Business World
March 30, 2010
AN international investment fund specializing in microinsurance is looking for local partners, noting the country’s large untapped market and the government’s promotion of the low-cost insurance product.
In a briefing last week, Stephane Chatonsky, principal of microinsurance fund LeapFrog Investments, said the firm has identified the Philippines as one of its key markets, and is willing to invest up to $25 million of the $110 million raised from various investors in the country.
Mr. Chatonsky said LeapFrog, founded in Luxemberg and maintaining offices in Australia and the US, chose the Philippines because of its attractiveness as investment destination.
“We chose the Philippines because of the stable macroeconomic environment and good potential for growth,” he said.
“The government has also realized [mi-croinsurance] is a good tool for poverty alleviation and it is pushing hard to get commercial insurers and non-profits to develop it.”
Mr. Chatonsky said LeapFrog is looking at investing in large insurance companies and developing their microinsurance products.
It may also invest in smaller firms that sell microinsurance, or tie up with microfi-nance institutions, church groups or telecommunication firms that serve as distribution channels for the products.
Mr. Chatonsky noted that 70% of Filipinos could be classified as “low-income” but can afford to buy insurance so the potential market for microinsurance is “huge.”
LeapFrog, in its website, claimed it is the “world’s first microinsurance fund.” It said it aims to bring financial services to poor people in India, Kenya, Ghana and South Africa, aside from the Philippines.
Its investors include the International Finance Corp. of the World Bank Group, the Soros Economic Development Fund of billionaire investor George Soros and Accion, one of the world’s largest micro-finance institutions.
Insurance Commissioner Santiago Javier Ranada welcomed the development.
“This will help low income groups. We appreciate them helping because as of now there is low coverage for the D and E income groups, especially in rural areas,” he said in a telephone interview yesterday. “Now, they can get insurance for business, life and health.”
Mr. Ranada hopes LeapFrog’s interest in the Philippines signals the start of investments into the local microinsurance industry.
“[Getting investors in the industry is really] the idea behind the release of rules on microinsurance, since people will be more willing to invest if they know the rules of the game,” he added.
Microinsurance, he pointed out, is a potential multibillion-peso industry, given the number of Filipinos belonging to the D and E classes who are without the protection insurance provides.
In January, the Insurance Commission (IC) issued a circular that amended Insurance Memorandum Circular (IMC) 9-2006, the previous order that governed the microinsurance industry.
The new circular states that all insurance firms, cooperatives, and mutual benefit associations licensed by the IC may sell microinsurance products, which may consist of one type, or several -- life, non-life and health -- bundled together.
It also requires microinsu-rance agents to be licensed by the IC, but they do not have to take regular licensure exam. Instead, they must undergo a special training program and pass a qualifying exam.
The circular also redefines microinsurance as those whose amount of premiums, contributions, fees or charges, computed on a daily basis, does not exceed 5% of the current daily minimum wage rate for non-agricultural workers in Metro Manila.
The maximum sum of guaranteed benefits should be not more than 500 times the daily minimum wage rate for non-agricultural workers in Metro Manila.
Mr. Chatonsky said that aside from providing funding, LeapFrog can provide expertise to help develop the country’s microinsurance industry.
“The big challenge is the distribution channel. It has to be really efficient. You have to reach the poor in a very cost effective way and... some insurers don’t know how to do it,” he said.
“We have done it in India and Africa. It was difficult but we have done it so we are bringing that expertise to the Philippines.”
Mr. Chatonsky said that while microinsurance is good business, it also benefits the poor.
“By providing microinsurance, we give people the opportunity to get out of poverty. This will allow them to manage risks through affordable and quality insurance policies so if something bad happens to them, they can continue to live their lives and accumulate assets,” he said. -- Don Gil K. Carreon
Wednesday, March 31, 2010
P1.1B For Microinsurance
The world’s first microinsurance fund, which is partly owned by billionaire investor George Soros, is looking to invest up to P1.1 billion in the Philippines’ fledgling microinsurance industry through partnerships with local insurance companies, banks, retail stores or telecommunications operators. LeapFrog Investments, which is also partly owned by the World Bank’s International Finance Corp. (IFC), on Monday announced it has raised $110 million from global institutions, which it will invest in the microinsurance sectors in Asia and Africa.
Business Mirror
P1.1B for microinsurance
Written by Erik de la Cruz / Reporter
Tuesday, 30 March 2010 21:34
The world’s first microinsurance fund, which is partly owned by billionaire investor George Soros, is looking to invest up to P1.1 billion in the Philippines’ fledgling microinsurance industry through partnerships with local insurance companies, banks, retail stores or telecommunications operators.
LeapFrog Investments, which is also partly owned by the World Bank’s International Finance Corp. (IFC), on Monday announced it has raised $110 million from global institutions, which it will invest in the microinsurance sectors in Asia and Africa.
The Philippines, along with India, South Africa, Ghana and Kenya, is on its list of priority countries to invest in in trying to get a bigger slice of the underserved global microinsurance market, especially in so-called emerging economies.
“We are tremendously excited by the potential of microinsurance in the Philippines,” said Staphane Chatonsky, the LeapFrog principal who leads the fund’s investments in East Asia.
