Making insurance work for microfinance institutions : a technical guide to developing and delivering microinsurance / Craig F. Churchill ... [et al.].

Format:

Book

Author/Creator:

Churchill, Craig F.

Language:

English

Subjects (All):

Health insurance policies.

Microfinance.

Physical Description:

xii, 246 p. : col. ill.

Edition:

1st ed.

Place of Publication:

Geneva : International Labour Office, 2003.

Language Note:

English

Summary:

Provides a guide for managers of microfinance institutions (MFIs) on the design and operation of basic insurance products. Introduces fundamental insurance concepts, outlines the prerequisites needed for an MFI and describes the key features of five types of microinsurance products covering life and disability insurance. Explores operational issues involved in managing an insurance product, its control, outsourcing, and pricing.

Contents:

Intro

TABLE OF CONTENTS

ACKNOWLEDGEMENTS

PREFACE

INTRODUCTION

Chapter 1 INSURANCE FUNDAMENTALS

1.1 The Insured Event

1.2 Benefit Design: How Much is Paid to Whom?

1.3 Design Features

1.4 Premiums: Paying for Insurance

1.5 Claims

1.6 Other Considerations

Further Reading on Insurance Fundamentals

Appendix 1

Chapter 2 INSURANCE PREREQUISITES

2.1 Does the MFI have the Capacity to Offer Insurance?

2.2 Is there a Demand for Microinsurance?

2.3 Who Else Offers Insurance and Microinsurance?

2.4 Is it Legal to Offer Microinsurance?

2.5 Data

Further Reading on Insurance Prerequisites

Appendix 2

Chapter 3 FIVE MICROINSURANCE PRODUCTS

3.1 The Life Insurance Spectrum

3.2 The Five Recommended Products

Further Reading on Product Features

Chapter 4 INSURANCE OPERATIONS

4.1 Back Office Operations

4.2 Field Operations

Further Reading on Insurance Operations

Appendix 4

Chapter 5 OUTSOURCING RISK AND RESPONSIBILITY

5.1 Outsourcing the Business to an Insurer

5.2 Outsourcing Risk through Portfolio Insurance

5.3 Outsourcing through a Separate Unit

5.4 Outsourcing Risk through Reinsurance

5.5 Outsourcing by Long-term Contracting of Specific Activities

5.6 Outsourcing Individual Activities to Consultants

5.7 Conclusion

Further Reading on Outsourcing

Appendix 5

Chapter 6 MANAGERIAL CONTROL

6.1 Accounting Transactions

6.2 Financial Management

6.3 Monitoring

Further Reading on Managerial Control

Chapter 7 PRICING

7.1 Experience Rating

7.2 Trends and Changes within the Investigation Period

7.3 Pricing New Products

7.4 Pricing for Other Insurance Benefits

7.5 Conclusion

Glossary

Bibliography

Index

TABLE OF TABLES

Table 0.1 Conditions for Developing Insurance to Cope with Death Risks.

Table 2.1 Microinsurance Activities and Responsibilities

Table 3.1 Diversity and Complexity of Life Insurance Products

Table 3.2 The Five Products

Table 3.3 Waiting Periods for the Five Products

Table 4.1 Determining the Training and Motivational Implications of Insurance

Table 4.2 Techniques for Selling Microinsurance

Table 5.1 Due Diligence Checklist for Identifying an Insurance Partner

Table 5.2 Roles and Responsibilities in Outsourcing the Additional Lives Product

Table 5.3 Strengths and Challenges of Outsourcing the Business

Table 5.4 Strengths and Challenges: Outsourcing to a Separate Unit

Table 5.5 Strengths and Challenges: Outsourcing through Reinsurance

Table 5.6 Strengths and Challenges of Outsourcing through Long-term Contracts

Table 5.7 Strengths and Challenges of Outsourcing to Consultants

Table 5.8 Primary Objectives of the Two Parties

Table 5.9 Financial Information on AIG/FU GPA Insurance

Table 6.1 Transactions with Portfolio Insurance

Table 6.2 Transactions for MFI Agents

Table 6.3 Essential New Accounts for Insurance Activities

Table 6.4 Specialty Transactions for Life Insurance

Table 6.5 Key Ratios for Life Insurance

Table 7.1 MicroBank's Insurance Portfolio Details, 1999

Table 7.2 MicroBank's Premium Data, 1999

Table 7.3 MicroBank's Claims Data, 1999

Table 7.4 MicroBank Insurance Experience, 1999-2000

Table 7.5 ASSA2000 Mortality Rates-South African National Population 2002

Table 7.6 Estimated Risk Premiums for Group Pricing (from ASSA2000)

