Report International Conference on Inclusive Insurance 2020 Digital Edition - Edited by Zahid Qureshi and Dirk Reinhard
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Report International Conference on Inclusive Insurance 2020 Digital Edition Edited by Zahid Qureshi and Dirk Reinhard
Report International Conference on Inclusive Insurance 2020 — Digital Edition
Conference documents and This report is the summary of the Inter-
presentations are available online: national Conference on Inclusive Insur-
ance — Digital Edition, which took place
from 2 to 6 November 2020. Individual
summaries, in various styles, were
contributed by a team of international
www.inclusiveinsurance.org
rapporteurs. Readers, authors and
organisers might not share all opinions
expressed or agree with the recommen-
dations given. These, however, reflect
the rich diversity of the discussions.
Over 70 speakers participated
in the conference.
Report International Conference on Inclusive Insurance 2020 — Digital Edition 1
Contents
1 Contents 31 Agenda 61 A
genda
2 Foreword Day 3—4 November 2020 Day 5—6 November 2020
3 Acknowledgements How to reach scale and develop Lessons learnt and next steps
4 Participant overview inclusive insurance markets
62 Session 16
5 genda
A 32 Session 8 Technology driving
Day 1—2 November 2020 Integrated risk inclusive insurance
Inclusive insurance management solutions
amidst a pandemic 65 Session 17
36 Session 9 The ups and downs of
6 Session 1 How digitisation can inclusive insurance:
Opening of the conference — spur market growth Learning from experience
The landscape of inclusive
insurance 2020 39 Session 10 68 Session 18
Lessons learnt from Outlook: What will be the next
9 Keynote national strategies milestones in the development
of inclusive insurance/closing
11 Session 2 42 Session 11 the insurance gap?
Inclusive insurance Leveraging sovereign
responses to Covid-19 insurance to build scale 72 Registered organisations
76 Acronyms
14 Session 3 45 Agenda 77 Imprint
Pricing insurance in the Day 4—5 November 2020
midst of a pandemic New products and solutions to
increase insurance outreach
Agenda
17
Day 2—3 November 2020 46 Session 12
Inclusive insurance Insurance from a distance:
against climate risks Using remittances to
increase protection
18 Session 4
Public private partnerships 49 Session 13
for inclusive insurance Developing insurance
against climate risks: markets for MSMEs
What works and what does not?
52 Session 14
22 Session 5 Innovative distribution models —
The role of mobile in scaling High touch vs. low touch:
index insurance Is face to face really necessary?
25 Session 6 56 Session 15
Macro, meso, micro: Analysing the client value of
Practical experiences at all levels hospital cash products
of parametric insurance
29 Session 7
Quality Index Insurance
Certification (QUIIC)
Report International Conference on Inclusive Insurance 2020 — Digital Edition 2
Foreword
In November 2020, the world was reel- The acceleration of digitisation around
ing from the havoc wreaked by the the world has certainly been one silver
Covid-19 pandemic. Half the world lacks lining on the pandemic cloud. House-
access to healthcare or social protection holds, industry and governments have
and global human development would embraced digital solutions at an
see a reversal for the first time in a gen- unprecedented rate. The pandemic has
eration due to the pandemic’s impact been a grim reminder that we are,
on health and incomes, noted Achim indeed, all in this together and that sur-
Steiner, Administrator of the United vival depends on innovation, coopera-
Nations Development Programme, in tion and partnership. As in previous
his opening remarks. editions of the conferences, these were
key themes that emerged during the
Meanwhile, devastation from extreme week.
climate events and natural disasters
doggedly continued. Super Typhoon This sense of urgency, awareness of the
Goni swept across the Philippines, increasing complexity of risk and the
impacting two million people caught in sheer size of the problem that confronts
its path. Flooding due to excessive rain us are all driving determination and new
affected six million people in east partnerships to find solutions for the
Africa, nearly a million of whose homes billions of vulnerable people and small
were destroyed just months after a businesses around the world for whom
plague of locusts had wiped out crops insurance could and should provide
throughout the region, threatening food shelter from the storm.
security and livelihoods. In Central
America, hurricanes Eta and Iota dam- The inclusive insurance community is
aged infrastructure and crops, exa strong and growing. The digital edition
cerbating already strained food security of the 2020 Conference bore testament
and taking lives. to the solidarity of more than 2,000
registrations from 126 countries who
The findings of the Microinsurance are committed to ensuring that no one
Network’s 2020 Landscape of Inclusive is left without the protection and resil-
Insurance report, which was launched ience that good insurance can bring.
at the opening session of the confer-
ence, served as a stark call to action Katharine Pulvermacher,
that was echoed throughout the 18 ses- Executive Director,
sions that took place over the five days Microinsurance Network a.s.b.l.
of the virtual event.