Chatonsky, in a press briefing in Manila, said the fund was planning to make investments of P250 million to P700 million in each partnership deal with a local entity that must be businesses with “significant” distribution platforms that reach the mass market.
Talks were under way with potential partners and they hope to seal agreements soon, he said. But he declined to identify their possible partners.
The Bangko Sentral ng Pilipinas recently announced that rural, cooperative and thrift banks may now sell microinsurance products. The Insurance Commission has released a set of regulations for selling insurance products that meet the poors’ need for risk protection.
“We are here for the long-term and bring unique expertise,” said Chatonsky. “We will partner with local players and bring to bear resources and our knowledge of global practices to ensure commercial success and impact in supporting the provision of affordable and relevant microinsurance products.”
He said they are attracted to the Philippines because while over 70 percent of the population or more than 65 million people are classified as low-income. They have, however, sufficient resources to buy insurance for their families and enterprises.
He also said the Philippines has a relatively stable macroeconomic environment and “good” potential for growth. The government, he added, has been actively promoting microinsurance as a tool for poverty alleviation through appropriate tax, regulatory frameworks, measures, and incentives.
He also mentioned the existence of multiple distribution channels to reach low-income Filipinos such as banks, retail stores, mobile-phone networks, microfinance institutions, and even churches.
The fund has already made its first investment of over $6 million in AllLife, a South African insurer serving people living with HIV and diabetes.
According to Chatonsky, the global market for microinsurance has potential to absorb 1.5 billion policies as of 2009.
Four global institutions were scheduled to announce in Frankfurt on Monday investments in LeapFrog’s profit-with-purpose program. The World Bank’s IFC committed $20 million while the Soros Economic Development Fund has approved a $7-million investment, according to a press statement released in Manila.
Flagstone Reinsurance, a global reinsurer, will invest $12 million while the biggest investment of $25 million is to be made by KfW Entwicklungsbank and BMZ, the German Federal Ministry for Economic Cooperation and Development.
With these investments, LeapFrog said it is now by far the largest dedicated investor in the microinsurance sector worldwide.
Business Mirror
P1.1B for microinsurance
Written by Erik de la Cruz / Reporter
Tuesday, 30 March 2010 21:34
The world’s first microinsurance fund, which is partly owned by billionaire investor George Soros, is looking to invest up to P1.1 billion in the Philippines’ fledgling microinsurance industry through partnerships with local insurance companies, banks, retail stores or telecommunications operators.
LeapFrog Investments, which is also partly owned by the World Bank’s International Finance Corp. (IFC), on Monday announced it has raised $110 million from global institutions, which it will invest in the microinsurance sectors in Asia and Africa.
The Philippines, along with India, South Africa, Ghana and Kenya, is on its list of priority countries to invest in in trying to get a bigger slice of the underserved global microinsurance market, especially in so-called emerging economies.
“We are tremendously excited by the potential of microinsurance in the Philippines,” said Staphane Chatonsky, the LeapFrog principal who leads the fund’s investments in East Asia.
Chatonsky, in a press briefing in Manila, said the fund was planning to make investments of P250 million to P700 million in each partnership deal with a local entity that must be businesses with “significant” distribution platforms that reach the mass market.
Talks were under way with potential partners and they hope to seal agreements soon, he said. But he declined to identify their possible partners.
The Bangko Sentral ng Pilipinas recently announced that rural, cooperative and thrift banks may now sell microinsurance products. The Insurance Commission has released a set of regulations for selling insurance products that meet the poors’ need for risk protection.
“We are here for the long-term and bring unique expertise,” said Chatonsky. “We will partner with local players and bring to bear resources and our knowledge of global practices to ensure commercial success and impact in supporting the provision of affordable and relevant microinsurance products.”
He said they are attracted to the Philippines because while over 70 percent of the population or more than 65 million people are classified as low-income. They have, however, sufficient resources to buy insurance for their families and enterprises.
He also said the Philippines has a relatively stable macroeconomic environment and “good” potential for growth. The government, he added, has been actively promoting microinsurance as a tool for poverty alleviation through appropriate tax, regulatory frameworks, measures, and incentives.
He also mentioned the existence of multiple distribution channels to reach low-income Filipinos such as banks, retail stores, mobile-phone networks, microfinance institutions, and even churches.
The fund has already made its first investment of over $6 million in AllLife, a South African insurer serving people living with HIV and diabetes.
According to Chatonsky, the global market for microinsurance has potential to absorb 1.5 billion policies as of 2009.
Four global institutions were scheduled to announce in Frankfurt on Monday investments in LeapFrog’s profit-with-purpose program. The World Bank’s IFC committed $20 million while the Soros Economic Development Fund has approved a $7-million investment, according to a press statement released in Manila.
Flagstone Reinsurance, a global reinsurer, will invest $12 million while the biggest investment of $25 million is to be made by KfW Entwicklungsbank and BMZ, the German Federal Ministry for Economic Cooperation and Development.
With these investments, LeapFrog said it is now by far the largest dedicated investor in the microinsurance sector worldwide.
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