Micro Insurance Compilation

POWERING
INNOVATIONS
IN MICROFINANCE
conference on microfinance
July 24 - 25, 2008 * Asian Development Bank, Manila, Philippines
Edited by Foxit PDF Editor
Copyright (c) by Foxit Software Company, 2004 - 2007
For Evaluation Only.
CONCURRENT WORKSHOP SESSIONS

Thursday, July 24, 2008
1:30 p.m. - 3:00 p.m.
Microinsurance: Service to the Most Vulnerable Sector of the Society Auditorium Zone C
Microinsurance refers to insurance systems that offer products designed for the poor. Characteristics include simple
product design, frequent and affordable premium payments, and uniform benefit packages. It aims to provide access to
protection against events that affect the poor’s health and economic well-being. Typical products include life, memorial,
health and property insurance, and investment instruments.
Poor households, including most microfinance clients, are barely able to meet a balanced budget. Without any substantial
wealth, they are just managing their daily cash flows. Lacking of any financial safety net, the poor are very vulnerable to
financial impact of fortuitous events such as death, sickness, disease, disability and natural or man-made disasters.
Resource speakers: Facilitator:
Camilo Casals, Canadian Cooperative Joseph Alaban, RIMANSI Organization for Asia
Association Business Development Advisor for and the Pacific, Inc.
RIMANSI Documenter:
Vener Abellera, Operations Manager, CARD MBA Laila Garcia, RIMANSI Organization for Asia
and the Pacific, Inc.
3:30 p.m. - 5:00 p.m.
Microinsurance: Service to the Most Vulnerable Sector of the Society Auditorium Zone C
(continuing session)
Microinsurance refers to insurance systems that offer products designed for the poor. Characteristics include simple
product design, frequent and affordable premium payments, and uniform benefit packages. It aims to provide access to
protection against events that affect the poor’s health and economic well-being. Typical products include life, memorial,
health and property insurance, and investment instruments.
Poor households, including most microfinance clients, are barely able to meet a balanced budget. Without any substantial
wealth, they are just managing their daily cash flows. Lacking of any financial safety net, the poor are very vulnerable to
financial impact of fortuitous events such as death, sickness, disease, disability and natural or man-made disasters.
Resource speakers: Facilitator:
Josie Ric Bantug, Synergy & Joseph Alaban, RIMANSI Organization for Asia and the
Membership Campaign Head, RBT MBA Pacific, Inc.
Areli Vega, General Manager, Documenter:
ASKI MBA Laila Garcia, RIMANSI Organization for Asia and the
Pacific , Inc.
Expanding Access of the Poor to Risk Protection through
Micro-insurance
Expanding of the Poor to Risk Protection through Micro-insurance Access
• Working definition of micro-insurance
• The opportunity: the enterprising poor are willing and able to participate in
micro-insurance programs. They also need risk protection.
• The business advantage: existing channels to the poor that can be

harnessed for low cost transactions, risk management and education
• Micro-insurance as a strategic option: opportunity + institutional

strengths
• Micro-insurance options
• Making the strategy happen: mobilization, capacity building and

creating a favorable policy environment
• RIMANSI as business development support provider

Expanding Access of the Poor to Risk Protection through Micro-insurance
1. Definition
Micro-insurance is a financial product/service that the poor need and are willing
and able to pay for so that they are able to manage their risks better.
IMC 9-2006:
The term “micro-insurance” shall refer to the insurance business activity

of providing specific insurance products that meet the needs of the
disadvantaged for risk protection and relief against distress or
misfortune.
Measurement challenges:
who is poor
need, willingness and ability to pay
risk = the probable loss arising from a financially de-stabilizing or catastrophic
event
Expanding Access of the Poor to Risk Protection through Micro-
insurance
IMC 9-2006:
A “micro-insurance product” is an insurance policy whereby:
The amount of premium computed on a daily basis does not exceed ten
percent (10%) of the current daily minimum wage rate for non-agricultural
workers in Metro Manila; and
The maximum amount of life insurance coverage is not more than five
hundred (500) times the daily minimum wage rate for non-agricultural
workers in Metro Manila.
Implications of the definition:
¾ simple product design that clearly identifies the face amount, benefits
and terms of the insurance uniformly applied to the clients;
¾ low amount of premium/contribution;
¾ policy contract is easily understood by the client/member;
¾ straightforward and uncomplicated documentation requirements;
¾ frequent collection of premium/contribution that coincides with the

cash-flow of the insured;
¾ fast and timely payment of insurance claims

Why micro-insurance?
Poor households, including most microfinance clients, are barely

able to balance financial flows, i.e., cash inflows and outflows
Unpredictable catastrophic events (e.g., death, sickness, disease

and disability in the family, natural and man made disasters) often
push poor families over the edge of financial viability
Serious social, political and moral consequences result from

financial crises (loss of business, malnutrition, school drop out, civil
unrest, entry into the underworld of crime, drug addiction and sexual
exploitation)
Children and women are the most vulnerable to these consequences

