1. Saving and improving lives in the world’s toughest places. How to Develop and Market Disaster Microinsurance Products Lesson Learned from Indonesia Liquidity Facility After Disaster (ILFAD) Program Presented by: M Alfi Syahrin ILFAD Program Manager Mercy Corps Indonesia msyahrin@id.mercycorps.org A presentation for: Third UN World Conference on Disaster Risk Reduction (WCDRR) Sendai, 13-15 March 2015

2. Saving and improving lives in the world’s toughest places. DISASTER MICROINSURANCE? »The USAID-funded ILFAD (Mercy Corps) program is currently partnering with insurance companies to mitigate the impact of disaster on communities and businesses through risk insurance distributed by Microfinance Institutions (MFIs). »To date, ILFAD, in partnership with ACA Insurance, is the first microinsurance product providing earthquake and fire coverage to MFIs clients. How to Develop and Market Disaster Microinsurance Products

3. Saving and improving lives in the world’s toughest places. ILFAD INSURANCE MODEL How to Develop and Market Disaster Microinsurance Products Indemnity / Index-based Reinsurance INSURANCE COMPANY REINSURANCE COMPANY MFI Clients Microinsurance: Clients compensated for disaster loss Strengthening DRR capacity of MFIs

4. Saving and improving lives in the world’s toughest places. DRR PRODUCT PACKAGE IN MFI How to Develop and Market Disaster Microinsurance Products DRR Savings DRR Micro- insurance DRR Product Bundled

5. Saving and improving lives in the world’s toughest places. PRODUCT FEATURES DRR Savings ProductDRR Microinsurance Product  In case of earthquakes, clients can withdraw their savings, leaving a minimum balance of 10,000 IDR.  In case of no disasters within a one-year period, cash can be withdrawn up to the minimum balance or clients can keep their account savings for another year.  For the clients who wish to close their account, cash withdrawal is allowed up to the minimum balance, within a one- month time limit.  Once registered, clients is automatically covered by disaster microinsurance.  Covers damages (fire and earthquake) to home and business  Premium: Rp. 20K per year  Coverage: Fixed Rp. 2M payout  Payout triggered for any damage regardless of intensity  Each case is assessed individually How to Develop and Market Disaster Microinsurance Products

6. Saving and improving lives in the world’s toughest places. A SIGNIFICANT OPPORTUNITY How to Develop and Market Disaster Microinsurance Products ProvinceMFIs# of MFI Clients Population TotalLow Income 1Aceh17 50,6794,494,410 881,260 2North Sumatra2 6,10112,982,204 1,286,670 3West Sumatra21 188,1414,846,909 379,200 4DKI Jakarta12 56,1199,607,787 393,980 5West Java17 63,73643,053,732 4,327,070 6Central Java18 88,57832,382,657 4,836,450 7DI Yogyakarta24 232,7143,457,491 544,870 8East Java16 5,98337,476,757 4,786,790 9West Nusa Tenggara10 11,0294,500,212 820,820 10East Nusa Tenggara28 121,8834,683,827 994,680 11Maluku25 71,3611,533,506 316,110 Total190 941,324159,019,492 19,567,900 Potential marketAddressable market today »164 MFIs from disaster-prone areas approved to enroll in ILFAD. MFI sales to non-clients will increase addressable market significantly.

7. Saving and improving lives in the world’s toughest places. THE PROCESS July 2011: Start of ILFAD Mar 2013: ACA signed up as partner Today: 1,322 clients on earthquake/ fire indemnity product Jan 2015: ACA and MC start 2 year program to drive adoption, expand coverage to tsunami, volcanic eruption and flood Nov 2014: Gov’t officially launched micro- insurance product prototype 1 Licensing of MFI Loan Officers as Insurance Agents Potential for Portfolio level disaster insurance for ILFAD and MFIs How to Develop and Market Disaster Microinsurance Products ! Significant Event Today 1 http://www.ojk.go.id/en/press-release-ojk-arranges-micro-insurance-market

8. Saving and improving lives in the world’s toughest places. PARTNERSHIP ROLES ILFAD Micro- Insurance Mercy Corps Re- insurance Local Carrier Product development Drive product sales Process claims Re-insure portfolio Facilitate market creation Implement ILFAD Phase 3 – drive adoption Provide re-insurance to local carriers Provide technical expertise on local product development Guide development of national ILFAD scheme ? How to Develop and Market Disaster Microinsurance Products

9. Saving and improving lives in the world’s toughest places. M Alfi Syahrin Mercy Corps Indonesia ILFAD Program Manager msyahrin@id.mercycorps.org +628119206483 For further information: Thank You!