (MSMEs), the backbone of econ- emerging opportunities: learn from the omy in developing countries, face many Challenges insurers face in serving microinsurance experience but do not risks, but most are unprotected by insur- MSMEs range from difficulty of access take it at face value as not all of it ance. With larger businesses covered to their heterogeneity (see Figure 18). applies to MSMEs; understand the sec- by mainstream insurers and low-income tor and its risk management needs; people by inclusive insurance, MSMEs A quick survey of participants showed become a risk manager partner rather are the “missing middle”. Findings of a that the more critical challenges are the than just an insurance provider; and paper “Managing risks (more) effectively: lack of understanding and knowledge align the incentives of aggregators/ Rethinking insurance for MSMEs” 10 the insurers have of MSMEs and the partners as the business environment published by the Microinsurance Net- MSMEs’ lack of insurance awareness changes. An example of changing work underpinned this session. and risk management. It would be eas- circumstances and heterogeneity is ier to solve the rest if these two chal- the decrease of 85 % in Africa’s tourism lenges were solved. sector due to Covid-19. Agriculture MSMEs’ business also decreased, but only by 20 %.

Microinsurance Network

Figure 18 Challenges to serve MSMEs with insurance

Inadequate Rapidly changing Lack of aware- Insurers’ lack of High Difficult to reach Regulatory risk management risk management ness of insurance knowledge about heterogeneity barriers strategies needs MSMEs

MSMEs are vulner- Risk perceptions, MSMEs often suffer Insurers have little It is challenging to Insurers must find Regulatory restric- able to personal and and thus risk from a lack of experience in cater- strike the right new ways of aggre- tions that can hold business-related management needs, knowledge on how ing to the needs of balance between gating MSMEs back insurers from risks but lack ade- can change rapidly insurance works and MSMEs standardised and tapping into the quate risk manage- e.g. when a hazard what risks they tailor-made products MSME market are ment strategies materialises that should seek insur- manifold e.g. was previously ance cover for restrictions on distri- disregarded bution channels or on bundling coverages

Source : Sahler, Gregor et al. “New products and solutions to increase insurance outreach. Developing insurance markets for SMEs.” International Conference on Inclusive Insurance — Digital Edition 2020. Report International Conference on Inclusive Insurance 2020 — Digital Edition 50

Session 13 Developing insurance markets for MSMEs

In Ghana, an analysis of insurance’s role The group of stakeholders identified Box 12 in the road and transport logistics value MSMEs — which, where and how New MSMEs product from Hollard chain brought out the need for a partner many — their main risks, how they were rather than a provider. In effect, insur- coping with them, their financial chal- Insured risks: ance was protecting the vehicle, goods, lenges and gaps in risk management, — Property assistance: warehouse and exports. But the risk and how insurance could fill in the gaps. covers the damage to structure and associated with the driver was not The result gave a good idea of the prod- stock caused by natural perils. included. Adding a cover for the driver uct needed by MSMEs. Furthermore, addressed a number of challenges. Hollard partnered with a mobile pro- — Loss of income (business interrup- vider, which considerably reduced the tion): Zambia’s regulation only The key is to adapt to new opportuni- distribution costs. The resulting product allows this type of payment in the ties. Cases in point are Hollard Zambia, is described in Box 12. event of physical damage. Covid an authorised insurance provider, and has shown that the loss does not BRAC Bangladesh — the largest MFI BRAC — Bangladesh always entail physical damage. in the world and perhaps the oldest, having started operations in 1972. BRAC, since its inception, has followed — Funeral assistance: covers the a holistic approach to poverty reduction. business owner plus spouse. Hollard Zambia The main lines of action are: elimination For cult ural reasons, there is some- of extreme poverty; creation of social times more than one spouse. Hollard used a four-tier approach to enterprises to link producers and con- develop products for the sector (see sumers across the value chain; social — Hospital cash: for hospitalisation Figure 19), with active participation of and financial development activities of the owner, daily payouts for regulators, distributors, clients, and (healthcare, education, microfinance, three days. institutions like Financial Sector Deep- etc.), and investments like BRAC Bank, ening Zambia. IPDC, BRAC Net, BRAC Guardian Life Premium: Insurance and BRAC IT Services, US$ 2.00 to 2.50 among others. Maximum payout: US$ 2,000.

Figure 19 Hollard’s four-tiered approach

Evaluation and Analysis Understanding the Customer — Assess customer feedback — C ustomer Segmentation from actual experience gained — P ersonal development — Adjust solution elements to eliminate barriers for uptake — Evaluate pricing, benefits and scalability

Concept Testing Solution Design — Pilot proposed solution with — Des ign Sprint session limited number of customers — P rototyping and concept testing — Test effectiveness of distribution with customers channel — Solut ion design based on — Test customer value proposition customer insights

Jeremy Gray Resilience Team Lead, The Centre for Financial Regulation Source: Sahler, Gregor et al. “Managing risks (more) effectively: Rethinking insurance for MSMEs.” and Inclusion (Cenfri), South Africa International Conference on Inclusive Insurance — Digital Edition 2020. Report International Conference on Inclusive Insurance 2020 — Digital Edition 51

This approach enables BRAC to assume Lessons learnt insurance for MSMEs holistically. It understands the financial needs of the — MSMEs are a vast untapped market — Insurers should invest in a detailed potential clients as well as the risks they that is heterogeneous with different design: market research, analysis face. It overcomes challenges by deeply financial realities; it requires innova- of financial challenges (client and knowing the clients. BRAC is the dis- tive solutions. insurer), potential market risks, etc. tributor of financial solutions, which It is a long-term investment. helps customers overcome the lack of — Trying to make a standard retail trust in insurance, which is one of the product affordable doesn’t work. — Financial literacy is a must. MSMEs major barriers to insurance growth and already manage some risks, in many penetration in Bangladesh. — Start by understanding the risks cases using informal risk transfer faced by a specific set of MSMEs, schemes. However, knowing the BRAC segments its clients into two bas- and then develop solutions to meet different opportunities and schemes kets: SMEs and micro lenders. The reg- those risks and build resilience. offered by specialised insurance ulation allows MFIs and NGOs to offer companies is very important. After credit life insurance without a partner, — The use of value chains and other all, financial literacy is what facili- but BRAC believes in partnership to aggregators facilitates access to tates such decision-making. introduce the right examples, insurance data, helps segment the market and knowledge transfer and sustainable eliminates part of the heterogeneity. — Take a leap and shift from provider project development. Being a distribu- to partners; offer a risk management tor, BRAC knows its clients well and can solution and not merely a product. walk the blurred line between personal risk and business risk.

BRAC is continuously analysing the implications, cost ratio, scope of Insurtech, client value proposition and development of new solutions.

Cenfri GIZ Hollard BRAC

Monirul Hoque Siani Malama Gregor Sahler Planning Manager, Microinsurance, Head of Business Development & Advisor, GIZ, Germany BRAC, Bangladesh Inclusive Insurance, Hollard, Zambia Report International Conference on Inclusive Insurance 2020 — Digital Edition 52

Session 14 Innovative distribution models — High touch vs. low touch: Is face to face really necessary?

By José Miguel Flores Contró

The session discussed the strengths and Box 13 Before, when traditional channels were weaknesses of high- and low-touch Opportunity in Mexico’s market used, getting insurance could take business models, and which is most suit- up to 15 days. Now, with Mango Life it able for distributing inclusive insurance. — Only 15 % of the working population takes 5 minutes. The company’s have life insurance. business-to-customer (B2C) model With the development of new technolo- includes performance marketing, gies during the last decade, low-touch — Just 7 % of people have private health inbound marketing, product landing business models have gained popularity insurance; 40 % of total health care pages, website content, quotation apps across different industries. Inclusive costs are borne directly by patients. and sales (see Figure 20). insurance clients are difficult to reach for various reasons (e.g. geographic and Mango Life’s approach The sales process itself includes traffic language barriers). Low-touch commu- sources, landing pages, quotation apps nication, where human interaction is — Flexible and simplified insurance. and checkout (see Figure 21). The com- minimised, helps reduce expenses and pany has found that most people (60 %) provide more affordable insurance — Least jargon possible. need human assistance to complete the products. purchasing process, while the rest — 100 % digital: no paperwork, appoint- (40 %) can use technology for the entire Lessons from a digital broker ments, signatures on documents process. As a result of Covid-19, Mango Life has recorded a 30 % growth in sales Mango Life is an insurance broker that of life and health insurance. started in Mexico in September 2018, when it sensed a great business opportunity in the market: life insurance had a penetration of 15 % and private health insurance just 7 %. Mango Life realised that one of the main reasons for the low penetration was that life and health insurance were too complex to understand and acquire. So it designed an approach with three main features to overcome the complexity (see Box 13).

