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RURAL BANKERS ASSOCIATION OF THE RURAL BANKERS

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					           RURAL BANKERS ASSOCIATION OF THE
                     PHILIPPINES:

      ENHANCING THE CAPACITY OF RURAL BANKS
                       AS
             MICROINSURANCE AGENTS



BY:


RUTH ASERON
Microinsurance Coordinator
RBAP-MABS
 AGENDA
 Microinsurance in the Philippine context
   Philippine definition
   Common Microinsurance Products

 Brief description of the Rural Bank Microinsurance Market
   Potential size
   Characteristics

 Rural Banks as Microinsurance Agents
   Roles and Responsibilities of Rural Banks
   Advantages of RBs as MI Distribution Channels
   Lessons of Rural Bank MI Agents
   The RBAP response
                p
                            pp
       Microinsurance: Philippine definition
    A financial product where:
        Premiums (computed daily) must not be more than 5% of minimum of non-
                                                                           non
         agricultural wage in Metro Manila, hence premiums cannot exceed PhP 20.20 per
         day (US$ 0.47 daily) or PhP 505.00 per month (US$ 11.60 monthly)
        Guaranteed benefits are capped at no more than 500 times the same daily wage
                                                    $
         or at an annual maximum of PhP202,000 (US$ 4,700)



    Contracts shall clearly state benefits and terms
        Easily understood by insured either in English or Filipino
        Documentation requirements are “simple”
        Collections coincide with cash flows

                                                                    - MI National Regulatory Framework -


Minimum daily wage as of October 2010 is at PhP 404.00 or USD 9.40 and estimated workdays in a month is 25
          The Philippine Rural Banking Network

 Client base of 6 million

 Rural Banks cover 85% of
  municipalities (mostly in rural
  areas)

 Total branch/office network is
  2,700

 Total loan portfolio: PhP 98 Billion
  (US$ 2.3 B)

 Deposit base: PhP 105 billion
  (US$ 2.6 B)
Size of the Rural Bank Micro- Market

      Type of MF Accounts                                  Number
                                                    (as of December 2010)



Microfinance Loans                              Approximately 800,000



Micro-Deposits                                    4,941,445 (86%) **



Estimated Household Members                             15,000,000




                            **Source: Philippine Deposit Insurance Corporation, December 2010
The Target Market of RB Microinsurance
       g

                                                       Microfinance
                                                        Borrower

                                                       Microfinance
                                                          p
                                                        Depositor

                                                        Low Income
                                                       Low-Income client
                                                        of the Rural Bank

 BSP Memorandum 027-2011 redefines “microfinance clients” to include any
 existing client classified by the bank as low-income or with an average annual
 household income of PhP206,000 or less (USD 4,745)
Rural Bank Microinsurance Team

                           Rural Bank
                     (licensed as MI Agent)
                     (                g )



            Microinsurance           Microinsurance
            Soliciting Officer       Soliciting Officer



                           Marketing /
   Microfinance             Business
                                                 Compliance Officer
    Supervisor            Development
                            Manager




                            Sales Force
             (microfinance account officers / field staff)
 Servicing of
  premium                                                                  Client
payments and                                                             Education
   claims                       RURAL BANK
                                    LICENSED
                               MICROINSURANCE
                                   AGENT




      Marketing
                                                                     Consumer
   of IC approved                                                    P t ti
                                                                     Protection
    MI Products




   While the rural bank is a licensed agent of its microinsurance provider,
         its microfinance clients remain of prime importance.
       g
Advantages of Rural Banks as MI Agents
                                 g


 Ability to capitalize on existing operational structure
        y      p                  g p
  for cost-efficient MI sales and servicing

 Compliance to both insurance and bank regulators
  increases their credibility as agents of MI products