Micro-insurance: Issues, Challenges and Policy Reforms
(Llanto, Almario and Gamboa).
Typology of Informal Workers

U rb a n
I II
U r b a n M ic r o - U rb a n
E n tre p re n e u rs W o rk e rs
S e lf W age
E m p lo y e d E a rn er
III IV
S m a ll F a r m e r s L a n d le s s
F is h e r s R u ra l
R u r a l M ic r o - W o rk e rs &
E n tre p re n e u rs F is h w o r k e r s
R u ra l
Risks faced by the poor/informal
sector
¾ Given the location and nature of their work, there
are various work-related risks, which have a
direct bearing on their social protection needs.
¾ Common risks include poor work facilities,
unsanitary and cluttered surroundings, sudden
changes in season or climate, calamities, pest
infestations, chemical poisoning, and
environmental risks.
¾ Predictable risks pertain to risks
associated with life cycle events such as
pregnancy, birth, retirement or old age.
Also known as life-cycle needs, these
erode the financial net worth of
households. In contrast, unpredictable
risks are associated with illness, injury,
death of a family member, natural and
man-made calamities, and theft.
¾ Idiosyncratic (individual) risks
¾ Covariate risks- affect a large number of
households, which can be entire
communities or regions within a country or
countries. Examples: health epidemics,
environmental calamities
Impact on the poor
¾ The more unpredictable the risk, the more
havoc it wreaks on the economic situation
of a poor household.
¾ Thus, the poor are less likely to take
advantage of growth opportunities when
exposed to greater risks and uncertainty.
¾ Due to increased risks and decreased ability to
manage risks, many poor and near-poor
households express anxiety about their
perceived “vulnerability”.
¾ The degree of vulnerability depends on the
characteristics of the risk, the household’s ability
to respond to risk (which, in turn, depends on the
household’s asset base), and time horizon.
The most at risk
¾ Within the informal sector, women and children
are the most disadvantaged, hence, face greater
risks.
¾ Women, comprising 35% of the informal sector,
work for lesser paid hours than men and at the
same time work longer hours in unpaid work
(household chores).
¾ Children are subjected to long working hours
(sometimes unpaid) and exposed to unhealthy
environment and workplace hazards.
Coping mechanisms
¾ Traditional attitude of fatalism
¾ Indigenous social protection schemes, e.g.
paluwagan
¾ Institutional insurance schemes, e.g.,
those organized by the state– GSIS, SSS,
and by commercial insurers
¾ Micro-insurance schemes
Demand for micro-insurance
¾ In general, the level of wealth, the
probability of the occurrence of risk, the
severity of loss due to the occurrence of
risk, and the insurance premium determine
the demand for insurance of an individual
¾ However, in the case of the economically
disadvantaged segment in our society,
other demand factors – perhaps more
compelling than the determinants outlined
above – come into play.
Other demand factors
¾ Understanding what insurance is
¾ Trusting the insurer
¾ Affordability
¾ Availability of other risk management
options, e.g., savings, credit
Commercial insurance and the
poor
¾ The price of insurance that is affordable to
the poor is less than the cost at which
commercial insurers are willing to supply
insurance. Hence, demand may be
substantially lower than anticipated.
How can we help the poor integrate risk management into their financial
management options and practices?
+ Micro-insurance services
+ Financial literacy
+ Education
+ Financial intermediation
The business case for MFI’s to facilitate the provision of more formal
insurance services to the poor
Strategic options
opportunity differentiators
The opportunity:
the enterprising poor are willing and able to participate in micro-

insurance programs
Market research in the Philippines (March, 2005 to April, 2008)
• Northern Luzon, 2005

• Northern Mindanao – 2005, 2006, 2007
• Southern Luzon – 2006, 2008
• Metro Manila - 2005
• Central Visayas – 2006
• Cambodia – 2006
• Vietnam – 2007
• Indonesia – 2008
General Findings:
+ microfinance clients practice risk protection through informal

means. Both group and individual measures.
+ microfinance clients can be made to understand the concept of

formal micro-insurance
+ general willingness to contribute esp. if managed by MFI

partners
+ 70% to 90% definite about participating in possible micro-

insurance program
The business advantage:
existing channels to the poor that can be harnessed for low cost
transactions and education
Existing microfinance distribution channels may translate into

more efficient micro-insurance operations. Overheads of 15%
to 20% possible
The business advantage:

existing channels to the poor that can be harnessed for low cost
transactions and education
Regular interaction with clients may translate into:
+ Better knowledge of demand patterns