Ashokh Shah Francisco Reyes Mauricio Osorio Sanchez Group CEO, Apollo Group/APA Insurance, Co-founder & CEO, Mango Life, Mexico President, Crezcamos, Colombia Kenya Report International Conference on Inclusive Insurance 2020 — Digital Edition 53

Figure 20 Mango Life’s B2C model

Paid traffic Performance Product landing Quotation apps Sale marketing pages

— Search — Social — Affiliates — Influencers

Organic & direct Inbound Website, blog, Own web apps to traffic marketing content quote and purchase:

— Search — Life — Resources — Health — Webinars — Videos — Downloadables

Source: Reyes, Francisco. Presentation “Mango Life: Human, Digital and Simple Life & Health Insurance — High touch vs. low touch.” International Conference on Inclusive Insurance — Digital Edition 2020.

Figure 21 Mango Life’s sales process

Traffic sources Landing pages Quotation apps Checkout Customer

— Unde rwriting (if applies) — Know-your-customer — Additional info (e.g. beneficiaries) — Payment

Marketing qualified Sales qualified leads Opportunities leads

Follow-up by sales executives via WhatsApp and outbound calls

Session 14 Innovative distribution models — High touch vs. low touch: Is face to face really necessary?

Box 14 Partners with feet on street Box 15 Mango Life Kenya Agriculture Insurance APA Apollo is one of the largest insur- Programme (KAIP) Number of people insured: ance companies in Kenya. It leads a 35,000 pool of six insurers working with the Number of people insured: government on Kenya’s agriculture and Cumulative 1 million smallholder Life insurance livestock insurance plans (see profile farmers since 2016 Insured risks: Box 15). Even more due to the pan- Insured risks: Basic death cover demic, customers in the inclusive insur- Area yield index insurance Sum insured: ance market continue to require tradi- Premium range: Flexible sum from US$ 5,000 tional touch points for marketing and KES 1,000 (US$ 9) per acre, 50 % up to US$ 16,000 communication (see Figure 22). But subsidised by government Premium range: technology is increasingly helping to From US$ 13 monthly control costs and enhance distribution. Kenya Livestock Insurance In combination with partners with feet Programme (KLIP) Health insurance on the street, mobile-based solutions Insured risks: such as USSD11 and SMS are helping to Number of people insured: Dread diseases, hospital cash, educate farmers in insurance and crop 20,000 households since inception permanent disability, telemedicine, management. Both the agriculture and Insured risks: dental livestock insurance schemes are using Drought-related livestock risks, Premium range: M-Pesa for premium collection and including forage From US$ 9 monthly claim payment. Premium range: KES 1,960 (US$ 18) per head of cattle, 50 % subsidised by government

Figure 22 Distribution: Has Covid-19 made any difference?

Despite Covid-19, MI and Agri still use very traditional touch points.

Insurance is invisible and the insurance sales person is a Trust stranger, but premium is tangible — How can the customer have trust in the system?

Cost of reaching the customer is Outreach way higher than the premium itself and developing agents in rural/ remote areas is difficult. Digiti- Understanding sation will be a great change.

Lack of customer understanding: Critical illness vs. critically ill, death vs. death due to accident, pest attack vs. uncontrollable pest 11 attack — leads to mis-selling or Unstructured Supplementary Service Data misunderstanding. (USSD), aka “Quick Codes” or “Feature codes”, is a communications protocol used by

Source: Shah, Ashok. Presentation “Innovation Distribution Models.” GSM phones to communicate with the International Conference on Inclusive Insurance — Digital Edition 2020. network operator’s computers. Report International Conference on Inclusive Insurance 2020 — Digital Edition 55

On the digital front, APA has developed From Crezcamos’ experience, people Lessons learnt a micro life product, which is distrib- need to have access to different chan- uted by USSD, mobile app and aggrega- nels. Insurance services require use of — There is not yet a formula that tors. It provides a modest sum insured both technology and human-driven defines the balance between human of US$ 1,000 for a low premium of channels to produce better outcomes. interaction and technology in the US$ 2, as well as a cash-back of 50 % Colombia has farmers with good knowl- inclusive insurance value chain. of annual premium or US$ 12. edge of and access to technology, but also those who lack this knowledge and — For customers without product Multi-channel access access. Having just one digitised chan- understanding, the traditional way nel would not be inclusive. of marketing is still relevant. The Crezcamos, growing out of a non-profit inclusive insurance industry needs microfinance programme and incorpo- An inclusive strategy to learn where technology best fits rated in 2008, targets micro and small into the value chain. entrepreneurs, serving 70,000 clients In conclusion, there was a reminder through 49 branches in remote rural from EA Consultants, host and facilita- — Trust is built on the payment of areas of north-eastern Colombia. tor of the session, that understanding claims. Trust is also inherent in a It works in four areas: agricultural pro- how low-income households cope with scheme backed by government. duction, development for enterprises, financial shocks and manage their habitat improvement and financial financial lives is the key to designing — Reaching scale without government emergencies. The organisation provides effective strategies, products and distri- support could be difficult. services that try to help people over- bution models. To increase insurance come some of the most common prob- outreach, a provider needs to take four — Lack of reliable data usually results lems: financing, protection, savings essential steps (see Figure 23). in high pricing of agricultural insur- and financial education. ance compared to other lines, which smallholder farmers cannot afford without government subsidies. Mango Life Crezcamos APA EA Consultants

Figure 23 Building a successful inclusive insurance strategy

Drive Offer Value Demand Reinforce Educate Customised Segmentation self-service & Simple, stan- and multi-cover renewals Freemium/ dard voluntary bundling mandatory products simple products Barbara Magnoni President, EA Consultants, USA Source: Magnoni, Barbara. Presentation “Innovative distribution models — High touch vs. low touch: Is face to face really necessary?” International Conference on Inclusive Insurance — Digital Edition 2020. Report International Conference on Inclusive Insurance 2020 — Digital Edition 56

Session 15 Analysing the client value of hospital cash products

By Kira Henshaw

This session presented initial findings Latin America: pandemic inclusion In Bolivia, the product is bundled with of a study by the ILO’s Impact Insurance a life cover and is available only in major Facility and MiN. With a client value The analysis from Latin America cov- cities and as a group policy, with a analysis of hospital cash products, the ered one product from each of Para- 10-member minimum. When a death study covers three work streams across guay, Peru and Bolivia. All three prod- benefit is claimed, the certification Latin America, Africa and Asia, present- ucts reacted to Covid-19, adapting required creates a risk of delayed paying the PACE analysis results of six programmes to provide pandemic cover ment. The product in Peru has a three- products. (The study does not name and shortening waiting periods (see day deductible. While this eliminates individual products, and refers to them Figure 25). While the focus in Paraguay many potential claims, the payout is at generally while noting their distin shifted from cancer diagnosis to Covid- the high end of the sum insured as guishing features.) 19, regulators in Peru pushed insurers to claims filed are for serious conditions. remove pandemic exclusions and PACE is a four-dimensional tool devel- approved inclusion of future pandemics. Existing value-added services include oped by the ILO as an added-value telemedicine, discounts, and nutritional analysis framework. The tool enables The products provide benefits up to a and psychological consultation. Cus- evaluation of an insurance scheme by maximum of cumulative hospital stays tomers would also like to have medicine exploring particulars of the product, per year. Benefit amounts are related to plans, annual check-ups and cover for access, cost and experience. It points to income level and cost of healthcare. their extended family. best practices for improving client value and allows providers to identify, consoli- The product in Paraguay is purely digi- date and prioritise changes in their pro- tal and accessible to anyone with inter- cedures, recognising potential trade- net or a mobile phone (80 % and 97 % offs between the four dimensions (see of the population respectively) — with Figure 24). 95 % of product interaction through mobile phones. Increased participation is observed immediately after the product’s television advertisements. Pur- chase certification is issued digitally to customers and claims filed online via WhatsApp or Facebook. If a policy- holder dies while hospitalised, the policy pays the maximum amount as a death benefit. One digital downside is the lack of physical agents, with only one accessible office.

Neto Ikpeme Erik Jarrin Peters Founder and CEO, Wellahealth, Nigeria Head Latin America — Life Division, Barents Re, USA Report International Conference on Inclusive Insurance 2020 — Digital Edition 57

Figure 24 PACE added-value analysis framework

1. Product The ILO’s PACE tool — Cov erage, service quality, exclusions, waiting periods — Sum insured to cost of risk — Helps organisations examine — Eligibility criteria their products from the clients’ — Value-added services perspective by comparing the insurance offering with other 4. Experience appropriate 2. Access formal and informal risk — Claims procedures — C hoice and enrollment management tools — Claims processing time — Information & under- & quality of service responsive simple accessible standing — Provides a framework to — P olicy administration — P remium payment method & tangibility — Proximity evaluate the value of products — Customer care affordable and related processes across four dimensions: Product, Access, Cost and Experience 3. Cost — Premium to benefit — Allows practitioners to identify, — Premium to client income consolidate, and then prioritise — Other fees & costs — Cost structure and controls potential changes

Source: Morgan, Lisa. Presentation “Analysing the client value of hospital cash products.” International Conference on Inclusive Insurance — Digital Edition 2020.