Luxembourg, March 2021
Effective and responsible insurance —
including both risk transfer and risk
management — is critical if we are to
achieve the UN Sustainable Develop-
ment Goals. Dirk Reinhard, Vice Chair
of the Munich Re Foundation, reminded
us all that we desperately need in
creased cooperation between stake-
holders to deliver the sustainable
solutions that are urgently required.
Value for the customer, which begins
by understanding what clients need,
is the starting point for designing such
solutions. Deploying digitisation and
efficient payment systems are both
critical for these solutions to add this
value to customers while remaining Katharine Pulvermacher
economically viable. Executive Director, Microinsurance Network,
Luxembourg
Report International Conference on Inclusive Insurance 2020 — Digital Edition 3
Acknowledgements
The International Conference on Inclu- I would also like to thank all content
sive Insurance (ICII) 2020 — Digital partners and supporting organisations
Edition was the first fully online confer- of the ICII 2020 — A2ii, CEAR, Cenfri,
ence in the history of the ICII. The EA Consultants, GIZ on behalf of BMZ,
Covid-19 pandemic had made all plans GSMA, ILO’s Impact Insurance Facility,
to host in-person events obsolete. At the IAA’s Microinsurance Working
the same time, the pandemic has had Group, UNDP, MCII, the Microinsurance
a strong negative impact on the eco- Centre at Milliman, and the World Bank
nomic situation of the poor, and has Group.
highlighted the urgent need for more
affordable risk management solutions. Furthermore, I would like to make
It was therefore clear for all parties special mention of the team of rappor-
involved that cancelling the Internatio teurs and authors — José Miguel Flores
nal Conference on Inclusive Insurance Contró, Hugo Fulco, Ulf König, Maria
during the pandemic was not an option V. Sáenz and Kira Henshaw — led by
because affordable risk management Zahid Qureshi — who volunteered and
solutions have never been more impor- summarised the key messages and
tant. lessons from the various sessions of the
2020 conference. In addition, I would
We would like to thank all those who like to extend my thanks to the Munich
helped to make this conference with its Re Foundation conference team —
over 2,000 registrations from 126 coun- Thomas Loster, Julia Martinez, Nora
tries a genuine success. Switching from Fingado and Melissa Merle as well as
in-person to online mode with such a the new Chair of the Munich Re Foun-
diverse event was certainly an adven- dation, Renate Bleich.
ture. But it was worth the effort since it
allowed an unprecedented number and At the same time, I would like to
diversity of participants to access first- welcome the participants to the Inter-
hand experience in inclusive insurance. national Conference on Inclusive
Insurance 2021 which hopefully can
The great success of the conference take place in Jamaica. Together with the
would not have been possible without Insurance Association of Jamaica, we
the hard work of the conference steer- are looking forward to the next event,
ing committee and I would like to thank set to take place from 26 to 28 October
all members of the steering committee in Kingston.
for their guidance. I would also like to
express my sincere gratitude to the Dirk Reinhard, Vice Chairman
77 speakers and facilitators who volun- Munich Re Foundation, Germany,
teered to present their knowledge and Chairman of the Conference
lead the sessions. Steering Committee
A special thank-you goes to Doubell Munich, January 2021
Chamberlain, former Chairman of the
Board of the Microinsurance Network,
and its new chairman Lorenzo Chan,
CEO of Pioneer Insurance, for the long-
term cooperation and support of the
Microinsurance Network. We would like
to thank the Executive Director of the
Microinsurance Network Katharine
Pulvermacher and her team. They have
worked long hours to technically host
the event and were the core and heart
of this first digital ICII.
