Microinsurance Policy Perspective, Trends and key issues Presentation to SECP and Insurance Sector Seminar 29 November 2011

Policy Perspective

Microfinance (Credit, Deposit, Insurance and Remittances) Transitory Vulnerable Transitory Poor Chronic Poor Extremely Poor Non-Poor Transitory Non-Poor From a pyramid

To a Diamond HNWI Poor Middle Class

What to do is, by and large known and simple HEALTH CARE EDUCATION MICRO FINANCE HOUSING BASIC SERVICES Access To Poverty SIGNIFICANT REDUCTION Responding to poverty: The arsenal

*Source: : Relationship between Financial Exclusion and poverty exists…

There is a moderate to strong relationship between GDP per capita and usage of financial services

Bank Loan per 1,000 adults

Deposit Accounts per 1,000 Individuals

Bank Branches per 1,000 Adults

Bangladesh 2.5 India 19.7 Thailand 92.1 USA 3,790.2 Brazil UK 4,484.4 Pakistan 4.0 Indonesia 15.8 Kenya 11.1 Sri Lanka 14.2 Malaysia 25.7 Argentina Insurance density in USD$ Insurance Density: Gross Premium per capita

Industry Trends

Trends in credit, Deposits and insurance

Trends in Insurance

Issues/Challenges

MFPs & Insurance Co.  Awareness & Low literacy  High Premium  High Transportation Cost (Rural)  Product viability  Culture (Low demand for voluntary insurance  distrust  Diseases high  Consumer protection Client  Transparency  Cashless vs. cash based  Settlement of claims (time required)  Competition (product pricing)  Volumes required (low cost)  Existing products not meet the need  Product diversification  Marketing difficult then Credit/Savings  Push Vs. Pull  Late reimbursement of claims Regulation  Lack of understanding of microinsurance  Lack of appropriate information  Legal framework not supportive  MFPs agents or brokers  Product diversification Issues/Challenges

Role of PMN Advocacy for a separate regulation for MFPs Awareness Raising Campaign Promote consumer protection Provide up- to-date information to stakeholders

20 THANK YOU…….