Figure 25 Latin America overview

Paraguay Bolivia Peru Benefit US$ 13 per night US$ 50 per night US$ 13 per night Price starting @ 1.25 1.66 0.63 Indemnity Min./Max. 60d Cap 15 days Min. 15/Max. 60d Deductible 1 1 3 Waiting period Covid - 21d Covid - 14d Covid - 14d Illness 90 Illness 90 Illness 90 Accident NIL Accident NIL Accident NIL Distribution Online Sponsors/agents Sponsors/agents Payment Instalment Instalment Instalment Covid-19 Included Included Included Other benefits Life cover Life cover none Telemedicine Discounts Sold Individually Group Individually Changes Focus Interest New pandemics

Source: Peters, Erik Jarrin. Presentation “Analysing the client value of hospital cash products.” International Conference on Inclusive Insurance — Digital Edition 2020. Report International Conference on Inclusive Insurance 2020 — Digital Edition 58

Session 15 Analysing the client value of hospital cash products

Africa: enabling digital payment The North Africa product specifically Asia workstream covers the needs of low-income women, For the Africa workstream, the session who often work in the informal sector The product from South-East Asia presented analysis of one product with little access to social security selected for the analysis (see Figure 26) in each of the north and west of the schemes. Policyholders receive daily offers only illness and accident cover. continent. Figure 26 outlines the two in payments per night of illness, including Customers choose between 6- or comparison with the one for Asia. maternity and childbirth-related admis- 12-month contracts with premiums paid sions. Initially offering only individual upfront — the organisation actively pro- The West Africa product has three cover, the plan now also offers family poses cover for a shorter period to all policy options. Offered by a mobile net- cover. As a mandatory product with all customers with insufficient funds in work operator through a mobile money new credit customers automatically their digital wallet. If policyholders are wallet, the basic plan is free. The “free- enrolled in the scheme, awareness hospitalised in an intensive care unit mium” option increases product acces- phone surveys are conducted regularly (ICU), the insurance benefit is twice the sibility and customer awareness, simpli- to ensure policyholders are aware of the limit. (The Peru product analysed as fying future rollouts by building trust. product and the cover it provides. part of the Latin America workstream Consumers making 5 transactions of also offers increased benefits following more than US$ 9 per month qualify Unlike the West Africa product, the ICU stays.) During the pandemic, a for the plan. The other options are paid North Africa scheme has no waiting new hospital cash product was devel- personal and family plans. All three period. Claim payment turnarounds are oped in South-East Asia specifically come with a life benefit. Premiums cor- as fast as 50 % on the spot and 80 % targeting Covid-19-related diagnoses, respond to around 1.5 % of minimum within 4 days. While premium pay- treatment and death. wage, though 60 % of people are infor- ments were initially branch-based with mal sector workers and 80 % are self- loan instalments, digital payments employed. were enabled during the pandemic.

Figure 26 Hospital cash products — Africa and Asia

West Africa North Africa South Asia Target market Low-income segment Low-income segment, Low-income segment with a focus on women Covers include Any health condition Any health condition Illness and injury Options Yes No Yes Waiting period 3 months None 15 days

Product Max. days of compensation 30 days 40 days None Minimum hospital stay 3 nights 1 night 1 night Value-added services Life insurance Life insurance Accident insurance, digital consultation, health cashback Bundling Stand-alone Bundled Stand-alone Enrolment process USSD, call centre At the branch USSD, In-app, outbound call centre No documentation required No documentation required and inbound call centre. No documentation required Client education mechanisms Ads, service centre agents By the loan officers Social media marketing, SMS blasts, Access Phone survey outbound call centre agents and quality officers Premium financing options Mobile banking Payments at the branch Customer digital wallet Daily benefit/annual premium 1.53 1.67 1 (general hospital)/ 2 (ICU)

Cost Payment method Instalments Instalments Upfront Claims filing Digital, on WhatsApp At the branch Digital, on WhatsApp or via email Documents required Discharge form and national ID Discharge form and national ID Discharge form and national ID Claims turnaround time 48 hours 50% of claims paid on the spot 5 days from intimation, 24 hours from documents submission Experience Policy documents/insurance card No No No

Source: Ikpeme, Neto and Triboulet, Anne-Sophie. Presentation “Analysing the client value of hospital cash products.” International Conference on Inclusive Insurance — Digital Edition 2020. Report International Conference on Inclusive Insurance 2020 — Digital Edition 59

PACE positives Lessons learnt

Adding value in the context of PACE, — Hospital cash should be thought of in this hospital cash analysis highlights the context of the wider health sys- positive characteristics of the schemes tem, integrated with a range of tools in each of the tool’s four dimensions: to manage health financing risks while complementing government — Product — consumer-centric health protection and social security bundling; product reactivity. schemes.

— Access — online products; digital — Customers should be involved in wallets; visible advertisements; product design to ensure products simple documentation. are aligned with demand.

— Cost — range of premium and bene- — In particular, customers would like fit options valuable to the consumer. more value-added services such as medicine plans, annual check-ups — Experience — digital claims submis- and cover for their extended family. sions; fast turnarounds; health information and advice sharing to — The market’s ability to adapt to a mitigate misinformation (Covid-19). sudden need — Covid-19 — highlights the digitisation benefits and consumer preferences for digital processes and research methods. ILO’s Impact Insurance Facility Microinsurance Network

Anne-Sophie Triboulet Lisa Morgan Microinsurance Project Manager, Technical Officer, ILO’s Impact Women’s World Banking, Uganda Insurance Facility, Switzerland Report International Conference on Inclusive Insurance 2020 — Digital Edition 60

“At this critical moment, inclusive insurance is playing a vital role in getting the Sustainable Development Goals back on track — particularly in terms of protecting lives and livelihoods.”

Achim Steiner — Administrator UNDP Report International Conference on Inclusive Insurance 2020 — Digital Edition 61

Agenda Day 5—6 November 2020 Lessons learnt and next steps

Session 16 Session 17 Session 18 Technology driving The ups and downs of Outlook: What will be the inclusive insurance inclusive insurance: next milestones in the Learning from experience development of inclusive Speakers insurance/closing the Speakers insurance gap? Brandon Mathews CEO, Stonestep, Peter Gross Speakers Switzerland Senior Advisor, AXA Emerging Consumers, USA Denis Duverne Rohan Kumar Chairman, Axa, France/ CEO and Co-founder, Agrotosh Mookerjee Chair of the Insurance Toffee Insurance, India Managing Director Development Forum, UK and Chief Actuary, Jeremy Leach Risk Shield, Zambia Vijaya B. Shah Founder & CEO, Inclusivity CEO, Nepal Insurance Solutions, South Africa Lorenzo Chan Company, Nepal/ CEO, Pioneer Life, President of the Association Facilitator The Philippines of Insurers and Reinsurers of Developing Countries Richard Leftley Facilitator (AIRDC) Executive Vice President International, Micro Michael McCord Doubell Chamberlain Insurance Company, UK Managing Director, Managing Director, Microinsurance Centre at Cenfri & Chairman of the Milliman, USA Microinsurance Network, South Africa

Jan Kellett Special Advisor: Finance Sector Hub, UNDP, Switzerland

Katharine Pulvermacher Executive Director, Microinsurance Network, Luxembourg

Facilitator

Dirk Reinhard Vice Chairman, Munich Re Foundation, Germany Report International Conference on Inclusive Insurance 2020 — Digital Edition 62

Session 16 Technology driving inclusive insurance

By José Miguel Flores Contró

The session focused on the impact of The change of focus is reflected in the Box 16 technology on the inclusive insurance choice of the four organisations repre- industry: how technology can help ex sented on the panel. One calls itself pand the safety net of insurance for the “the first global end-to-end digital Toffee unserved, with products not stymied microinsurance” company, formed from Insurance by complexity and with distribution that a merger of a microinsurance pioneer, a is user-friendly. founder of straight-through-processing (STP) technology, and a software devel- New technologies are driving an over- oper of robotic process automation, haul of the insurance industry: block- machine learning and AI. Also repre- — Provide specific insurance chain, IoT (internet of things), AI (artifi- sented on the panel are three insurtech policies for health, life, household cial intelligence), big data, augmented start-ups, one each based in Switzer- and more (e.g. international travel reality, etc. For inclusive insurance, land, South Africa and India. The start- insurance, mosquito insurance etc.) technology has been a gamechanger in ups provide exclusive digital platforms reaching scale. Additionally, to reduce leveraging automation for low-cost, — Offer digital policies by expenses and overcome challenges high-volume distribution of protection insurance providers such as low take-up and renewal rates, targeting the unserved people’s own inclusive insurance providers have priorities. — Headquarters in Gurugram India, been building partnerships with tech- operate in India nology companies such as mobile net- A good fit work operators (MNOs), insurtechs — Founded 2017 and fintechs. In India, Toffee Insurance offers “hand- picked insurance policies” that are “a New generation of partners good fit” and easy to get. Technology is becoming increasingly important in Toffee Insurance The focus of the partnerships has been people’s lives, which makes it easier to shifting of late — from scaling products track customer and purchase behav- on hand through existing systems to iours. Companies can now create, price custom-made digital platforms. These and distribute products that are more platforms offer products that directly suitable for the target clients. Toffee meet low-income people’s real needs Insurance, for example, partnered with and that are simple to understand and an outdoor gear brand to roll out insur- easy to acquire. ance for backpacks. And in the wake of Covid-19 it offered a sachet plan bundling health, household and life insurance via a subscription of bite-sized monthly payments.