Dirk Reinhard
Vice Chairman, Munich Re Foundation,
Germany
Report International Conference on Inclusive Insurance 2020 — Digital Edition 4
Participant overview
Type of participant by category
Insurance and finance industry 59.0 %
Donor agencies, development and
international organisations 9.9 %
Microfinance and microinsurance providers 5.5 %
Government and regulatory bodies 5.2 %
Academics 6.3 %
Consultants 8.9 %
Media 0.4 %
Other 4.8 %
Source: Munich Re Foundation
Geographical origin of participants
1 146
Source: Munich Re Foundation
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Report International Conference on Inclusive Insurance 2020 — Digital Edition 5
Agenda Day 1—2 November 2020
Inclusive insurance amidst a pandemic
Session 1 Session 2 Session 3
Opening of the Inclusive Insurance Pricing inclusive
conference — responses to Covid-19 insurance in the
The landscape of midst of a pandemic
inclusive insurance Speakers
2020 Hosted by
Gilles Renouil IAA’s Microinsurance
Welcome Global Head of Insurance Working Group
products, Women’s World
Dirk Reinhard Banking, Switzerland Speakers
Vice Chairman, Munich Re
Foundation, Germany Shilpi Shastri Denis Garand
Strategic Advisory — Denis Garand and
Keynote Insurance, Women’s Associates, Canada
World Banking, USA
Achim Steiner Jeff Blacker
Administrator of the Jordon Tait Independent Consulting
United Nations Assistant General Actuary, USA
Development Programme Manager — Commercial
(UNDP), USA Lines, GK General Facilitator
Insurance, Jamaica
Panellists Nigel Bowman
Rehan Butt Co-founder, Inclusivity
Alice Merry Chief Commercial Officer, Solutions, South Africa
Financial Inclusion MicroEnsure, Pakistan
Consultant, Peru
Syed Nayyar Hussain
Garance Wattez-Richard Director — Head of
Head of AXA Emerging Department, Securities and
Customers, GIE AXA, France Exchange Commission,
Pakistan
Craig Churchill
Chief, ILO’s Social Finance Facilitator
Programme & Team Leader,
Impact Insurance Facility, Craig Thorburn
Switzerland Lead Financial Sector
Specialist, The World Bank,
Facilitator USA
Katharine Pulvermacher
Executive Director,
Microinsurance Network,
Luxembourg
Report International Conference on Inclusive Insurance 2020 — Digital Edition 6
Session 1 Opening of the conference —
The landscape of inclusive insurance 2020
The first-ever digital ICII opened with Katharine Pulvermacher, Executive Reaching women clients
the launch of the Landscape of Micro- Director of the Microinsurance Net-
insurance 2019 study, setting the scene work, introduced the Landscape of Alice Merry added that
for five days of discussions and insights. Microinsurance 2019 study, which pro- four trends were emerging:
Welcoming some 2,000 registered par- vides much-needed insight into devel-
ticipants, Dirk Reinhard, Vice Chairman oping markets. She said the findings — The continuing rise in low-cost
of the Munich Re Foundation, noted make for sobering reading — only one health products;
that the conference comes at a very dif- person in four has insurance, and out of
ficult time both on a personal level for the 5.4 billion emerging consumers — Combining digitisation and the
millions of people, and for the insurance worldwide, only about 500 million have human touch;
industry as a whole. any kind of insurance to protect them
against daily and catastrophic risks — Concerns around customer
“Post-pandemic, we will still face the (see Figure 1). value, highlighted by low claims
much bigger challenge of climate ratios for low-cost personal
change,” said Dirk Reinhard. “Insurance The landscape studies date back to insurance products; and
can and should help vulnerable popula- 2010. For the first time, this year the
tions to manage climate risk, educate study collected data on the gender of — Shifting perspectives on
them about the benefits and limitations customers. Asia has the highest per- climate risks.
of insurance, and encourage an ena- centage of female clients, followed by
bling regulatory environment to create Latin America and the Caribbean, and The study detected an increasing rec-
more efficient distribution channels. then Africa, Katharine Pulvermacher ognition that climate and natural disas-
Collecting and sharing reliable data is noted. ter risks affect not only agriculture but
also key.” also a wide range of economic activities
Author of the report Alice Merry said and people themselves. Index covers
Keynote speaker Achim Steiner, Admin- that these figures probably reflect and natural disaster insurance are
istrator of the United Nations Develop- broader levels of economic and finan- increasingly being used to protect liveli-
ment Programme (UNDP), also focused cial inclusion in each region (see hoods outside of agriculture. Climate
on the dual challenges of Covid-19 and Figure 2). “To better serve women, a change is bringing about new and fre-
climate change. Global human develop- vital first step for insurers is to collect quent natural disasters, while gradual
ment, he said, is set to decline this year and monitor gender-disaggregated changes in climate are posing threats to
for the first time in a generation. How- data. Microinsurers were able to food security and increased health risks.
ever, inclusive insurance can play a vital provide this information for 45 % of Climate has a bearing on all classes of
role in getting the Sustainable Develop- the products in the study.” inclusive insurance, and they have a role
ment Goals (SDGs) back on track by to play in improving resilience.
protecting lives and livelihoods, reduc-
ing poverty, increasing financial inclu-
sion, and empowering women.