+ Better design of insurance products
+ Better control of collection and claims
Better ability to get around the barriers to entry:
Premium collection
Fraud
Moral hazard
Adverse selection
Co-Variant Risks
Micro-insurance as a strategic business option:
opportunity + institutional strengths
Business Differentiators
Opportunities
¾ client responsiveness
¾ an “invisible sector” to the
¾ efficient communication,
insurance industry
control and service distribution
channel
Micro-insurance options
+ informal and in-house schemes

+ partners agent relationships with
commercial insurers
+ mutual benefit associations
Options: In-house micro-insurance
Plus Minus
¾ Lower costs passed on to ¾ Small scale

members
¾ Fund management risk
¾ May be the only choice of
¾ Regulatory risk
members
Options: MFI as agent
Plus Minus
¾ Commissions earned ¾ Client perceptions re:

commissions
¾ Much simpler
¾ Potential conflict of interest in
¾ Less risk claims settlement
¾ Performance risk
¾ Less responsive than other
approaches
Options: Mutual Benefit Associations
Plus Minus
¾ Customized products ¾ Business risk

¾ Responsiveness to members ¾ Insurance risk
¾ Performance risk
¾ Good leverage of synergies
with MFI
Mutual Benefit Associations as Micro-insurance Providers
How are mutual associations recognized in the

Philippines?
The insurance code under Sec 391 recognizes a mutual

benefit association as “… any society, association or
corporation without capital stock, formed or organized
not for profit but mainly for the purpose of paying sick
benefits to members, or furnishing financial support to
members while out of employment, or of paying to
relatives of deceased members …..”
Making the MBA option happen:
1. Mobilization
2. Operational effectiveness and efficiency
3. Policy Advocacy
1. Making it happen: Mobilization
Needs assessment
Interim staffing
Market research
Actuarial analysis
Business planning
Operations training
Systems installation
PMES/MES
MBA Coordinator selection and training
Board election and training
Completion of registration process
2. Making it happen: Achieve sustainability through effective and

efficient performance in key result areas:
Promotions
Collection of Premiums
Claims Processing and Payment
Record of financial transactions
Record of insurance events (MIS)
Fund management
Governance
Management
Audit
Product and Market Development
Member/Client Satisfaction
3. Making the it happen: Influencing the policy environment
+ set performance standards for the sector
+ generate awareness and compliance with sector standards
+ provide policy incentives and support for good performance
+ ensure a level playing field for MBAs

Regulating Mutual Benefit Associations and Insurance Cooperatives
Insurance Commission issued IMC 9-2006, October 25, 2006
• refers to the insurance business activity of providing specific insurance

products that meet the needs of the disadvantaged for risk protection and
relief against distress or misfortune
• premium computed on a daily basis does not exceed ten percent (10%) of the
current daily minimum wage rate for non-agricultural workers in Metro Manila
(P313.00-P350.00 from DOLE website); and
• maximum amount of life insurance coverage is not more than five hundred (500)
times the daily minimum wage rate for non-agricultural workers in Metro Manila.
• Initial guaranty fund: P5,000,000.00 (US$ 116,280)

• Every year thereafter, all micro-insurance MBA’s must increase their Guaranty
Fund by an amount equivalent to five percent (5%) of their gross premium
collections until the Guaranty Fund shall reach twelve and a half percent (12.5%) of
the required capital for domestic life insurance companies.
RIMANSI as business development support provider
Value Added:
Catalyst to facilitate and support efforts of MFIs/MBAs to provide

better access by the poor to micro-insurance products and
services
Mechanism for risk pooling and cost sharing
Forum for performance based monitoring and evaluation
Advocate for policy reform

PHILIPPINES
- 6 licensed MBA partners
- 5 with MBA partnership
- 4 in the pipeline
Mission Statement
We are a resource center than develops and offers risk

management solutions to mutual benefit associations in order to
strengthen their capacity to provide risk protection services on a
sustainable basis.
Business Objectives
1. Assist the partner-MFIs establish their own MBAs.

2. Design and formulate appropriate micro insurance products for the
poor.
3. Formulate and promote Performance Standards aligned with
international best practices.
4. Promote mutual assistance and sharing of resources,
technology and information among stakeholder.
5. Build the financial infrastructure for micro-insurance through
research, education and policy advocacy.
Services
Package 1:
¾ Market research
¾ Where applicable, conversion of in-house insurance programs into formal
and professionally run MBAs.
¾ business planning.
¾ Registration with the SEC and Insurance Commission (IC) and obtain license
to operate from I.C.
¾ Conduct of actuarial study.
¾ Installation of simple MIS
¾ Assist newly established MBAs during initial two (2) months.
Service Package 2
¾ strategic business planning

¾ new product development (life insurance variants, non-life, health,
education, savings features)
¾ performance monitoring and independent audit
¾ improvement of product features
¾ member satisfaction surveys and service improvement
Service Package 2
¾ upgrade of MIS and accounting systems

¾ monitoring adequacy of actuarial reserves
¾ management training
¾ asset/liability management
¾ management of investment portfolios and actuarial reserves
Elements of Micro-insurance Sector Growth and Development:
Internal Dynamics
Market – member satisfaction
Balanced
sector
growth
Competence of
managers and Policy and
professionals Regulation
Passion of social entrepreneurs/

leaders
CARD
MBA
Why Microinsurance ?
MICROINSURANCE is another WEAPON

CARD Mutual Benefit Association, Inc.
for poverty alleviation.