TABLE OF FIGURES

Figure 2.1 Participation Rate for AIG-FINCA Uganda Group Personal Accident Policy

Figure 2.2 The Number of Insured at SEWA (1992 to 2000)

Figure 3.1 Why Health Insurance is Particularly Risky

Figure 3.2 The Five Recommended Products

Figure 4.1 Back Office Operations at Fireman's Fund.

Figure 5.1 Relative Risk and Administration for Insurance Outsourcing Options

Figure 5.2 The Partner-agent Model

Figure 5.3 Follow the Money: Partner-agent Financial Transactions

Figure 5.4 Sample Proposal Assessment Form

Figure 5.5 AIG/FINCA Uganda Group Personal Accident Insurance

Figure 7.1 MicroBank's Claims Experience for 1999

Figure 7.2 MicroBank's Numbers of Policies 1999

Figure 7.3 Claims Experience for 1999 and 2000

Figure 7.4 Numbers of Policies 1999 and 2000

Figure 7.5 ASSA2000 South African National Mortality Rates (2002 Males and Females)

Figure 7.6 ASSA2000 South African National Mortality Rates (2002 &amp

2005 Males)

Figure 7.7 Normal Population Mean 40, Standard Deviation 7

TABLE OF BOXES

Box 0.1 The Separation of Banking and Insurance

Box 1.1 Underwriting from Lloyd's of London

Box 1.2 Controlling Adverse Selection and Fraud in the Philippines

Box 1.3 Moral Hazard with Life Insurance

Box 1.4 Covariant Risk, Reinsurance and 9/11

Box 1.5 US1,000 Accident Insurance for All Members

Box 1.6 A Comparison of Three Premium Rates

Box 1.7 Sample Elementary Risk Premium Calculation

Box 1.8 Group and Individual Pricing Methodologies: A Comparison

Box 1.9 The Effect of Covariant Risk by Scheme Size

Box 1.10 Experience Rating and the Product Development Cycle

Box 2.1 Are Low-income Persons Familiar with Insurance?

Box 2.2 Savings, Credit or Insurance? Evidence from Zambia

Box 2.3 Regulatory Obstacles to A Life Insurance Partnership

Box 2.4 Dealing with Restrictive Legal Environments

Box 3.1 The Debt Dies with the Debtor

Box 3.2 Short Terms and Separate Policies

Box 3.3 Death by Accident vs. Death by Disease

Box 3.4 Enforcing Age Requirements

Box 3.5 Pricing Problems and the Perils of an Additional Lives Policy-UMASIDA in Tanzania.

Box 3.6 Public Relations Advantages of Changing Exclusion Policies

Box 3.7 AIG/FINCA Uganda-Benefits from the Group Personal Accident Policy

Box 3.8 Premium Collection by MFIs in India

Box 4.1 Human Resources for SEWA's Insurance Services

Box 4.2 R &amp

D Committee and the Product Development Process

Box 4.3 The Need for Client Education and Fraud Prevention in the Philippines

Box 4.4 Statistical Fraud Detection

Box 4.5 The Importance of Selling a Mandatory Insurance Policy-The Case of FINCA Uganda

Box 4.6 Informal Funeral Funds in Zambia

Box 4.7 The Damayan Schemes in the Philippines

Box 4.8 Public Relations Challenges and Opportunities of Microinsurance

Box 5.1 Examples of the Partner-agent Model

Box 5.2 Requiring Clients to Find their own Insurance

Box 5.3 CARD's Dangerous Annuity Product

Box 6.1 Sample Vouchers and Separate Books

Box 7.1 Setting Premiums In Burkina Faso

Box 7.2 The Effect of Credibility on Experience Rating

Box 7.3 Pricing Exercise with Additional Benefit and Continuation Cover.

Notes:

Bibliographic Level Mode of Issuance: Monograph

Includes bibliographical references and index.

ISBN:

92-2-116390-3

9789221163903

OCLC:

769342289