Manila Bulletin
Business Option
By FLOR G. TARRIELA
May 26, 2011, 12:22am
MANILA, Philippines — “We can cheat death once or twice but we cant get out of this world alive.” Tatay Andro and his wife are engaged in dress-making business.
On September 26, 2009, Andro drowned while crossing a wooden bridge somewhere in Pasig at the height of typhoon Ondoy. Last July 2010, Luningning Cruz, a mother of 4, engaged in the rag making business, was hit by a motorcycle, suffered head injury and died upon reaching the nearest hospital.
Anthony Samson, eldest in a brood of 11 children of Elenor Samson, was devastated when his parents died in an accident while doing business last January.
Under ordinary circumstances, the Batuampos, Cruzes, and Samsons would have very little savings to draw upon in order to settle funeral expenses, much less, cope with the loss of livelihood because of the untimely death of the family breadwinner.
But because they had earlier decided to participate in a micro-insurance program, their families received substantial benefits that allowed them to cope with the loss more graciously.
What is micro insurance? From the Insurance Memorandum Circular 1-2010 issued by the Insurance Commission, micro-insurance is an activity providing specific insurance, insurance like products and services that meet the needs of the low income sector for risk and relief against distress, misfortune or other contingent events.
The minimum capital requirement is P5 million. To date the Insurance Commission has approved the establishment of 16 micro insurance Mutual Benefit Association (MBAs). It has also approved 4 regular insurance companies to offer micro-insurance. The Bangko Sentral ng Pilipinas (BSP) has granted approval for rural banks, thrift banks and cooperatives to sell micro-insurance.
In the above particular cases, they had enrolled in the micro-insurance program of TSPI MBA TSPI (Tulay sa Pag-Unlad Inc.) is a Christian micro-enterprise NGO involved in micro-lending and micro-insurance. In the case of Tatay Andro, TSPI MBA awarded his family P180,000 in benefits.
Currently, Tatay Andro’s wife, Nanay Liza and their 3 children continued what the head of the family previously started. With the help of her co-members in TSPI, Nanay Luningning’s claim was filed, documentary requirements were completed and within a week, benefits amounting to P165,000 were given to her beneficiaries.
As for Anthony, he was somehow comforted when he received benefit claims amounting to more than P100,000. The sadness that he and his siblings experienced from the loss of both their parents was lessened because of the help that TSPI extended to them through micro-insurance.
As can be seen from the above incidents, the poor are very vulnerable to risks such as death caused by illness or accident, disability and property losses; especially when it is the death of the family’s breadwinner. In the past, life insurance would be available only to the middle and upper levels of society. The poor have little to save.
However, the creation of micro-insurance products has provided a tremendous blessing to the poor.
With micro-insurance, the poor can set aside as little as P5 per week to pay for their insurance premiums, which, depending on the offering of the micro-insurance provider, can pay out natural death benefits of P40,000 or more.
There are many institutions that are now offering micro-insurance, many of the pioneers being associated with those who already offer micro-lending services to the poor.
Such is the case with the TSPIMBA. While serving the poor by offering them a variety of enterprise and livelihood loans, TSPI desired to extend more services and assistance to their clients. They saw micro-insurance as a feasible and viable service that the clients desired.
TSPI MBA was set up in order to extend financial assistance in the form of death benefits, loan redemption assistance, disability benefits and other services to the borrowers of TSPI and their immediate family members.
Becoming a member of the TSPI MBA will cost the member a fee of only P240.00 per year. This entitles a member to death benefits for the member, spouse and 4 qualified children, accidental death and dismemberment benefits for the member and his/her spouse, total and permanent disability for the member and equity value also for the member.
Moreover, if the member is also a borrower of TSPI, subject to an additional premium of P1.00 per thousand of loan availed, the member is also entitled to loan availment benefit package composed of death benefit, accidental death benefit, accidental dismemberment, credit life and funeral assistance.
It has only been 4 years since TSPI MBA started its micro-insurance operations. it now has more than half a million members as of December 2010. Micro-insurance is relatively new. Already it is showing to be a viable and promising business proposition. And clearly a big help to the poor.
* * *
Ms. Tarriela is Chairman of Philippine National Bank. She is a director of TSPI NGO and TSPI MBA. She was formerly Undersecretary of Finance and Vice President Citibank N. A
Saturday, May 28, 2011
Saturday, May 21, 2011
Microinsurance Can Help Poor Prepare for a Better Future - Experts Say
News Release
Asian Development Bank
6 May 2011
Panel discusses how to promote microinsurance in Asia
HA NOI, VIET NAM- Microinsurance is a key tool to help the world’s poor cope with unexpected setbacks, a panel of experts said today.