MICROINSURANCE is a SAFETY NET
for micro-entrepreneurs.
MICROINSURANCE complements the
microfinance operations
Some commercial insurance companies are biased
to micro-entrepreneurs because of the
size of THEIR BUSINESS.
“ If the goal of microfinance is putting money in people’s pocket,

the goal of microinsurance is putting
tranquility in people’s hearts at time of crisis ”
AM Dimaculangan
CARD Mutual Benefit Association, Inc. Why Microinsurance?
INCOME
FROM
H E
MICROCREDIT T
A K
E
BR
AN T Y
E C
V ER
N C O
A F P
U R O
I NS CLE
R O Y
C C
MI
FUNERAL
HOSPITAL DEATH
MEDICAL SICKNESS
EXPENSES DISABILITY
CYCLE OFFROM
INCOME POVERTY CAUSED BY
MICROCREDIT MISFORTUNE
REMAINS !!!
CARD Mutual Benefit Association, Inc. Our Value Proposition ……
“ TODO-TODONG BENEPISYO
AT PAGLAKI NG PONDO
AY KAYANG-KAYA
KUNG TAYO AY SAMA-SAMA”
TRANSLATION:
Giving all types of benefit to the members and increasing the fund …
can easily be done if we work and stay together….
Products and Services…
PRODUCTS & SERVICES
1. LIFE INSURANCE PROGRAM with the following features:

1.1. Accidental Death
1.2. Total & Permanent Disability
1.3. Motor Vehicle Accidental Hospitalization (MVAH) benefit
1.4. Refund of Contributions
2. RETIREMENT SAVINGS FUND with special feature of contribution

refund
3. ALL LOANS INSURANCE PACKAGE with Automatic Loan
Offsetting After Disability (Auto-LOAD)
4. REFUND OF CONTRIBUTION
NON-FINANCIAL SERVICES
1. Mass Wedding
2. CARD Disaster Relief Assistance Program
3. Credit Bureau
STANDARD OPERATING
PROCEDURES OF RUNNING A
MICROINSURANCE
SCHEME
(CARD MBA Context)
Cape Town, South Africa (05-06-07)

CARD MBA’s SOP …
APPLICATION FOR MEMBERSHIP

PAYMENT OF WEEKLY CONTRIBUTION
ISSUANCE OF MEMBERSHIP CERTIFICATE
RESIGNATION / DEATH / TPD

TERMINATION RETIREMENT
REFUND OF PAYMENT OF PAYMENT OF

CONTRIBUTION DEATH / TPD RETIREMENT
(WITH 3 YEARS OF
CONTINUOUS MEMBERSHIP) CLAIMS BENEFIT
CARD Mutual Benefit Association, Inc. Claims Settlement …
1-3-5-day Target in Claim’s Settlement
1
Within 24 hours
upon notification,
claim for indemnity
must be settled if
3 the dead body is not
5
Within three days yet buried at the
upon notification & time of validation.
with complete Within five days
documents, claim upon notification,
for indemnity must difficult claims will
be settled if the dead be given action with
body is already finality.
buried at the time of
validation.
BOAT
PROGRAM
CARD Mutual Benefit Association, Inc. Build Operate And Transfer Program
1. Are you willing to provide microinsurance products

to your members ? YES
2. Do you have Php 5 million for guarantee fund? NONE
3. Do you have the capacity to run your own micro-

insurance program? NONE
Get into the BOAT of CARD MBA…

Build Operate And Transfer Program
VALUE PROPOSITIONS of the BOAT PROGRAM

1. MEMBERSHIP
The members of BOAT Partner will be members of CARD
MBA enjoying the same benefits that of CARD members.
2. PERIOD OF ENGAGEMENT: THREE YEARS

During the 3-year period, there will be technical assistance
and transfer of technology in the management of a mutual
benefit association.
3. DISENGAGEMENT
After three (3) years, all those entitled for the refund of
contribution will be turned over to the BOAT partner’s own
MBA together with their refund of contribution to become
their seed capital.
The BOAT
The BOAT Framework
Framework
TRAINING of the
ASSESSMENT &
MONITORING PARTNERSHIP MANAGEMENT TEAM
and MOA SIGNING
ASSESSMENT OF FINALIZATION of
CARD MBA BRANCH & CENTER IMPLEMENTING
PRESENTATION ACTIVITIES RULES
DEVELOPMENT of
WORK PLAN and
IMPLEMENTING RULES
PRO-FORMA MOA
and FINALIZATION
REVIEW of MOA
MRI
“Get into the BOAT of CARD MBA” CARD MBA “Get into the BOAT of CARD MBA”
E.Z.
FOUNDATION USWAG
(BANCO NG
MASA)
KFI QUIDAN – PI
THE BOAT PARTNERS