 Enhance clients’ access to other relevant financial
  products and services

 Balanced recognition of MI as both a value-added
  client service & as a revenue-generating product
      Lessons of Rural Banks as MI Agents
           Challenges                             RBAP’s Response
 Onerous requirements and                  RBAP worked with the insurance and
                                                       k d ith th i                d
  procedures make it difficult for rural     banking regulators to clarify rules and
  banks to comply with insurance and         develop a turn-key approval process
  bank regulations on their own
                                            RBAP acts as a “b tt services
                                                      t      “better     i
 Challenge in comparing and                 bureau” to assist banks in selecting and
  deciding on the best insurance             monitoring insurance partners
  partners to work with
                                            With th support of the USAID, ILO
                                                   the          t f th USAID ILO,
                                             and Insurance partners, RBAP was
 Need to educate bank staff &               able to support a major nationwide
  officers on microinsurance                 training effort to educate bank
  management and sales                                 l       i i
                                             personnel on microinsurance

 Need for more market information          Facilitate access to market information
                                             for regulators, rural banks and
                                             insurance providers th
                                             i               id          h dialogues
                                                                   through di l
                                             and technology-based feedback
                                             mechanisms
Microinsurance Agent Training for
RBs
    ys




                                           ay
2 day

                Microinsurance
          Basic Microins rance




                                        1 da
                                                       Product Mastery
                Training                                   Training
               (with qualifying exam)



            By RBAP-RBRDFI                           By Partner-Insurer


    • Fundamental Concepts and                  • Microinsurance product
    Principles of Insurance                     features
    • Difference between traditional
                                                • Special coverages and riders
    insurance and MICROinsurance
    • Regulations on MI sales,                  • Standard policy provisions
    marketing and servicing of MI
                                                • Proper Market conduct
    • Effective marketing of
    Microinsurance                              • Claims settlement
       The RBAP MI Training Course

  y
Key Modules:
  1. Fundamental concepts and
     principles of MI
  2. MI Regulations in the
           g
     Philippines
  3. Effective Marketing of MI



Training Approaches:
       Lecture
  40 % Lect re
  25 % Group Discussions
  35 % Games & Simulation
     Exercises
                                       GROUP DISCUSSIONS
                                       (RBAP MI Training Approaches)

   Allows for sharing of field lessons and practical insights



   Typically interactive and open



   Employs C
    E l          Studies
            Case St di
Games & Simulation Activities
   (RBAP MI Training Approaches)
                   g pp        )



                         Understanding MI:
                           Barangay Bigkis (localized
                             Treasure Pot game)

                           “Ang MI ay parang …”
                             Ang
                             (Microinsurance is like)

                           Bahay-Buhay-Bagyo
                             (“house-life-typhoon”)




                         Marketing & Selling MI:
                           Th M t      Obj t
                            The Mystery Object
                           D-I-G Tactic (Discover
                            Interests then Get
                            solutions)
                                     )
  Results to Date    (as of Oct)




# of Courses held       13



# of Banks Trained     157



# of Bank Staff
                       297
Trained


# of Banks in
                        45
Approval Process

      )
# of Banks
Approved as MI           7
Agents
                                                 Compliance Process



                         REQUEST                 ASSEMBLE                  CHOOSE         SUBMIT
   TRAIN

                          For BSP No                                                    requirements
  In MI Basic +
                          Objection
                                                    your MI                  your         to RBAP-
Product Mastery                                      Team                partner well
                            Notice                                                         RBRDFI




     RBAP-RBRDFI coordinates submission of rural banks’ licensing requirements to the
     Insurance Commission and then the Bangko Sentral ng Pilipinas (BSP).
    RBAP
Microinsuranc
  e Website

(Online Portal)
MI Website

 Find
“Find a MI
Product”

 Feature
  MI
Website

“Request
Proposal
   ”

Feature
F t
                          p
                Partnership Framework

                                                         Rural Bankers
                         Rural Bankers                   Research and
                       Association of the                Development                Funding Support
                       Philippines (RBAP)               Foundation, Inc.
Technical                                                 (RBRDFI)
Assistance




                                                                           Mindanao
             Luzon Federation           Visayas Federation                 Federation




                                 Member–Rural Banks
    RUTH ASERON
 Microinsurance Coordinator
         RBAP-MABS  S
microinsurance@rbapmabs.org
http://microinsurance.rbap.org

				
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posted:10/22/2012
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