Asia: Markets, whatever the penetration, beckon health insurers

Source: AIR eDaily | 25 Feb 2014

In several high medical insurance ownership markets in Asia, people are still eager to buy medical insurance, though they are looking for better products than those they currently own, in terms of reimbursement rates and coverage. In low ownership markets, people want easy entry products or those that supplement government coverage, according to global reinsurance giant Swiss Re.

Value-added features in a health insurance plan (eg coverage for family) are of particular importance to consumers in high medical insurance ownership markets. In low ownership markets, increased education combined with products that are simple to issue and tailored to meet consumers’ immediate needs, may be a catalyst for purchase

In its study on medical insurance in China, Hong Kong, India, Indonesia, Malaysia and Thailand, Swiss Re found that consumers in all these markets exhibit a very high level of awareness of medical insurance products, but penetration varies significantly. The penetration gap is significant in markets like Indonesia and India, but less so in markets like Malaysia and China, where it is somewhat negated by group medical coverage or basic government coverage. “The challenge for insurers is to translate awareness into ownership, especially in markets where a huge gap exists,” said Swiss Re.

Irrespective of the level of medical insurance penetration and the extent of government support, patients still rely very heavily on personal funds or family support to pay medical expenses in the markets surveyed. There is thus a need to better educate the consumers on the value of medical insurance.

Not surprisingly, household income level has a direct bearing on medical insurance ownership. Across all of the markets surveyed, medical insurance ownership is the highest among those in the top 30-percent income bracket. Ownership is also the lowest among those in the bottom 30-percent income bracket – for example, it is almost negligible among those in this income bracket in Indonesia. Similarly, ownership is high in the top 30-percent income bracket in Thailand (78 percent), but extremely low in the bottom 30-percent income bracket (7 percent).

Across all the surveyed markets, claimants’ experience is generally good, with the majority thinking that their claims have been settled fairly. More than two-thirds of respondents in Thailand, Indonesia and China who have made a claim in the past 12 months are satisfied with their experiences. However, claimant satisfaction is lower in Malaysia.

Notwithstanding the high ownership of medical insurance and a reasonable level of government support, respondents in China, Hong Kong and Malaysia show a high intention to purchase a new medical policy or upgrade their existing policy in the next 12 months. The fact that many of them are already policy owners indicates that their existing plans may be insufficient to meet their requirements. In India, Indonesia and Thailand, despite low penetration, the purchase intention is lower than in other markets, but still reasonable at around 30 percent. Lack of knowledge and price/affordability are major barriers when it comes to respondents’ intention to buy, said Swiss Re. There is also a tendency among both Indonesians and Thais to rely on public healthcare/government healthcare/insurance schemes.

The study polled 2,561 respondents aged 20 to 70 years in the six markets to gauge their current medical care situation, medical claims experiences and preferences, as well as future intentions and preferences for product features and channels

Philippines: Microinsurance coverage highest in Asia

Source: AIR eDaily | 04 Feb 2014

One out of five Filipinos is covered by microinsurance, making the Philippines the country with the highest coverage in Asia.

The Department of Finance (DOF) says that micro-insurance coverage in the Philippines hit 19.95 million last year, or 20.4 percent of the population, from only three million in 2008 when only 3.3 percent of the population was covered.

Citing figures from the World Bank, the DOF said that the microinsurance penetration rate in the Philippines last year was ahead of Thailand’s 14.1 percent, India’s 8.9 percent, Bangladesh’s 5.1 percent, Malaysia’s 3.6 percent, and Pakistan’s 3 percent. The penetration rate of microinsurance stood at only 0.9 percent in China, 0.5 percent in Indonesia, and 0.2 percent in Vietnam.

Mr Emmanuel Dooc, chairman of the industry regulator, the Insurance Commission, has said that the government has set a goal of further increasing the penetration rate of microinsurance over the medium term.

He said that an estimated 27 million poor Filipinos should be covered by microinsurance by 2016. This would be achieved through more partnerships between insurers and cooperatives which have been the driving force behind marketing microinsurance in the country.

MICRO INSURANCE PAYS P500M TO YOLANDA VICTIMS

Malaya Business Insights
January 30, 2014

Microinsurance providers paid victims of typhoon Yolanda P500 million within 10 days after claims were submitted, according to Finance Undersecretary and Chief Economist Gil Beltran helping the victims recover faster.

Beltran said the Philippines has the highest microinsurance coverage among Asian emerging economies in 2013, with 20.4 percent of the total population covered by microinsurance.

Insurance cover for the Yolanda victims include damage from floods, and also life insurance.