“Assisting people in coping with uncertainties…”
CaMIA…
1. Established in June 15, 2007 and was registered

CARD MRI Insurance Agency
with Securities and Exchange Commission on

August 2, 2007 with its own separate Board of
Directors.
2. The main objectives of the Agency are:
# To conceptualize microinsurance products
as needed by the members of CARD MRI
and its affiliates.
# To serve the identified insurance needs of
CARD MRI and its affiliates thru partnership
with various insurance companies.
CaMIA PAID Plan…
CaMIA Packaged Assistance In case of Disaster Plan

(CaMIA PAID Plan)
“If misfortune befell upon you, consider your claim PAID”
3-in-1
Insurance Package
CaMIA PAID Plan…
Benefit 1
PERSONAL ACCIDENT up to Php 100,000.00

AMOUNT OF
IF ACCIDENT RESULTED TO BENEFIT
Death Php 100,000.00
Loss of both hands or both feet Php 100,000.00

or sight of both eyes
Loss of one hand and sight of one eye Php 100,000.00
Loss of one foot and sight of one eye Php 100,000.00
Loss of one hand and one foot Php 100,000.00
Loss of one hand OR one foot Php 50,000.00
Loss of sight of one eye Php 50,000.00

CaMIA PAID Plan…
Benefit 2
FUNERAL BENEFIT of Php 20,000.00
NUMBER OF
AMOUNT OF
CONTINUOUS YEARS CAUSE OF DEATH
BENEFIT
INSURED
Pre-existing condition NONE
LESS THAN Suicide NONE

ONE YEAR Accident Php 20,000.00
Sickness (not pre-existing) Php 20,000.00
Suicide NONE
ONE YEAR BUT LESS Php 20,000.00
Accident
THAN TWO YEARS
Sickness Php 20,000.00
Suicide Php 20,000.00
TWO YEARS
Accident Php 20,000.00
AND ABOVE
Sickness Php 20,000.00
CaMIA PAID Plan…
Benefit 3
RESIDENTIAL HOUSE RECONSTRUCTION

START-UP CAPITAL up to Php 10,000.00
CAUSE OF DAMAGE AMOUNT OF BENEFIT
Depends on the percent of

FIRE damage but not more than
Php 10,000.00
Natural Calamities such as Depends on the percent of

FLOOD, EARTHQUAKE, damage but not more than
TYPHOON and Php 10,000.00
VOLCANIC ERUPTION with Php 500.00 deductible
Sample of CaMIA PAID Plan
Certificate of Coverage
- This portion will be given to
the insured as proof of
payment and coverage
Return Stub
- This portion will be returned
to CaMIA/CARD MBA upon
completion
Coverage of the PAID Plan
Annual Premium: Php 250.00

Period of Coverage: One (1) Year
(renewable yearly)
Eligibility: 18 to 60 years old

Effectivity:
9 The Certificate of Coverage (CoC) should
be completely filled-out together with the
signature of the insured.
9 The CoC will take effect upon submission
of the Return Stub to the CaMIA Head
Office or to the nearest CARD MBA
Provincial Office.
CARD MRI Insurance Agency Operations Update as of May 31, 2008
2007-08 2008 TOTAL

PARTICULARS Beg. balance (April - May) Year to Date
No. of Plan Sold 5,249 6,583 11,832
Gross Premiums 1,312,250.00 1,645,750.00 2,958,000.00
Commission:
PAID Plan 65,888.75 193,170.91 259,059.66
Total Assets 800,801.07 1,608,306.35 1,608,306.35
Net Income (Loss) 126, 405.68 238,392.09 364,797.77

No. of Claim 3 78 81
Amount of Claim 190,000.00 285,800.00 475,800.00
History and Institutional Background
A short glimpse on the history of Rural Bank of Talisayan will