Brandon Mathews Rohan Kumar CEO, Stonestep, Switzerland CEO and Co-founder, Toffee Insurance, India Report International Conference on Inclusive Insurance 2020 — Digital Edition 63

Technology can be used at any stage Box 17 Scaling trust of the inclusive insurance value chain, particularly at the point of sale to Technology could also be helpful in encourage people to sign up. Stonestep, scaling trust. Most of the people a Swiss-based insurtech, stresses the Stonestep (80 %—90 %) would prefer to buy insur- importance of offering the right product ance from an MNO rather than an insur- at the right moment, bundling covers ance company because they trust the in the right way and using common MNO’s brand more than an insurance technologies such as USSD and SMS. company. A big advantage of technol- The Stonestep platform offers insur- — Market and distribute income ogy is the brand that goes with it, so it ance to people when they are perform- and property insurance for first- is a great generator of trust. ing financial transactions, by inserting generation insurance customers its microsite into mobile wallets. In South Africa, Inclusivity Solutions — Created the digital platform designs, builds and operates digital “Microinsurance as a Service” insurance solutions that enable financial inclusion. It points out that, even — Headquarters in Zug Switzerland, though technology mostly brings good operate globally e.g. in Nepal, things to the inclusive insurance indus- Malaysia and the Philippines try, it also creates challenges to overcome. For example, just 20 % of people — Founded 2012 open insurance-related texts after receiving them on their mobile phones. SMS delivery rates also pose a challenge, and the language and time of day in which the texts are sent need to Stonestep be tested.

Jeremy Leach Richard Leftley Founder & CEO, Inclusivity Solutions, Executive Vice President International, South Africa Micro Insurance Company, UK Report International Conference on Inclusive Insurance 2020 — Digital Edition 64

Session 16 Technology driving inclusive insurance

Box 18 Various technological tools can be Lessons learnt used but each has its own challenges. Provide rs need to choose the tool — Customers, even in remote rural Inclusivity that will b est help them engage with communities, are mostly digitally Solutions the particular target clients. Market savvy, even more so as a result of the res earch by Toffee Insurance revealed pandemic. They expect on-line shop- that WhatsApp is a very important com- ping and service — for insurance too. munication channel for people in India. So it is using this application at differ- — Increasingly, insurers are looking — Create insurance solutions for ent stages of its value chain. Plus, it for partnerships with insurtechs health, life and property in uses WhatsApp videos for training staff. offering custom-made digital emerging markets platforms, instead of network opera- New frontier tors offering their existing systems. — Offer simple, affordable and digital insurances via mobile phones Artificial Intelligence (AI) has become — Technologies usually bring both a major source of innovation in business opportunities and challenges. — Headquarters in Cape Town South practices. In insurance, it can speed up Choosing the right one for a particu- Africa, operate globally e.g. in the time it takes to issue a policy or lar use makes the difference. Rwanda, Kenya and Ivory Coast settle a claim. Toffee Insurance uses automated chatbots within WhatsApp — Digitisation makes it easier to — Founded 2015 to communicate with clients, at various track customer and purchasing stages from policy issuance to discov- behaviours. ery of product and client insertion. Stonestep uses chatbots capable of — Technology cannot do everything performing natural language process- on its own. Inclusivity Solutions ing (NLP) tasks for claims processing.

The technology saves time, but gather- ing sufficient and accurate data to train AI models takes time.

Other channels becoming important are video calls and conferencing applications such as Zoom. They consist of reception and transmission of audio- video signals by users at different loca- tions enabling communication between them in real time. These tools have been particularly useful during the Covid-19 pandemic. Report International Conference on Inclusive Insurance 2020 — Digital Edition 65

Session 17 The ups and downs of inclusive insurance: Learning from experience

By Kira Henshaw

This session explored the evolution of Box 19 A “game format” to train users in the the inclusive insurance sector, highlight- Pioneer Group — 2019 basic functions helped overcome some ing challenges and learnings of initia- of these problems. However, before tives in the Philippines and across Africa. No. of enrolments: long, as agents were becoming com- approx 20 million fortable with the devices, the speed of The Philippines: Insured risks: updates in the technology began to Tech in touch — a balancing act Life, PA, health, hospital cash, outdate their so-called “phablets”. The calamity aid (flood, typhoon & system upgrades no longer supported While digitisation is taking place earthquake), fire, agriculture, the app, and poor connectivity remained throughout the inclusive insurance dengue fever an issue. In 2017, the project was re chain, human touch remains important. Premium range: launched, adding an offline function to Digitisation involves a balance between US$ 1 to 40. the app, followed by a Facebook Mes- improving the efficiency of insurance senger chatbot. The project then ena- mechanisms and maintaining physical bled photographic enrolment — but low contact with consumers to develop internet speed slowed transmission and trust. bad picture quality marred uploading.

With manual processing of increasing A grassroots agent platform called enrolments causing data encoding NAN.AI has since been pilot-tested and delays and inaccuracies, Pioneer Life rolled out to agents. In solving connec- launched an automated enrolment pro- tivity problems, offline functions for ject in 2015. Simplified apps with app-based mechanisms proved vital. reduced data entry, complemented by Two other learnings were: do not as optical character recognition (OCR) sume compatibility of a device with the technology, mitigated manual enrol- desired functions and factor in technol- ment challenges. However, connectivity ogy updates and system upgrades; and and agents’ digital know-how were remember that technology, essentially lacking. Many agents were unfamiliar an enabler, is a continuously evolving with simple aspects of smartphone process. technology, including the non-alphabet- ical arrangement of keys. Pioneer Life’s 82,905 app-based enrolments between November 2019 and October 2020 form a small portion of its 1.8 million total account enrolments.

Peter Gross Agrotosh Mookerjee Lorenzo Chan Senior Advisor, AXA Emerging Consumers, Managing Director and Chief Actuary, CEO, Pioneer Life, The Philippines USA Risk Shield, Zambia Report International Conference on Inclusive Insurance 2020 — Digital Edition 66

Session 17 The ups and downs of inclusive insurance: Learning from experience

10 years of mobile insurance Market growth creates challenges such Box 20 as regulation changes and the need to The driver’s seat Mobile insurance at scale dates back to balance market management with the 2010, when Tigo Ghana attracted more logistics of running a large business. While telecoms commit to working than a million customers and expanded And “digital-only” fails, creating initial with insurers to improve accessibility, to Tanzania and Senegal. By 2014, uptake and sustaining clients is diffi- their goals are often subject to two key providers, Bima and Micro- cult — agents are critical. unanticipated change. The emerging Ensure, had launched simple products consensus is: with attractive benefits in 15 countries Too many mouths to feed. Telecoms in partnership with telecoms. and insurers think differently — short- — Do not put the telecom in the term vs. long-term approaches. Insur- driver’s seat. Despite fast growth, by the end of 2018 ance hasn’t converted to the telecoms’ only 20 programmes had more than 1 way of business. Customer-centricity — Freemium is down, but not out. million subscribers each. Telecoms is challenging and insurers’ willingness It provides a powerful base from were losing interest. What happened? to put capital at risk is limited. Client which to sell paid insurance and value should be improved, too many lowers customer acquisition costs. Seduction of scale. Mobile insurance is products have low claim rates and while a small market — telecoms are the deci- airtime works, it involves high taxes. — Distribution works well via a call cen- sion makers. However, few make insur- tre with automated smart payments. ance a sustained business feature (see Big expenses, small revenues. Aver- Figure 27). age product duration is less than 24 — Focus on product value. months. However, payment persistence is a problem and regulatory inconsisten- cies create difficulties when working

across multiple markets. Source: Gross, Peter. “What we learned: 10 years of mobile insurance.” International Conference on Inclusive Insurance — Digital Edition 2020.

Figure 27 2016 Case Study: Airtel Zambia

A strong start… What killed the product?