According to the Department of Finance’s  latest economic bulletin, microinsurance coverage rose from three million in 2008 or merely 3.3 percent of the population, to 19.95 million  last year, a six-fold increase over five years.

In an interview with reporters at the sidelines of the Capacity Building for Microinsurance Project Launch, Beltran said the industry can tap a lot of clients, especially since the Philippines is often hit by typhoons and other natural calamities.

“We make sure that the providers are all legal. They are subject to regulation by the Insurance Commission, so they are monitored very closely,” Beltran said. The DOF said that there are 17 life insurance companies, 18 non-life insurance companies, and 19 mutual benefit associations offering microinsurance products.

Ranked next to the Philippines are Thailand and India, with 14.1 percent and 8.9 percent of its population covered by microinsurance, respectively.

According to the DOF, microinsurance refers to “the insurance, insurance-like, and other similar business activity of providing specific products and services that meet the needs of the poor for risk protection and relief against distress, misfortune, or contingent event.”

“Since microinsurance products and services are intended to meet the risk protection needs of the low-income sector, affordability of premium payments is low,” the DOF said.

The agency said for microinsurance products, the amount of premiums, contributions, fees or charges, computed on a daily basis, does not exceed five percent of the current daily minimum wage rate for non-agricultural workers in Metro Manila.

It also said the maximum sum of guaranteed benefits is not more than 500 times the daily minimum wage rate for non-agricultural workers in Metro Manila.

A microinsurance contract shall cover the insured, and at his or her option, may include his or her immediate family, as well as his or her assets.

The DOF said that a microinsurance contract may cover any of the following: death; accident and illness; fire and other extended perils; calamities, disasters, and other catastrophic events; casualty such as personal accident; and other contingent events as may be determined by the concerned regulator.

IN ASIA AND OCEANIA REGION; PH HAS HIGHEST MICROINSURANCE

Malaya Business Insight

The Philippines has the highest microinsurance coverage ratio in the Asia and Oceania region at 21.3 percent, an international report showed.

In the Philippines these are life insurance coverages that average at P10,000.

According to the briefing note titled, “The Landscape of Microinsurance in Asia and Oceania 2013,” there are 19.9 million Filipinos covered by microinsurance in the Philippines.

The report was jointly published by Munich Re Foundation and Deutsche Gesellschaft für Internationale Zusammenarbeit.

“Bangladesh, China, India, Thailand, and the Philippines are leading in the (Asia and Oceania) region, the Philippines being the country with the highest microinsurance coverage ratio,” the report said.

The microinsurance coverage ratio is the total number of insured people as a percentage of the total population.

According to the briefing note, while India and the Philippines led the way, microinsurance specific regulations are evolving constantly in countries like Bangladesh, China, Cambodia, Indonesia, Nepal, Pakistan, and Vietnam.

“Only four countries have a microinsurance coverage ratio of  greater than 5 percent: the Philippines, Thailand, India, and Bangladesh,” the report said.

“The countries in Asia and Oceania are varied in terms of size and development of their microinsurance sectors. However, even the small countries have started innovations which will eventually contribute to the advancement of the sector in a sophisticated way,” it added.

Thailand has a microinsurance coverage ratio of 14 percent, followed by India and Bangladesh with 9.2 percent and 6.2 percent, respectively.

This was followed by the countries of Malaysia (3.8 percent), Fiji (3.5 percent), Pakistan (3.1 percent), Cambodia (2.1 percent), East Timor (1.6 percent), and Jordan (1.5 percent).

In terms of number of people covered, India leads the Asian microinsurance market with 111.1 million.

The briefing note said that there are 172.8 million individuals and properties identified as having microinsurance coverage in the region.

According to the report, life insurance emerged as the main type of coverage in Asia and Oceania covering 83.9 million people.

This was followed by accident insurance which covers 77.8 million people, and health insurance which covers 28 million individuals.

Category:
Business News

PH now a model of microinsurance promotion in Asia

Philippine Inquirer
Home > Business > Headlines
By Michelle V. Remo
1:08 am | Friday, January 31st, 2014

The Philippines emerged on top of emerging economies in Asia in terms of microinsurance promotion, insuring 20.4 percent of its population, or 19.95 million Filipinos, by the end of 2013.
The Department of Finance (DOF) said other emerging economies in the region lagged far behind the Philippines in the area of microinsurance. Now, the country is serving as a model for other emerging economies.

Citing figures from the World Bank, the DOF said that the microinsurance penetration rate in the Philippines last year was ahead of Thailand’s 14.1 percent, India’s 8.9 percent, Bangladesh’s 5.1 percent, Malaysia’s 3.6 percent, and Pakistan’s 3 percent.