enable us to understand RBT-Mutual Benefit Association
beginnings.
It was during the 1965 Christmas party at the municipal hall of
Talisayan, attended by local officials and some guests from Manila
when the late Reserved Colonel Alejandro Go Beltran Sr. asked the
town mayor on how he can be of help to the people of Talisayan. The
town mayor candidly and quickly replied, “ Why not establish a rural
bank?” Fortunately, during that time, the Central Bank of the
Philippines was promoting a new banking system in order to develop
the countryside wherein each town must have its own bank. By
March 10 of the following year, the said aspiration of the town mayor
became a reality; “Rural Bank of Talisayan” was established.
Since its inception, the bank’s priority is the upliftment of the quality
of life of the less privileged sector of the society. It aims to empower
people from all walks of life. It initially directed its focus on providing
financial assistance to the coconut farmers and fisher folks. The
bank struggled and survived economic difficulties during the dark
days of the Philippines.
BRIEF HISTORY OF RBT
“The best way to predict the future is to INVENT it”
1 SUSTAINING STAGE
(1966-1975)
The main concern was on sustaining the operations
with only 2.7 million assets and reaching out to the
target communities. The founders braved all
unfavorable conditions just to bring the good news to
the needy people.
2 SURVIVAL STAGE
(1976-1985)
This decade marked the dark years of our country’s
history. With Martial Law in enforcement and with an
economy that was not promising, the bank steadily
continued to be resilient bringing in more assets to 6.6
million.
3 INNOVATIVE STAGE
(1986-1995)
The rural banking system continued to
survive and introduced more innovations in
products and services. Assets reach 23 M
and Loan portfolio of 17.5 M
4 EXPANSION STAGE
(1996-2005)
It is in this stage that RBT expanded its operations as
evidenced by the branches that were set up in Jasaan
and Salay, all in Misamis Oriental. The current assets
have reached to 158 million, total loan portfolio of
111 M and has a workforce of more than 108
personnel as of December 2004.
EXPANSION STAGE
4 (1996-2005)
From the traditional agricultural lending assistance to
farmers, fisher folks, and employees of government
and private sectors, RBT ventured into microfinance
banking in 1998 extending loans to small and micro
entrepreneurs particularly, women in partnership
with the PCFC. It replicates the Grameen banking
approach coupled with MABS technical assistance
for individual lending.
5 QUANTUM LEAP STAGE

(2006-2015)
The era of modern management using the information
technology, opened the gates to global market
thereby creating a borderless economy. The issue of
bigness and diversification is our greatest challenge
for our survival.
MSO COORDINATING FUNCTION
Cooperation is
Christianity in
RBT Action
BANK
Towards one
VISION
To make its member
RBT organizations top players
AGB
MBA
MSO in each’ own field,
providing the needed
products & services to
clients and members for
the wholistic upliftment of
RBT the community through a
COOP unified and cohesive
operation.
RBT-Mutual Benefit Association
Milestones
January 2, 2006 – Launching of RBT-Mutual
Benefit Association
July 5, 2006 – RBT-MBA was officially registered
with the SEC.
September 16, 2006 – RBT-MBA was License by
the Insurance Commission.
March 10, 2007 – RBT-MBA 1st Annual General
Assembly.
August 2007 – RBT-MBA reached the 10,000
members.
RBT – MUTUAL BENEFIT
ASSOCIATION, INC.
Report on Membership and Claims for the year

2006 to June 2008
“To deliver quality micro insurance products and services to in need Filipino families”
VISION
To deliver quality Microinsurance Products and Services
to in need Filipino Families.
MISSION
“ A top Microinsurance provider in the Philippines”
18000
15400
16000
14000 12490
12000
10000
8000 6723
6000
4000
2000
0
2006 2007 2008

CLAIMS PAID ON LIFE INSURANCE
(in thousand Php)
350,000.00 329,000.00
300,000.00
224,000.00
250,000.00
200,000.00
150,000.00
100,000.00 70,500.00
50,000.00
0.00
2006 2007 2008

NUMBER OF CLAIMS ON LIFE INSURANCE
2006
1 2
Member Spouse Children

2007
5
6
28

as of June 2008
5
5
17

CLAIMS PAID ON MEDICAL REIMBURSEMENT
(in thousand Php)
350,000.00
289,424.90
300,000.00
250,000.00
176,208.00
200,000.00
150,000.00
103,359.00
100,000.00
50,000.00
0.00
2006 2007 2008

NUMBER OF CLAIMS ON MEDICAL
REIMBURSEMENT 2006
23
64
17

NUMBER OF CLAIMS ON MEDICAL
REIMBURSEMENT 2007
79
173
45

NUMBER OF CLAIMS ON MEDICAL REIMBURSEMENT
as of June 2008
67
83
38

Empowering the Poor through
ASKI Mutual Benefit Association
This represents the official logo of Alalay sa
Kaunlaran (ASKI), Inc. wherein
which ASKI MBA was born.
represents Mutual Benefit Association

supporting ASKI’s vision, mission and goals.
The bold letter means strength and
stability as expressed in ASKI MBA’s vision:
“ A highly competitive, reliable, sustainable
mutual benefit association” .
ASKI MBA was established and

registered in 2006
Yellow expresses care
for the welfare of its members
Green represents hope
Blue stands for the official color of ASKI
TEL.NO. (44)463-1246
EMAIL : askimba@aski.com.ph
VISION
A highly competitive, reliable

sustainable mutual benefit
association.
TEL.NO. (44)463-1246
MISSION
To provide a comprehensive
microinsurance program for
the security of members.
TEL.NO. (44)463-1246
GOALS & OBJECTIVES
¾To promote the welfare of the poor;
¾To extend financial assistance to its

