USAID Supports RBAP Microinsurance Seminars

Mr. Michael J. McCord, President of the MicroInsurance Centre and one of the world’s leading international experts on microinsurance, facilitated two separate seminars on microinsurance for the Rural Bankers Association of the Philippines (RBAP) member rural banks and local insurance partners.

The seminar for rural banks focused on enhancing microinsurance sales and servicing. Nineteen (19) representatives from twelve (12) rural banks from Luzon and Visayas attended the training held on February 02. The workshop was designed to benefit rural banks that want to improve the ways they market and sell microinsurance. It is clear in the Philippines that there is a need for valuable risk management tools among the low income Pinoy. The training focused on how rural banks can help people to see microinsurance as an effective response to that need. Key topics discussed included strategies to market voluntary microinsurance and how to better educate clients about the benefits of microinsurance.

Recently, the Rural Bankers Research and Development Foundation, Inc (RBRFI) has developed an extensive Microinsurance Toolkit to provide Rural Bankers with curricula, templates, forms, processes, and other information to help them maximize their potential for success in providing microinsurance value to their clients. An overview of the toolkit was presented to the participants. The RBRDFI Microinsurance Toolkit is expected to be rolled out to all rural banks that obtain microinsurance licenses in the coming months.

Drawing from lessons from across the globe, Mr. McCord offered important lesson on how banks can effectively share the message of how microinsurance can help to protect clients and their households from financial losses due to the risks we all face and to demonstrate the trustworthiness and reliability of the claims process.

On the following day, RBAP partner microinsurance companies attended a half-day seminar that focused on the uses of technologies being explored around the world to expand access to microinsurance. Mr. McCord pointed out that microinsurance must provide value to policyholders, while being offered at relatively low premiums, that still yield a fair profit. In order to accomplish this, the costs of administration must be reduced as much as possible. Appropriate technology is a key component in this effort.

The seminar also highlighted the strong role and partnership potential of the rural banking industry as a key distribution point for microinsurance.  With more than 2,700 branches and other banking offices and more than 6 million clients and another 10 million household members, the rural banking sector will clearly be one of the best private sector driven distribution points for microinsurance in the Philippines. Representatives from 12 insurance companies, the Philippine Life Insurance Association (PLIA) and the Asian Development Bank (ADB) participated in the workshop held at the Asian Institute of Management.

Mr. McCord shared the most important lessons behind successful deployments of microinsurance around the world using his S.U.A.V.E. principles. Successful microinsurance must be Simple, Understood, Accessible, Valuable and Efficient (S.U.A.V.E).  Mr. McCord led participants in a discussion about the effective uses and role of technology in microinsurance product development and service delivery.  He shared uses of technological innovations being used to facilitate microinsurance in several countries and also highlighted the point that quite a bit of focus today is on the uses of various technologies, including mobile phones, to enhance the various aspects of microinsurance delivery, including the ability to pay valid claims rapidly.

RBAP also presented their Microinsurance website to illustrate how RBAP is using technology to support rural banks and insurers with updates and relevant market information that will facilitate the expansion of microinsurance through partnerships between rural banks and insurance companies in the Philippines.

As Mr. McCord observed, the Philippines is in the midst of a massive financial literacy campaign to promote microinsurance and now has one of the best enabling environments to support microinsurance in the world with good collaboration among key government agencies and a strong private sector led focus.  Mr. McCord stated that “In the Philippines, it is clear that many people and organizations have been collectively responsible for the dramatic and positive example the Philippines has shown the world in terms of microinsurance. … In the midst of this powerful movement, RBAP has remained focused on its members and the needs of their clients. This focus has yielded significant improvements in policy, processes, client value, and potential outreach.”

The seminars are part of the initiative of RBAP-Microenterprise Access to Banking Services that is supported by the United States Agency for International Development. Support for the event was also provided by the International Labour Organization’s Microinsurance Innovation Facility which has been providing support to the Rural Bankers Research and Development Foundation, Inc (RBRFI) to expand microinsurance through the rural banking sector. Since early 2011, more than 350 rural bankers from 168 rural banks have completed the RBRDFI Microinsurance Training Course required as a first step in licensing rural banks as microinsurance agents. As a result, more than 472,600 low income rural bank clients and their family members are now availing of microinsurance services.