The DOF also said other emerging economies covered by the survey performed much worse. The penetration rate of microinsurance in China stood at only 0.9 percent, in Indonesia it was 0.5 percent, while in Vietnam, it was 0.2 percent.

Finance Undersecretary Gil Beltran said the penetration rate of microinsurance in the Philippines grew substantially from only 3.3 percent in 2008.

He said the growth of microinsurance in the country was credited largely to the model involving cooperatives.
Microinsurance products are commonly marketed among members of cooperatives.
Unlike regular insurance, microinsurance caters to low-income earners. Its premium is much cheaper and its benefits smaller.

Also, the microinsurance products sold through cooperatives are hybrid in nature, having the features of both life and non-life insurance. This means the products grant benefits in case of death or loss of property.
In particular, the premium for microinsurance products is not more than 5 percent of the current daily minimum wage, while benefits amount to no more than 500 times the daily minimum wage.

According to Emmanuel Dooc, head of the Insurance Commission, the government has set a goal of further
increasing the penetration rate of microinsurance over the medium term.

He said the estimated 27 million poor Filipinos should be covered by microinsurance by 2016.

“We want to attain this goal by the end of President Aquino’s term,” Dooc said.

More partnerships between insurance firms and cooperatives would help the commission attain its goal of further increasing the penetration rate of microinsurance in the country, he said.

Read more: http://business.inquirer.net/162435/ph-now-a-model-of-microinsurance-promotion-in-asia#ixzz2s2Cycnte

Microinsurance coverage rises

BusinessWorld
Economy
Posted on January 30, 2014 10:13:48 PM

OVER 19 million Filipinos are covered by microinsurance, more than six times the number recorded five years ago, the Department of Finance yesterday reported.

“Microinsurance coverage in the Philippines is the highest among Asian emerging economies at 20.4% of the total population,” Finance Undersecretary Gil S. Beltran said in an economic bulletin released by the department yesterday.

The country is followed by Thailand (14.1%), India (8.9%), Bangladesh (6.1%), Malaysia (3.6%), Pakistan (3%), China (0.9%), Indonesia (0.5%) and Vietnam (0.2%).

Since 2008, with the help of technical assistance from the Asian Development Bank, Japan and the German Agency for International Cooperation, the government has been able to draft a national microinsurance strategy, a comprehensive regulatory framework and a roadmap to financial literacy.

Microinsurance is said to be one of the key priorities of the Insurance Commission (IC) and the Aquino administration.

Based on the commission’s Insurance Memorandum Circular 1-2010, microinsurance products are those whose daily premiums do not exceed 5% of the current daily minimum wage rate of non-agricultural workers in Metro Manila.

Also, the maximum sum of guaranteed benefits should not be 500 times the daily minimum wage rate for non-agricultural workers in Metro Manila.

The report showed that only 3.1 million Filipinos were covered by microfinance in 2008, but this has grown sharply to 19.95 million as of end last year.

Various reforms adopted in 2010 led to the strong adoption of microinsurance in the country.

“First, it (the country) adopted a National Strategy for Microinsurance in 2010. This defined microinsurance, identified microinsurance providers and started the process of formalizing informal products,” Mr. Beltran said.

A regulatory framework for microinsurance also contributed to the growth, he said, noting that the guidelines served as the basis for the issuance of regulations by the IC and Bangko Sentral ng Pilipinas.

“Third, it adopted performance standards to be used by the IC in regulation and the providers to gauge their performance versus the whole industry. It also served the mutual benefit association chart of accounts to make it more relevant and useful to the needs of the industry,” Mr. Beltran said.

Financial literacy programs and training on microinsurance also boosted the industry’s penetration rate, he added.

“Lastly, an alternative dispute resolution mechanism to protect both consumers and providers and resolve disputes in a non-adversarial way” also contributed to the sector’s growth.

Moving forward, the DoF and IC will further increase the coverage of microinsurance through conducting financial literacy campaigns in partnership with local government units, Mr. Beltran said.

For his part, IC Commissioner Emmanuel F. Dooc, in an interview yesterday, said: “The IC will conduct more trainings to enhance its employees’ competency on microinsurance with the technical assistance and grants from Japan through the Asian Development Bank.”

“We also plan to expand the coverage of microinsurance to health, crop insurance and disaster insurance,” he said.

As of end-2013, there were 17 life insurers, 18 non-life companies and 19 mutual benefit associations licensed by the IC to sell microinsurance products. -- Ann Rozainne R. Gregorio