members in the form of death benefits,
medical subsidy, pension and loan
redemption assistance;
TEL.NO. (44)463-1246
GOALS & OBJECTIVES
¾To ensure continued access to
benefits/resources by actively involving
the members in the direct management
of the association that will include
implementation of policies and
procedures geared towards
sustainability and improved services.
TEL.NO. (44)463-1246
SEC Registration
¾Registered with the Securities
and Exchange Commission
(SEC)
¾ Reg. No. CN200606766
¾ June 21, 2006
TEL.NO. (44)463-1246
Licensed with IC
¾Licensed under the Insurance
Commission (IC)
¾No. 2008-13-R
TEL.NO. (44)463-1246
Operations
¾Pilot operations – December 1, 2006
(Covering 1 ASKI Branch)
¾Full operations – January 1, 2007
¾ASKI Branches covered – 9 branches
TEL.NO. (44)463-1246
Why Microinsurance?
Why Mutual Benefit Association?
TEL.NO. (44)463-1246
CRGF
¾ In 1995, seeing clients’ needs in times of
sickness, ASKI, through its Credit Risk
Guarantee Fund (CRGF), started giving
financial assistance to its clients for their
hospitalization and medical expenses
¾ Php500 (US$10) - Php1,000 (US$20)
TEL.NO. (44)463-1246
MAF Program
¾ Mutual Aid Fund Program introduced in
1999
¾ Recognizing that CRGF financial assistance
is not sufficient as a response to the
difficulties encountered by the clients and
their families in time of death and/or serious
illness
¾ In order to mitigate the risk of accounts
becoming uncollectible due to death and
disability
TEL.NO. (44)463-1246
MAF Program
¾Benefits:
¾Death of Member – Php120,000 (US$3,000 )
¾Death of Spouse/Child – Php60,000
(US$1,500 )
TEL.NO. (44)463-1246
MAF Program Facing Risk
¾ The MAF Program, however, though was
able to lessen the credit risk of the
Organization and improve client serve
was faced with another risk
¾ … the risk of exhausting its program fund
and not being able to pay for the benefits
due to its clients
TEL.NO. (44)463-1246
MAF Program Facing Risk
¾ MAF program did not undergo formal
actuarial study
¾ MAF program does not have a guaranty
fund that will ensure payment of benefits
TEL.NO. (44)463-1246
New MAF Program
¾ Thus, in 2000, ASKI, recognized for its
“microfinance plus” programs introduced
the New MAF under the group life
insurance with an external commercial
insurance provider
¾ The New MAF was intended as a transitory
program
…for the Mutual Benefit Association
TEL.NO. (44)463-1246
ASKI MBA
¾In 2005,
¾ ASKI, as an incorporator, joined other
microfinance institutions (MFIs) in
organizing RIMANSI
¾RIMANSI through the support of CARD
MBA and CCA, conducted an actuarial
study on the potentials of ASKI MBA
¾ In 2006, ASKI MBA was born.
TEL.NO. (44)463-1246
ASKI’s Triple Bottom Line
¾ Having an MBA was a move to attain the
triple bottom line, that is
outreac
viability
h
transformatio
n
TEL.NO. (44)463-1246
Outreach
¾ Affordable premium attracts more
clients/cater to the unserved portion of
the poor
¾ As of June 30, 2008
¾ Members – 19,140
¾ Insured members of the family
- 76,000 (approx.)
TEL.NO. (44)463-1246
Affordable premium contributions
Membership fees
“One-time”
Php 300 (US$7.50)
Weekly contribution
Php 30 (US$0.75)
TEL.NO. (44)463-1246
Viability
¾ Viability ensured…
¾undergone actuarial study
¾regulated by the Insurance Commission (IC)
¾Guaranty fund deposited at IC
TEL.NO. (44)463-1246
Highlights of Operations
Revenues and expenses
14.0
.6
11
12.0
Underwriting
10.0 income
Underwriting
8.0 expense
1
7.
1 Operating
6.
6.0 expenses
Net income
1
8
7
4.
3.
3.
4.0
3
9
1
2.
1.
2.
5
2.0 1
1.
5 1.
0.
0.0
JUNE 2007 DEC 2007 JUNE 2008
TEL.NO. (44)463-1246
Highlights of Operations
16.0
Financial Position
.7
13
14.0
12.0
Assets
10.0
2
6
8.
8.
8.0 Liabilities
4
5.
5
6.0
5.
Members Equity
4.0
2
3.
2.0
0.0
DEC 2007 JUNE 2008
TEL.NO. (44)463-1246
Transformation
¾ Products designed to cater to the needs of
the clients based on a survey and actuarial
study
¾ Benefits acts as a safety net for the clients
and their families in time of loss
TEL.NO. (44)463-1246
Transformation
¾Income flows back to members in
form of improved benefit package
ASKI MBA
Benefits
TEL.NO. (44)463-1246
Attractive Benefit Package
ASKI MBA ASKI MBA
Member ASKI MBA