Launched 2014, eight Initially launched due to weeks after initial pitch short-term competitive meeting with Focus and pressures MicroEnsure Immediate pressure on Automatic life cover for all Airtel Zambia freemium payments 4 million subscribers Frequent management Increased penetration from turnover challenged pivot 1 % to 16 % overnight Telecom lost appetite to Collapsed in 2016 after grow from free to paid less than 18 months live insurance

Michael McCord Managing Director, Microinsurance Centre at Milliman, Source: Gross, Peter. “What we learned: 10 years of mobile insurance.” USA International Conference on Inclusive Insurance — Digital Edition 2020. Report International Conference on Inclusive Insurance 2020 — Digital Edition 67

Looking back and ahead, there are both Implementation. The nature and fre- Lessons learnt lessons and opportunities. quency of risks covered by agricultural schemes make it difficult to set premi- — Focus on lower, slower and more What mobile insurance got right. ums at a level that smallholder farmers sustainable growth. Industry change Insurance is an exciting product for can afford. Some schemes require is rapid, and excitement today emerging customers and mobile can negotiating a margin for aggregators. doesn’t mean excitement tomorrow, change a market — penetration in For indemnity-based schemes, loss particularly in the context of tele- Ghana increased from 2 % to 30 % assessor skills are often lacking. Farm- communications. alongside the success of mobile insurers need to be educated in risk-based ance. Mobile forces SUAVE insurance pricing to improve consumer trust. — Product success is dependent on the more than many other channels. How- technology evolution and how con- ever, while digital can do some of the Supply and distribution. Stringent sumers evolve and interact with tech- work, all channels must be activated. data requirements and low levels of nology. Mobile insurance needs to be insurer/reinsurer innovation and risk- fast, simple and easy to understand. What will success look like in 2025? taking prevent acceptance of new types Telecoms will become more passive, of risks, e.g. reinsurance for a yield — Digital can do some of the work, with a sharp global growth in digital index and hybrid structures. Sometimes but all channels must be activated — payments and a heavier reliance on there is anti-selection, e.g. a 70 % heavier reliance on physical distri physical distribution. Customer acquisi- take-up in an expected drought season. bution with call centres and field tion costs will continue to be lowered Lack of attention to bundled product agents demonstrating the reality of by freemium products, but insurers details may cause conflict of interest the product in the market. cannot afford to be greedy and will be between farmers and aggregators, and forced to become more agile. Mobile it may not be clear whether a claim pay- — The industry needs to embrace is more important to brand than to GWP ment is for insurance, inputs or loans. and continue to embrace innovation (gift with purchase). Bundling can work, There is not enough focus on meso- across products, projects and value-added services, particularly health, level/portfolio agricultural insurance markets. will continue to grow in importance. even though aggregators are exposed to the same production risks. Stronger Challenges for agricultural alignment with business cases of microinsurance aggregators such as seed companies would prevent them from leaving a There are some 500 million smallholder scheme if sales do not increase. And farmers in the world, producing 70 % of farmers need a flexible premium pay- the food consumed. But only 20 %12 of ment option so they can avoid times them have a safety net for crop and live- when they are cash-strapped during the stock losses. Agricultural index insur- season. ance, despite ease of access and claim payment, has yet to take hold as com- Public sector involvement. Integration mercially viable without government or with agriculture finance, public-sector donor subsidies. Providers face some social security programmes, farming critical challenges: input programmes and disaster management is insufficient in many coun- Data and product. Aside from the tries — even national schemes expe inherent problem of basis risk, there is rience a lack of coordination between no overall scientific consensus on the ministries. Regulatory barriers limit highest quality and suitability of prod- product value, while analysis of the ucts, nor on the index parameters. scope of government support generally Standardised information on the accu- focuses on premium subsidies, disre- racy of satellite data sources and agri- garding potential roles for enabling culture data is also lacking. It is difficult data access, improving regulation and to access weather-station and yield engaging public-sector insurers. data as well as the GPS coordinates of reference points.

The International Fund for Agricultural Development (IFAD) Report International Conference on Inclusive Insurance 2020 — Digital Edition 68

Session 18 Outlook: What will be the next milestones in the development of inclusive insurance/ closing the insurance gap?

What are the key challenges that insur- Summary of the ICII 2020 ers will face in the near future? How can they show that insurance still works? Digital Edition How can they change the perception of insurance? What are the key issues, and Lessons learnt — Days 1/2 how can issues like climate change, — Demand for remittance-linked pandemic, inequality or the role of insur- — Covid-19 has caused a sharp insurance is growing. ance in economic development be decline in income — especially addressed? These are some of the ques- for the most vulnerable — Use the value chains. tions the closing session addressed. — The situation has created a sense of — Low-touch systems help overcome Facilitating the discussion, Munich Re urgency in the inclusive insurance cost challenges. “Some clients Foundation Vice Chairman Dirk Rein- market. It changed interaction from are ready to buy insurance com- hard recapped some of the stand-out personal to digital channels. Changes pletely online… But others aren’t” lessons from the conference’s five days. are expected to be here to stay Francisco Reyes These included: the impact of Covid-19 beyond the pandemic. on the incomes of those who are most — Digitisation has increased the vulnerable, making it even harder for — Covid-19 has created a greater role value of hospital cash products. them to afford insurance; the urgency for PPPs. Think big, start small and Value builds trust! for regulators to facilitate digitisation, scale fast. while balancing consumer protection; Lessons learnt — Day 5 the increasing need for public-private — Long-term planning is key to devel- partnerships (PPPs) to drive inclusive oping insurance: Parametric is — “Everything online needs an insurance; and the need for integrated still young and not perfect, pricing offline” mode. risk management solutions. He also is k ey. Risk awareness is a necessary reminded participants that, though investment. — Technology is still an enabler. It Covid-19 is a huge problem, climate cannot replace face-to-face fully, change shouldn’t be forgotten. — Certification allows for judging the interaction with someone you trust. quality of the product offered — Inclusive insurance drivers should Lessons learnt — Days 3/4 concentrate on lower, slower and more sustainable growth. — Integrated risk management solu- “Excitement today doesn’t mean tions — it’s not just about insurance! excitement tomorrow”

— Digital methods help to scale. However, it is important to actively involve the regulators.

— National strategies: Start with market research and study of regulatory barriers. Long-term involvement of all partners is key. Regulators have a dual role: super vising and enabling. Report International Conference on Inclusive Insurance 2020 — Digital Edition 69

Vijaya B. Shah, CEO of the Nepal Insur- Nepal, however, faces different chal- For inclusive insurance, he added, one ance Company and President of the lenges, including a lack of cost-efficient cannot simply take traditional insur- Association of Insurers and Reinsurers channels; limited use of technology, ance from mature markets and make in Developing Countries (AIRDC), which with inadequate data; poor levels it smaller. It needs to be much simpler, has 132 members from 31 countries, of awareness about insurance; and the with exclusions kept to a minimum. considered the outlook through the return of migrant workers during the Classical distribution through agents lenses of inclusive insurance market pandemic, which has badly hit eco- and brokers is often ill-adapted to development in the Philippines and nomic growth. Regulators need to syn- reaching rural areas. Digital and fintech Nepal. The Philippines, he said, is an chronise the definition of microinsur- distribution is necessary. We believe in exciting space — microinsurance premi- ance, revise the maximum allowed sum tech-powered human touch. Also es ums up by 12 percent in 2019, 45.13 assured, facilitate appropriate products sential are partnerships that go beyond million people covered, and an encour- based on low-income needs, and en financial incentives. These lessons, he aging expansion at meso level. courage pools to share both risks and said, have allowed AXA to grow from This is the result of benefits. one million to 18 million inclusive insurance clients, although there is still huge — a proportionate policy and AXA is one of the leading global insur- room to grow. “In the context of Covid- regulatory environment; ers in the inclusive insurance space. 19, the need is even greater — inclusive Chairman Denis Duverne, who also insurance will play a crucial role in help- — government champions who chairs the Insurance Development ing people who are in danger of falling lead and advocate reforms; Forum (IDF), said that citizens of back into poverty.” emerging countries are the ones suffer- — a strong microfinance sector; ing the most from the impact of the Jan Kellett, Special Advisor at the a multi-stakeholder approach to pandemic and climate change. “When UNDP’s Finance Sector Hub, shared market development which a catastrophe hits, 60—70 % of people details of the new Insurance and Risk provides rich opportunities for in developed countries are covered by Finance Facility, which will support capacity building; insurance. However, traditional in insurance product development and surance only reaches 5—10 % in poor deployment in 20 countries in the next — and an active government role countries like Haiti. The industry five years, scaling up to 50 countries in pr oject implementation and should aim at better coverage of insured by 2030. The Facility has five work donor coordination. losses with greater access to insurance streams, including one dedicated to products as protection. At AXA, we inclusive insurance. Although the Facil- have made financial inclusion a major ity was conceived well before the Covid- driver of our action, particularly by 19 crisis, it has adapted to the new creating a dedicated programme for context, and will focus particularly on emerging customers.” three impacts: on health, on SMEs, and on secondary impacts such as food security and financial stability. “Risk management and development need to be treated holistically, and Covid-19 has forced us to do that,” said Jan. “Insur- ance is not a panacea, but a significant tool for resilience and development more broadly.” The Facility also aims to encourage other UN agencies to get involved with the IDF13 and the Insu- Resilience Global Partnership.14

IDF Denis Duverne Vijaya B. Shah Chairman, Axa, France/Chair of the CEO, Nepal Insurance Company, Nepal/ 14 Insurance Development Forum, UK President of the Association of Insurers and Reinsurers of Developing Countries (AIRDC) InsuResilience Report International Conference on Inclusive Insurance 2020 — Digital Edition 70

Session 18 Outlook: What will be the next milestones in the development of inclusive insurance/closing the insurance gap?