The panel, speaking at the Asian Development Bank’s (ADB) 44th Annual Meeting of the Board of Governors here, said microinsurance provides a prime opportunity for private sector insurers to help a large, underserved customer base and still make a profit. The seminar was titled “Protecting the Bottom Billion the Private Sector Way.”
Many of the world’s poorest remain mired in poverty because a sudden illness or death in the family, crop failure, or natural disaster causes an unexpected loss of income or large expense. Others can be pushed back into poverty by these same events. Microinsurance -- low-cost insurance for low-income people – can help the poor cope in such times of difficulty, allowing them to plan for a better future.
President Bill Clinton, founder of the William J. Clinton Foundation and 42nd President of the US delivered an introduction to the seminar via video.
Microinsurance is not yet available to the vast majority of the nearly 2 billion who live on less than $2 a day in Asia and the Pacific. In part that is because regulation and supervision, where it exists, does not support insurance products aimed at the poor. Private insurers have been slow to provide microinsurance given the regulatory uncertainties and the difficulties of delivering policies and paying small claims on such a vast scale.
Those companies already offering microinsurance, by contrast, report strong demand and predict growth in the sector. That suggests there is interest in using such products when regulatory circumstances allow. Low-income clients also look for policies that are offered at a price they can afford and in a way they can understand and use, the panel said.
“There is a huge untapped market for microinsurance for lower-income households. The commercial sector will drive the dramatic expansion of the industry, but we will have to address it in a systemic way across the value chain,” said Michael McCord, President of the Microinsurance Centre.
ADB has, in recent years, spent $4.4 million to promote microinsurance in Sri Lanka, Bangladesh, the Philippines, and elsewhere. In 2010, it allocated $750,000 to help develop the nascent microinsurance markets in the People’s Republic of China and Mongolia where there are over 200 million potential clients.
The panel was moderated by Dean Karlan of Yale University, a noted evaluation expert on tools for access to finance, and, as well as Mr. McCord, comprised Doug Barnert, Executive Director of the Group of North American Insurance Enterprises; Evangeline Crisostomo Escobillo, Advisor to the Board of Phil Plan Inc. and former Insurance Commissioner of the Philippines, Tilman Ehrbeck, Chief Executive Officer of the Consultative Group to Assist the Poor; and Andrew Kuper, Founder and President of LeapFrog Investments.
Asian Development Bank
6 May 2011
Panel discusses how to promote microinsurance in Asia
HA NOI, VIET NAM- Microinsurance is a key tool to help the world’s poor cope with unexpected setbacks, a panel of experts said today.
The panel, speaking at the Asian Development Bank’s (ADB) 44th Annual Meeting of the Board of Governors here, said microinsurance provides a prime opportunity for private sector insurers to help a large, underserved customer base and still make a profit. The seminar was titled “Protecting the Bottom Billion the Private Sector Way.”
Many of the world’s poorest remain mired in poverty because a sudden illness or death in the family, crop failure, or natural disaster causes an unexpected loss of income or large expense. Others can be pushed back into poverty by these same events. Microinsurance -- low-cost insurance for low-income people – can help the poor cope in such times of difficulty, allowing them to plan for a better future.
President Bill Clinton, founder of the William J. Clinton Foundation and 42nd President of the US delivered an introduction to the seminar via video.
Microinsurance is not yet available to the vast majority of the nearly 2 billion who live on less than $2 a day in Asia and the Pacific. In part that is because regulation and supervision, where it exists, does not support insurance products aimed at the poor. Private insurers have been slow to provide microinsurance given the regulatory uncertainties and the difficulties of delivering policies and paying small claims on such a vast scale.
Those companies already offering microinsurance, by contrast, report strong demand and predict growth in the sector. That suggests there is interest in using such products when regulatory circumstances allow. Low-income clients also look for policies that are offered at a price they can afford and in a way they can understand and use, the panel said.
“There is a huge untapped market for microinsurance for lower-income households. The commercial sector will drive the dramatic expansion of the industry, but we will have to address it in a systemic way across the value chain,” said Michael McCord, President of the Microinsurance Centre.
ADB has, in recent years, spent $4.4 million to promote microinsurance in Sri Lanka, Bangladesh, the Philippines, and elsewhere. In 2010, it allocated $750,000 to help develop the nascent microinsurance markets in the People’s Republic of China and Mongolia where there are over 200 million potential clients.
The panel was moderated by Dean Karlan of Yale University, a noted evaluation expert on tools for access to finance, and, as well as Mr. McCord, comprised Doug Barnert, Executive Director of the Group of North American Insurance Enterprises; Evangeline Crisostomo Escobillo, Advisor to the Board of Phil Plan Inc. and former Insurance Commissioner of the Philippines, Tilman Ehrbeck, Chief Executive Officer of the Consultative Group to Assist the Poor; and Andrew Kuper, Founder and President of LeapFrog Investments.
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