MicroinsurancePolicy Perspective, Trends and key issues

Presentation to SECP and Insurance Sector Seminar

29 November 2011

Policy Perspective

Microfinance (Credit, Deposit,

Insurance and Remittances)

Transitory Vulnerable

Transitory Poor

Chronic Poor

Extremely Poor

Non-Poor

Transitory Non-Poor

From a pyramid

To a Diamond

HNWI

Poor

Middle Class

What to do is, by and large known and simple

HEALTH CARE

EDUCATION

MICROFINANCE

HOUSING

BASICSERVICES

Access To

PovertySIGNIFICANTREDUCTION

Responding to poverty: The arsenal

*Source: : http://maps.grida.no/go/graphic/poverty-by-country-share-of-population-living-under-usd-2-per-day-2004

Relationship between Financial Exclusion and poverty exists…

There is a moderate to strong relationship between GDP per capita and usage of financial services

Bank Loan per 1,000 adults

Deposit Accounts per 1,000 Individuals

Bank Branches per 1,000 Adults

Bangladesh2.5

India19.7

Thailand92.1

USA3,790.2

Brazil101.1

UK4,484.4

Pakistan4.0

Indonesia15.8

Kenya11.1

Sri Lanka14.2 Malaysia

25.7

Argentina105.4

Insurance density in USD$

Insurance Density: Gross Premium per capita

Industry Trends

0102030405060708090

June'08 June'09 June'10 June'11

InsuranceDeposit BookLoan Book

Trends in credit, Deposits and insurance

Trends in Insurance

Trends in Insurance

Trends in Insurance

Issues/Challenges

MFPs & Insurance Co.

Awareness & Low literacy High Premium High Transportation Cost

(Rural) Product viability Culture (Low demand for

voluntary insurance distrust Diseases high Consumer protection

Client

Transparency Cashless vs. cash based Settlement of claims (time required) Competition (product pricing) Volumes required (low cost) Existing products not meet the need Product diversification Marketing difficult then

Credit/Savings Push Vs. Pull Late reimbursement of claims

Regulation Lack of understanding of microinsurance Lack of appropriate information Legal framework not supportive MFPs agents or brokers Product diversification

Issues/Challenges

Role of PMN

20

THANK YOU…….