Box 21 Doubell Chamberlain, Chair of the UNDP Insurance and Risk Facility Microinsurance Network (MiN), com- mented that the Covid-19 crisis hasn’t Insurance and Risk Finance Facility 1) Inclusive Insurance really created new insurance problems, brings together UNDP’s work across it has simply exposed old ones. It has risk finance, risk transfer, and the 2) Sovereign Risk Financing also created opportunities for innova- financing of resilience into a single tion in inclusive insurance, but it’s not strategy and set of tools, guidelines, and 3) Natural Capital as a Protective Asset yet clear if, in the end, the positives will sources of support for country offices outweigh the negatives. and programme countries. 4) Insurance and Investment Although there has been some recent Its overall vision is to use its engage- 5) Integrating Insurance and Risk optimism around market recovery, he ment with the insurance industry (pri- Financing into Development said, we can’t get away from the global vate, mutual and cooperative) to find, economic impact — demand will be develop and implement innovative, scal- To deliver on this vision, running restrained and insurance premiums will able solutions to help countries tackle through all of UNDP’s work at country slow down for some time to come. In the intertwined challenges of poverty, level is both the development and addition, government debt has in vulnerability and risk. deployment of specific insurance/risk creased hugely, which will put employ- transfer tools and products with part- ees and citizens under even more pres- UNDP’s current work in development ners, relevant to our partner countries sure. Insurance companies’ investment includes housing insurance in small and communities, with significant incomes will decline, making it even island developing nations, risk finance investment in long-term market trans- more important for them to innovate in central Asia, reef insurance in south- formation. new business models. The pandemic east Asia, and the world’s first SDG- has driven a leap in digitisation which focused reinsurance vehicle. Its first UNDP’s Insurance and Risk Finance has the potential to transform insur- major investment is a partnership with Facility is implemented within a strong ance, although most of the innovation the German Government and Insurance framework of partnership, with both isn’t coming from within insurers but Development Forum to deliver inclusive high and technical leadership central to from tech companies. Digital is not the insurance and sovereign risk finance UNDP’s work within the Insurance panacea, he said, “it doesn’t necessarily solutions to 20 countries by 2025. Development Forum, InsuResilience drive good outcomes. What is clear is Global Partnership and Ocean Risk that digitisation amplifies the ability of Five workstreams guide the work of and Resilience Action Alliance. insurance to drive business. It’s no UNDP’s Insurance and Risk Finance longer just for a rainy day — it is driving Facility, all of which are underpinned business models.” by investments in convening, leadership, governance, equality and empowerment, technology, and research and evidence.

Source: UNDP Finance Sector Hub

Doubell Chamberlain Managing Director, Cenfri & Chairman of the Microinsurance Network, South Africa Report International Conference on Inclusive Insurance 2020 — Digital Edition 71

Box 22 Wrapping up the conference, Executive Understand the urgency, and act: Director of the conference, Katharine Asked by the facilitator for their Pulvermacher, Executive Director of the Munich Re Foundation key insights into the next five years, Microinsurance Network, identified a AIRDC panellists noted: strong theme around the need for cus- AXA tomer centricity. Insurance, she said, UNDP — If we understand the urgency, we can could learn some lessons from the Cenfri act. Insurance will become far more FMCG (fast moving consumer goods) integrated with other services and sector, which understands its custom- business, not just a safeguard. ers and caters to their needs. In addition, there needs to a better under- — Insurance must look beyond climate standing of the digital divide if no one is change to its impact - not just at cli- to be left behind in the rush for technol- mate risk, but health and protection. ogy. And she called for a review of the measures to achieve the SDG targets, — PPPs will be essential. The look to ensure that the role of inclusive insur- ahead should go well beyond five ance in driving sustainable develop- years. Governments and regulators ment is fully and specifically recog- need to work with the private sector nised — “because if you don’t measure and civil society for the long haul. it, it doesn’t exist.” She also noted the relatively high percentage of women — The demand for medical and health speakers during the conference, though products will transform the insur- she said there was still room for ance industry. There will be no option improvement. “One of the barriers in but to go for a massive use of tech- inclusive insurance is acknowledging nology; there will be no products that that half your customers are women,” don’t rely on it. she said. “If you don’t include them, you won’t understand your own customers.”

Dirk Reinhard wrapped up the conference by inviting all participants to attend the International Conference on Inclusive Insurance 2021 which is scheduled to take place in Kingston, Jamaica from 26—28 October.

Jan Kellett Katharine Pulvermacher Dirk Reinhard Special Advisor: Finance Sector Hub, Executive Director, Microinsurance Network, Vice Chairman, Munich Re Foundation, UNDP, Switzerland Luxembourg Germany Report International Conference on Inclusive Insurance 2020 — Digital Edition 72

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MRC (MVO Risk Austria of Insurance & VisionFund MBM Consulting Seguros Ademi Consulting) UNIDO Private Pension International Microinsurance Seguros Crecer Susu Bahrain 2YC Network Seguros Pepin TNP Consultants Al Hilal Life APSA/ESA Munich Re Women’s World Atlantique Assurances Pontificia Universidad Banking Benin Javeriana ESA/EPSA PSK SAS GIZ/GBE SALIX Saham Assurance Vie Seguros de Vida Aurora Benin Serviefectivo Sunu Assurance Skandia Colombia University of Abomey Calavi Report International Conference on Inclusive Insurance 2020 — Digital Edition 73