Spouse 3 legitimate
- Death & TPD
Php 120,000 – Death children
(US$ 3,000) Php 20,000 - death
(US$ 500) Php 10,000
Equity Refund = 50% of total premium contributions
TEL.NO. (44)463-1246
Transformation
¾ Income flows back to members in form of
capacity building
Microinsurance Lakbay Aral (Exposure

Training– CARD MBA
TEL.NO. (44)463-1246
Microinsurance Forum
MBA Coordinators Training
TEL.NO. (44)463-1246
Transformation
¾ Clients own and manage the MBA (clients in
ASKI MBA Board of Trustees)
TEL.NO. (44)463-1246
Transformation
Empowerment of the poor
¾ ASKI MBA Board of Trustees trained on board
governance, leadership, microinsurance
operations
¾ Clients equipped and can participate in the policy
and decision-making of their own MBA
¾ Clients elected as MBA Coordinators
¾ Clients contribute something to the community by
ensuring a well-managed and client-sensitive
microinsurance program.
¾ Thus, we can say that ASKI MBA truly is a venue to
empower the poor.
TEL.NO. (44)463-1246
Main Strategy-MOA with ASKI
¾ASKI as Advisory
¾Management services
¾ASKI as marketing & collection
agent
TEL.NO. (44)463-1246
Joys
First year of operation
¾ Setting-up of operational policies and
procedures
¾ Initial design and pilot-testing of automated
MIS
¾ Support from partners – ASKI and RIMANSI
¾ Attaining positive result of operations in the
first year
TEL.NO. (44)463-1246
Challenges and Current
Initiatives
¾Increasing guaranty fund
¾Finalization and installation of MIS
¾Expansion of program
TEL.NO. (44)463-1246
Thank you!
ASKI MBA 2007
Edited by Foxit PDF Editor
Copyright (c) by Foxit Software Company, 2004 - 2007
For Evaluation Only.

Micro Insurance Compilation

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POWERING

CONCURRENT WORKSHOP SESSIONS

1:30 p.m. - 3:00 p.m.

3:30 p.m. - 5:00 p.m.

• Working definition of micro-insurance

• The business advantage: existing channels to the poor that can be

• Micro-insurance as a strategic option: opportunity + institutional

• Making the strategy happen: mobilization, capacity building and

• RIMANSI as business development support provider

The term “micro-insurance” shall refer to the insurance business activity

A “micro-insurance product” is an insurance policy whereby:

Implications of the definition:

¾ low amount of premium/contribution;

¾ policy contract is easily understood by the client/member;

¾ straightforward and uncomplicated documentation requirements;

¾ frequent collection of premium/contribution that coincides with the

¾ fast and timely payment of insurance claims

Poor households, including most microfinance clients, are barely

Unpredictable catastrophic events (e.g., death, sickness, disease

Serious social, political and moral consequences result from

Children and women are the most vulnerable to these consequences

Typology of Informal Workers

the enterprising poor are willing and able to participate in micro-

Market research in the Philippines (March, 2005 to April, 2008)

• Northern Luzon, 2005

+ microfinance clients practice risk protection through informal

+ microfinance clients can be made to understand the concept of

+ general willingness to contribute esp. if managed by MFI

+ 70% to 90% definite about participating in possible micro-

The business advantage:

Existing microfinance distribution channels may translate into

The business advantage:

Regular interaction with clients may translate into:

+ Better knowledge of demand patterns

Better ability to get around the barriers to entry:

Micro-insurance as a strategic business option:

opportunity + institutional strengths

+ informal and in-house schemes

Options: In-house micro-insurance

¾ Lower costs passed on to ¾ Small scale

Options: MFI as agent

¾ Commissions earned ¾ Client perceptions re:

Options: Mutual Benefit Associations

¾ Customized products ¾ Business risk

How are mutual associations recognized in the

The insurance code under Sec 391 recognizes a mutual

Making the MBA option happen:

1. Making it happen: Mobilization

2. Making it happen: Achieve sustainability through effective and

3. Making the it happen: Influencing the policy environment

+ set performance standards for the sector

+ generate awareness and compliance with sector standards

+ provide policy incentives and support for good performance

+ ensure a level playing field for MBAs

Insurance Commission issued IMC 9-2006, October 25, 2006

• refers to the insurance business activity of providing specific insurance

• Initial guaranty fund: P5,000,000.00 (US$ 116,280)

RIMANSI as business development support provider

Catalyst to facilitate and support efforts of MFIs/MBAs to provide

Mechanism for risk pooling and cost sharing

Forum for performance based monitoring and evaluation

Advocate for policy reform

- 5 with MBA partnership