Microenterprise Access to Banking Services

Microinsurance for Microenterprise Clients of Rural Banks

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Rural Banks best positioned for microinsurance distribution in the countryside

Rural bank clients and their families are most vulnerable to risks and yet appropriate insurance coverage is often unavailable.  Financial shocks, like the loss of an income earner due to death or disability, place client households deeper into poverty as they resort to drastic measures (e.g. selling productive assets, suspending children’s education, etc.) to cope with the losses.

Recognizing this, the Rural Bankers Association of the Philippines Microenterprise Access to Banking Services (MABS) Program sought to assist rural banks to expand their microfinance services by promoting access to quality insurance products offered by licensed (and regulated) insurers who can effectively provide for secure protection for rural bank clients and their households. Known as the partner-agent model, this is seen to be more efficient and more beneficial to the banks, since it is the insurer and not the bank that bears the risk. By facilitating linkages among rural banks (as delivery channels) and commercial insurance providers (as risk carriers), effective delivery of microinsurance products is ensured.  New financial services are also expanded and new revenue streams are added for the banks.

Almost all microenterprise borrowers of rural banks are currently covered with Mortgage Redemption Insurance (MRI) or Credit Life that guarantees their loans.  However, MABS field studies reveal that these clients demand more than just loan insurance.  The RBAP MABS Program microinsurance initiative therefore looks into enhancing rural banks’ insurance services in order to meet the demand for reasonable insurance for their clients and their families.

With over 800,000 microenterprise borrowers and more than 6,000,000 deposit accounts, rural banks are the best-positioned institutions to facilitate formal microinsurance services in the countryside.  Microinsurance provides rural banks an opportunity to expand the bank’s range of financial services from which they can generate additional revenues.  More importantly, microinsurance services respond to the need of rural bank clients and his/her family for risk protection.  With this comes the potential for high client satisfaction and customer loyalty.  In a nutshell, better financial services leads to happier and more loyal rural bank clients.

Survey says …

In times of unexpected illness or hospitalization, clients were forced to:

10% – Use money intended for Loan Payments
20% – Borrow money
35% – Use the income from their business
44% – Use their Savings

Enhanced Microinsurance services include:

1. Life Insurance
   Not limited to credit guarantee but will include coverage for the household in case of death of the bank client as well as other family members
2. Accidental Death and Dismemberment (AD&D)
   May be designed as a rider of the Credit Life Insurance, providing protection against sudden loss of income for the client and his/her family
3. Hospitalization Insurance
   Key to marketability will be simplicity of the package, affordability and coverage for the bank client and his/her family members
4. Property / Assets Insurance (for further study)
   Package should provide for financial protection against the loss of or damage to real and personal property caused by perils as fire, theft, natural catastrophes, etc.

Key Product Features of Microinsurance:

1. Affordability
   Low premiums and ease of payments
2. Reasonable Coverage
   For bank clients and riders for spouse and dependents
3. Simplicity
   Easily understandable contract and quick claim settlement

Benefits of Microinsurance to Rural Banks

1. Secure client loyalty
   Prove to your clients that you care for their protection and financial security
2. Acquire New Clients
   Differentiate your bank from the competition with affordable and unique insurance products and services
3. Strengthen your image in the community
   Enhance trust and reliability by partnering with the strongest and most innovative leaders in the insurance industry
4. Increase your bank’s profitability
   Generate income through service fees for the facilitation of insurance applications, collection of premium payments, assistance on client’s claims and the dissemination of product information

Life Insurance

Provider: Philippine American Life (PhilAm)
Type: Credit Life (with optional AD&D, TPD and Critical Illness riders)
Contact Person: Justine G. Daguman (Corporate Account Officer – Group and Credit Insurance)
Landline: ( +632 ) 754 3801
Mobile: ( +63905 ) 345 4669

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Provider: Ayala Life Assurance, Inc.
Type: Deposit-based Term Life Insurance
Contact Person: Tessa Calalang (Senior Manager – Integrated Corporate Sales)
Landline: ( +632 ) 753 7210
Mobile: ( +63917 ) 848 7477

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Provider: United Coconut Planters Life Assurance Corp.
Type: Group Yearly Renewable Term   (with AD&D rider)
Contact Person: Eleonore I. Ocampo (Account Executive – Business Dev Dept., Group Marketing Division)
Landline: ( +632 ) 841 9568 / 841 9570
Mobile: ( +62922 ) 865 0592

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Provider: Country Bankers Life Insurance Corp.
Type: Life Insurance    (with AD&D rider plus benefits and coverage for spouse and legal dependents)
Contact Person: Jabbar B. Mendoza (Business Development Supervisor)
Landline: ( +632 ) 523 7151 / 523 8611 to 18
Mobile: ( +63917 ) 520 6355

Non-Life Insurance

Provider: Malayan Insurance Company, Inc.
Type: Credit Insurance    (w/ Hospital Income, Medical Assistance & Educational Assistance benefit for family members)
Contact Person: Mark Vincent Co (Head – Integrated Marketing Communications)
Landline: ( +632 ) 242 8888
Mobile: ( +63922 ) 331 6253

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Provider: Country Bankers Insurance Corp.
Type: Residential Fire Insurance
Contact Person: Louie V. Bautista (Senior Assistant Vice President)
Landline: ( +632 ) 524 0621 to 23 / 524 1886
Mobile: ( +63928 ) 505 1893

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Provider: Assistance Alliance International, Inc. (AA International)
Type: Credit Life with AD&D   (includes coverage for spouse and dependents and medical expense benefits)
Contact Person: Kathy C. Tamayo (President)
Landline: ( +632 ) 813 8080 / 751 0000
Mobile: ( +632917 ) 825 7088

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Provider: CARD MRI Insurance Agency
Type: Term Life    (with AD&D rider + residential reconstruction benefits for losses due to fire or natural calamity)
Contact Person: Vener Abellera (Assistant Manager for Operations)
Landline: (+6349 ) 562 2878
Mobile: ( +63928 ) 594 1085

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Provider: MicroInsurance Agency Philippines
Type: Typhoon Indexed Crop Insurance
Contact Person: William H. Martirez (Country Manager)
Landline: ( +6333 ) 329 0729
Mobile: ( +63920 ) 945 0729