Gabon GN Reinsurance Hong Kong Royal Sundaram Ireland International Fund CIMA Goldlink Insurance AXA General Insurance AID:Tech for Agricultural Kulima consulting Brokers Generali Co Ltd EJK Actuarial Development Georgia Hollard Life Assurance Jiang Research SBI General Consulting Ltd Jubilee Health Emphasibs Ghana Ltd Manulife Insurance Co Ltd UnitedHealthcare Insurance Co Milliman Imperial General India SEWA Israel Jubilee Life Co Ltd Germany Assurance Co Ltd ABIBL Smart hedge AgriTask Kapri Insurance A2ii InsuResilience Actuary Swiss Re OKO Agency Ltd Aiza Consulting Secretariat/GIZ Arthgram Agri Tata AIG General Italy KCB Insurance Agency Allianz iRisk Management and Business Insurance Co Ltd IBC Srl Liberty Bank AOK KEK Insurance Services Pvt Ltd Tata Trusts IFAD Madison General ConsumerCentrix Brokers Ltd Asia Insurance Review TCS Ltd Neosurance Insurance Kenya DEG Lordship Insurance AXA The DHAN Academy University of Genoa Malmitch insurance Dezes Public Relations Brokers and Bharti Axa Toffee Insurance WeChangeInsurance agency Fonds de Solidarité Consultancy Ltd C2L BIZ Solutions Track Four Infotec World Food Programme Metropolitan Cannon Africain (FSA) Loyalty Insurance Private Ltd Pvt Ltd Jamaica General Ins Ltd Frankfurt School Metropolitan Life Care Health UNDP Cuna Caribbean Minet kenya insurance of Finance & Insurance Ghana Ltd Insurance Co Ltd Universal Sompo Insurance brokers Management miLife Insurance Centcart Insurance General Insurance Development Occidental Insurance FSD Co Ltd Broking Service Co Ltd Options Ltd Co Ltd GAF AG National disaster Pvt Ltd Viridis RS GK General One World German Association management Cholamandalam MS Visista Insurance Insurance Co Development of Actuaries (DAV) organization General Insurance Broking Services Guardian General Foundation GIZ National Insurance Christ Deemed to P Ltd Insurance Association Pacis Insurance Co Hannover Re Commission be University Weather Risk of Jamaica PharmaAccess HDI Global Phoenix Life Assurance Cognizant Management JN LIfe Insurance Private Co Ltd InsuResilience Provident Insurance DHAN Foundation Services Pvt. Ltd Ministry of Health & Pula Advisors Solutions Fund Co Ltd Dvara KGFS Private Ltd Indonesia Wellness Rainmaker consultant ISS ESG Prudential Life Dvara Research Allianz Life Indonesia Office of Disaster RCMRD KfW Development Insurance Ghana Ltd Edelweiss AXA Preparedness & Resolution Insurance Bank Ghana Ford Foundation Bina Nusantara Emergency RIL MCII RegencyNem Insurance HDFC Ergo University Management Saham Assuarance Mosabi Ringfence Insurance Higher Education Central Asia University of the Co Ltd mTOMADY Brokers IBM Insurance, PT West Indies Syngenta Foundation Munich Climate Risk Management & IIPMB Equity Life indonesia Japan for Sustainable Insurance Initiative Advisory Services Ltd ILO Generali Indonesia KMC Agriculture (MCII) Safety Insurance INAFI India Independen.id Marsh & McLennan Syngeta Foundation Munich Re Brokers Ltd India First Life Indonesia Financial Companies Turaco Munich Re Foundation Saham Life Insurance Insurance Co Services Authority SOMPO Risk UAP Insurance Co Ltd Potsdam Institute Ghana India Post International Finance Management UNDP for Climate Impact Sealand Brokers Payments Bank Corporation Tokio Marine World Food Programme Research Serene Insurance Insurance Foundation KDI School Jordan Kyrgyzstan Sparkassenstiftung Co Ltd of India Nusantara Re Central Bank of Jordan Trisigma Analytica LLC für internationale SIC Insurance Co Ltd IRDAI PT Asuransi Middle East Insurance Lebanon Kooperation e.V. SIC Life Co Ltd IRRI Central Asia Co ALIG UNICEF Star Microinsurance IWMI PT Asuransi Tugu Kenya Arope Insurance University of StarLife Assurance J B Boda Insurance Pratama Indonesia Aar Barents Re Erlangen-Nürnberg Co Ltd and Reinsurance Tbk AB Consultants Lesotho (FAU) Greece Brokers Pvt Ltd PT Bhinneka Life African Merchant Hollard Lesotho UNU-EHS Munich Re KM Dastur Reinsurance Indonesia Assurance Co Ltd Lesoto National USAA Saham Life Insurance Brokers Pvt Ltd PT Reasuransi Agent for Inclusive General Insurance Zosgornik Ghana Liberty General Nusantara Makmur Insurance Co Ltd Ghana University of Western Insurance PT Sienco Aktuarindo Development Zenith Horizon Allianz Macedonia Magma HDI General Utama Actuaries and AIfluence Inc. Insurance Co Allstar Insurance Grenada Insurance Co Ltd Consultants AKI Liberia Brokers Government Manomay Consultancy PT. Asuransi Jiwa Anvil Shield Holdings Central Bank of Liberia Asterix Brokers Guardian General Services P. Ltd Generali Indonesia APA Insurance SellPay Liberia Bedrock Insurance Co Insurance MFIN PT. Asuransi Wahana Apollo Group/APA Luxembourg Beulah Insurance Guatemala MicroEnsure Tata Insurance Ltd ADA Brokers Aseguradora del Micronsure PT. Bhinneka Life Association of Kenya Barents Dezag Insurance Istmo (Adisa) Consultancy Indonesia Insurers BAT Brokers Ltd Aseguradora Rural Milliman Sienco Actuarindo Bluewave IBISA SáRL Edward Mensah, Wood Quanita S.A. M-INSURE UtamaRoyal p Britam Luxembourg Ministry &Associates Ltd Haiti MSC (MicroSave The World Bank Centripay of Foreign and Enterprise Insurance Civil Protection Consulting) Universitas Gadjah CIAT European Affairs GG&B Partners FADA Haiti Munich Re Mada CIC GROUP Microinsurance Brokerage Ltd Fondation Amour de National insurance Women’s World CoverApp Network Ghana Insurers Dieu en Action Vimo-SEWA Co Op Banking Directline Assurance PG Association Honduras National Rural Iran Co Ltd Schweizer PM Ghana Life Insurance CAHDA Livelihood Mission ECO College of Eastern Africa Data Vainker & Associates GIZ Davivienda Seguros Opportunity Insurance Solutions Ltd Madagascar GLICO Life Honduras Microinsurance eBiashara Africa Ltd mTOMADY Insurance Co Ficohsa Development Centre FSD Africa NY HAVANA Global Financial Pan-American Life People education & IITA Insurance Co Inclusion Institute Insurance Co development Insurance Regulatory GN Life Assurance Organisation Authority Co Ltd Periyar University Report International Conference on Inclusive Insurance 2020 — Digital Edition 74

Malawi Seguros Atlas Nepal North Macedonia The Philippines Portugal Microinsurance Seguros Azteca Beema Samiti Croatia Life/North 1Cooperative Insurance University of Coimbra Services Ltd Seguros BBVA Insurance Regulator Macedonia System of the Puerto Rico NICO General Seguros BX+ of Nepal Euroins Insurance Philippines Climas Reserve Bank of Malawi Seguros Monterrey Jyoti Life Insurance Eurolink Osiguruvanje Alalay sa Kaunlaran OCS-PR World Food Programme New York Life Co Ltd AD Skopje Group of Companies, Romania Malaysia Seguros SURA Nepal Insurance Grawe Osigurvanje Inc. Allianz Romania Actuarial Partners Seguros Ve por Más Nepal Krishi (Agri) Care AD Skopje Asian Actuaries Inc. UNSAR Consulting SHF-SCV NLG Insurance Co Ltd HALK Insurance Asian Actuaries, Inc. Rwanda AIA Malaysia SMNYL Pokhara University AD Skopje Asian Development Access to Finance Allianz Malaysia Swiss Re Source code Private Ltd Insurance Supervision Bank Rwanda Axa General Insurance Tokio Marine Mexico Netherlands Agency Aski Falcon Insurance Berhad Zurich Aon Macedonian actuarial Ateneo de Manila Services Bank Negara Malaysia Mongolia Bopinc society University Fana Adviso BNM Financial Regulation Brady Advisory Osiguruvanje AXA FinProbity Solutions Hannover Re Commission of Services Makedonija VIG BPI Direct BanKo Inclusivity Solutions MCIS Insurance Mongolia eLEAF Osigutelna Polisa BPIMS Insurance KM Dastur Berhad Insurance association Keylane SAVA Insurance Corporation Radiant Insurance Co University Sultan of Mongolia KIT Triglav Insurance Card Pioneer Radiant Yacu Zainal Abidi MetLife Milliman UNDP Microinsurance Inc Sparkassenstiftung Malta Mongolian Re JSC Oikocredit Uniqa a.d Skopje Cebuana Lhuillier fuer internationale Etherisc.com Ulaanbaatar City International University St Kliment Insurance Brokers Kooperation e.V. Mauritius Insurance LLC Palladium Ohridski CIAT University of Global HCS Mauritius Montenegro PharmAccess Winner — Vienna Country Bankers Life Health Equity, MUA Group GRAWE VanderSat Insurance Group, Insurance Corp. Rwanda SWAN General Morocco Wageningen University Skopje Department of Finance Saint Lucia Insurance ACAPS ZZP Norway Generali Life Assurance Department of Finance Mexico BearingPoint New Zealand AcServ, Norway Philippines Inc. Saudi Arabia A.N.A. Compañía de Ministry of Economy Asia Affinity Pakistan GIZ Wataniya Insurance Seguros S.A de C.V. and Finance InsuredHQ Asia Insurance ICRAF/CIM Senegal Agroasemex MOF Morocco Nicaragua Co Ltd Impact Advisory GIZ Allianz Moroccan Federation SERINSA Dubai Islamic Bank Services IFAGE Amis of Insurance Servicios Pakistan Insurance Commission Inclusive Guarantee ANA Seguros and Reinsurance Inclusivos S.A EFU Life Assurance Isynergies Inc Willis Towers Watson Asociación Mexicana Companies Nigeria Jubilee Life Insurance Kasagana-ka Mutual WSBI de Instituciones Morocco House Afenoid Co Ltd Benefit Association, YoungAfricanLeaders de Seguros Association AFOS Foundation MicroEnsure Inc. Sénégal Atradius Seguros de Saham Assistance Africa Bancassurance Securites & Exchange LSERV Corporation Serbia Crédito, S.A. Mozambique Academy Ltd Commission of Maranding Women AMS Osiguranje AXA BancABC AjoCard Pakistan Investors Hoken Consulting BBVA Insurance Diamond Companhia APMIS Health Panama Multipurpose OTP Insurance Mexico de Seguros Management ASSA Cooperative Sava non-life Insurance Berkley Fidelidade Systems Ltd Palig Microinsurance MBA Belgrade Capacitación FSD Mozambique College of Insurance Vivir Compañía de Association of the Triglav Ins. Co Belgrade Asesoría y Protección Hollard Seguros and Financial Seguros Philippines Inc University of Niš Asegurada Moçambique Management Paraguay MiMAP (RIMANSI) Sierra Leone Chubb MovelCare Cornerstone Crédito Agrícola de NATCCO MBAI Ministry of Health Crabi Tele-Insurance Insurance Plc Habilitación OLPMC and Sanitation Dentegra Seguros NBC GIZ Peru Oro Integrated Singapore Dentales Safeline Companhia De IFC APESEG Cooperative Allianz EKA Micro Seguros S.A Insurecentric BISAC Paglaum Mutual Axis Re El Aguila, Compañia de Sanlam Mozambique Insuremi BlueOrchard Finance Benefit Association CompareAsiaGroup Seguros, S.A. de C.V. Seguradora InsurTech Business Caja Arequipa Philippine Association DLI Asia Pacific General de Seguros Internacional de Series Cosas de Seguros of Agriculturists EY Grupo Peña Verde Moçambique LASU Crecer Seguros Philippine News First Degree Global HDI Seguros Tranquilidade Mz Manobi Africa Edificio Agency Asset Management Hir Seguros World Food Programme National Insurance Independiente Pioneer Insurance J B Boda HSBC Myanmar Commission Interseguro Retail Organization — Milliman IMESFAC Dai-ichi Life NEM Insurance PLC Kennedys Peru Pioneer Insurance Munich Re Inbursa Hana Microfinance Ltd Oluyole Local La Positiva Seguros RIMANSI National University insignia life S.A. de C.V. Hotel government Mapfre Perú RuralNet of Singapore Luxelare KBZ MS General PaddyCover Insuretech Pacífico Seguros Poland Tokio Marine Asia Mango Life Insurance PharmAccess Pontificia Universidad Institute for Women’s World MAPFRE Stonestep Foundation Católica del Perú Agricultural and Banking MediAccess Syngenta Foundation Prestige Technology Protecta Security Food Economics — Slovenia MetLife for Sustainable Royal Exchange Rímac Seguros National Research AZN Munich Re Agriculture General Insurance SBS Institute Insurance Supervision Odontontored, Seguros Namibia Co Ltd Seguroparatodos Agency Dentales, S.A. de C.V. Hollard Namibia The Academy of Superintendencia de Solomon Islands Palig Mexico Namibia Financial Microfinance & Banca Seguros y Central Bank of Plan Seguro Institutions Entrepreneurship AFP — Perú Solomon Islands PROAGRO Supervisory Development Vida Cámara Seguros Prudential Insurance Authority Wellahealth Mexico NatProx Etulive ZI PRYBE Protecciones Assurance Ltd y Beneficios SAPV Report International Conference on Inclusive Insurance 2020 — Digital Edition 75

South Africa Sweden Thailand Inspowering Ackermans Outsized GIZ Insurance Development aYo Switzerland Krungthai-AXA Life Forum Bridford Financial A2ii Insurance PCL Jpad Ltd Services Allianz Switzerland Trinidad Liberty Specialty Cenfri BlueOrchard Finance Guardian General Markets Financial Sector CelsiusPro Insurance Ltd MarkelInternational Conduct Authority Climate Re Trinidad and Tobago Mastercard Founders Factory ConsumerCentriX CCRIF SPC Scholar Mercer GuardRisk DI — Invest Holding Ernst & Young Services Micro Insurance Co Hollard GmbH Ltd Microinsurance i3 Actuaries and ILO Guardian General Research Centre UK Consultants MF Strategy Insurance Ltd Millestone Financial IFC ParaLife RS Chem Technology Engagement Ltd Inclusivity Solutions PartnerRe Tunisia M-Pesa Africa Inqaku SCBF NEWCO Newcastle University Kaleb Capital SCOR Turkey NFU Mutual Leapfrog Investments SDC Hacettepe University Ninety Legal Expenses Stonestep AG Koç University Oasis Loss Modelling Insurance Southern StS Piri Reis University Framework Africa Ltd Swiss Re Foundation Prefus Consulting ODI LegalWise SA (Pty) Ltd Swiss Reinsurance Turkmenistan Phoenix Group LEZA Syngenta Foundation Guardian Group Precise Protect LifeWise UNDP Turks and Caicos Queen Mary University MobiLife Financial University of Lausanne Islands of London Services Women’s World Ministry of Finance SecureValue Ltd Munich Re Banking Uganda Silverlining New Breed Consulting Zurich Agricultural Initiative Start Network NMS Insurance Tanzania Business Finance Services (SA) Ltd AAR Insurance Agro Consortium PEP Tanzania Bodastage Solutions RCS Cards (Pty) Ltd Alliance Insurance Ltd RGA Corporation Ltd Cam Quality Rocket Insurtech Association of Tanzania CFIRM Africa Ltd (Pty) Ltd Insurers Ensure Uganda Sanlam Bumaco Life Insurance Finance Trust Bank Santam Co Ltd Financial Sector Scorpion CEVEDE Deepening Uganda Sensible Risk Solutions Financial Sector Lincon Technical Simply Financial Deepening Trust Services Services GA Insurance Save for health Uganda The Digital Insurer Hia Insurance Agency Victoria Agro Traficc Insurance Group World Food Programme True South Actuaries & of Tanzania United Arab Emirates Consultants Insurance Institute Al Ittihad Al Watani Unisure Group of Tanzania AXA Green Crescent University of Cape LF Insurance BCG Town Brokers Ltd Daman USAID Metropolitan Tanzania Democrance Workerslife Insurance Co Ltd MedNet South Korea Metropolitan Tanzania MRUA — Dubai d.lemon Inc. Insurance Co Ltd Munich Re Micro Health Initiative National Health KDI School of Public Mwando Insurance Insurance — Daman Policy and Consultancy Ltd Noor Takaful Management Pan oceanic insurance Orient Insurance PJSC SKKU brokers Ltd rakco Spain Pharmaccess saltbox AIG Salute insurance United Kingdom AXA Sanlam General AID:Tech DFI Insurance Tanzania Airbus Sri Lanka Score Insurance ALO Consulting Agriculture and Brokers Ltd Services Ltd agrarian Strategis Insurance Co Aon insurance board The Savings Banks AXA Ceylinco General Foundation for Bank of England Insurance Ltd International BIMA FarmAgg Sri Lanka Cooperation Cambridge Centre for Institute of policy UAP Insurance Alternative Finance studies of Tanzania Ltd EQ Sri Lanka Victoria Insurance Ergo Sabaragamuwa Brokers Ltd Esse University University if Everest Re Sri Lanka Funnelweb Media Ltd Sanasa Insurance GCU — London Co Ltd GSMA Slycan Trust ICMIF Report International Conference on Inclusive Insurance 2020 — Digital Edition 76

Acronyms

ACAPS DSSP MBA SaaS L’Autorité de Contrôle Dvara Sampoorma Mutual benefits Software-as-a-Service des Assurances et de Sampath Plan association SBS la Prévoyance Sociale FMCG MCF La Superintendencia (The Supervisory Fast moving Medical Credit Fund de Banca, Seguros y Authority of Insurance consumer goods MCII AFP (Superintendency and Social Welfare) FSDA Munich Climate of Banks and ADB Financial Sector Insurance Initiative Insurance), Peru Asian Development Deepening Authority, MFI SDGs Bank Zambia Microfinance Sustainable AI FSP institution development goals Artificial intelligence Financial services MiCRO SIP AIRDC provider Microinsurance Systematic The Association of GCC Catastrophe Risk investment plan Insurers and Reinsurers Gulf Cooperation Organisation SMART in Developing Council MiN Specific, measurable, Countries GDP The Microinsurance achievable, realistic ARC Gross domestic Network and time-bound African Risk Capacity product MNO SMS B2C GIZ Mobile network Short message service Business-to-customer Deutsche Gesellschaft operator STP distribution für Internationale MSEs Straight-through BMZ Zusammenarbeit Micro and small processing Bundesministerium German Society for enterprises SUAVE für wirtschaftliche International MSMEs Simple, understood, Zusammenarbeit Cooperation Micro, Small and accessible, valuable, und Entwicklung) GPS Medium Enterprises and efficient The Federal Ministry The Global Positioning NFIF UAIS for Economic System National Financial Uganda Agriculture Cooperation and GSMA Inclusion Framework, Insurance Scheme Development, The global association Tanzania UNDP Germany of mobile network NFIP The United Nations BRAC operators National Flood Development The Bangladesh IAIS Insurance Program, Programme Rural Advancement International USA USD Committee Association of NLP United States dollar CCRIF SPC Insurance Supervisors Natural language USSD The Caribbean IBLI processing Unstructured Catastrophe Risk Index-based livestock OCR Supplementary Insurance Facility insurance Optical character Service Data Segregated Portfolio ICU recognition Company Intensive care unit OIC CEAR IDF Oro Integrated Center for the Insurance Development Cooperative Economic Analysis of Forum PACE Risk at Georgia State ILO (Analysis of) Product, University, USA International Labour Access, Cost and COAST Organisation Experience The Caribbean Oceans IoT PMFBY and Aquaculture Internet of Things Pradhan Mantri Fasal Sustainability Facility IT Bima Yojana, crop COVID-19 Information technology insurance scheme, Corona virus KAIP India disease-2019CRAIC Kenya Agricultural PPP The Climate Risk Insurance Program Public-private Adaptation and KES partnership Insurance in the Kenyan shilling QUIIC Caribbean KGFS Quality Index CRAIC Kshetriya Gramin Insurance Certification Climate Risk Financial Services RCMRD Adaptation and KLIP Regional Centre for Insurance in Kenya Livestock Mapping of Resources the Caribbean Insurance Program for Development CRI LMICs RLIP Climate risk insurance Low- and Middle- Remittance-linked CSC Income Countries insurance product Customer LPP RM or MYR service centre Livelihood Malaysian ringgit CSR protection policy RSPs Corporate social Remittance responsibility service providers Report International Conference on Inclusive Insurance 2020 — Digital Edition 77

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