Dirk Reinhard Achim Steiner Alice Merry
Vice Chairman, Munich Re Foundation, Administrator of the United Nations Financial Inclusion Consultant, Peru
Germany Development Programme (UNDP),
USA
Report International Conference on Inclusive Insurance 2020 — Digital Edition 7
Figure 1
The people protection gap
No more than one person out of every
four has access to insurance.
World daily income distribution*
> US$ 50 7%
US$ 20—50 9%
Emerging consumers represent
US$ 10—20 13 %
an estimated 69 % of the world’s
population.
US$ 2—10 56 %
That’s around 5.4 billion people, of
< US$ 2 15 % whom only about 500 million have any
kind of insurance to protect them
* Pew Research Center — 2011 estimates. against daily and catastrophic risks.
Source: Pulvermacher, Katharine. Presentation “The Landscape of Microinsurance 2019.”
International Conference on Inclusive Insurance — Digital Edition 2020.
Figure 2 For the first time, this year’s
Reaching women clients Microinsurance Landscape study
has collected data on the gender
of microinsurance customers.
Insurance providers were able to
provide this information for 45 % of
products in the study.
The median percentage of
female clients in each region
Region Median percentage of female clients
Africa 40 %
Asia 60 %
Latin America and the Caribbean 52 %
All regions 50 %
Source: Merry, Alice. Presentation “The Landscape of Microinsurance 2019.”
International Conference on Inclusive Insurance — Digital Edition 2020.
Report International Conference on Inclusive Insurance 2020 — Digital Edition 8
Session 1
Opening of the conference — The landscape of inclusive insurance 2020
Panellists Garance Wattez-Richard, In simple terms, an insurer is usually The study’s research focuses on 30
Head of AXA Emerging Customers, and expected to have a claims ratio of 60 to countries in Africa, Asia and Latin
Craig Churchill, Chief of the ILO’s Social 70 % and an expense ratio of 20 to 30 %. America. Combining extensive in-coun-
Finance Programme & Team Leader of A combined ratio of less than 100 leaves try primary research with analysis of
its Impact Insurance Facility, both com- a margin for a before-tax profit; if it is the context for market development,
mented on the significance of the Land- more than 100, the excess produces an the landscape study provides a unique
scape study and the importance of underwriting loss, which needs to be benchmark for all stakeholders in inclu-
robust data. offset by investment income. sive insurance, said Dirk Reinhard as
the session concluded. “The research
Garance Wattez-Richard said she had In this global study of inclusive insur- is fundamental to improving the supply
been positively surprised by how the ance across the three regions, claims of insurance products and services
“essential building blocks” already in ratios are at a low median rate of 23 %. designed to meet the needs of vulner-
place have helped countries cope with The average claims ratio is particularly able, low-income households and
Covid-19 — for example in India, where low in Latin America and the Caribbean MSMEs, and to increasing uptake.
200 million women received emergency at just 10 %, and highest in Africa at The results of the study not only enable
subsidies through existing channels. 28 %. Although many products do offer cross-country comparison to identify
“The world has taken a crash course on good value to clients, a significant pro- factors critical to creating a fertile
life and health insurance,” she said. portion of products (33 % across all environment for inclusive insurance, but
“How can we turn all this into a silver regions) have single-digit claims ratios, also provide insurers and distribution
lining?” and in Latin America and the Caribbean partners with much-needed insight into
over half of the products recorded had the potential market size.”
“Climate change and Covid-19 demon- single-digit claims ratios.
strate how vulnerable we all are, and
insurers should be able to respond to The claims ratios are impacted by the
those opportunities,” said Craig high expense ratios of many insurers,
Microinsurance Network
Churchill. “However, on the flip side particularly in Africa, and by high com-
there are huge challenges — it’s deeply missions for distribution partners, par-
troubling to see the data on claims. ticularly in Latin America and the Carib-
It’s definitely not a pretty picture.” bean. These costs raise the price of
insurance products while squeezing the
amount available to pay claims.
Garance Wattez-Richard Craig Churchill Katharine Pulvermacher
Head of AXA Emerging Customers, Chief, ILO’s Social Finance Programme & Executive Director, Microinsurance Network,
GIE AXA, France Team Leader, Impact Insurance Facility, Luxembourg
SwitzerlandReport International Conference on Inclusive Insurance 2020 — Digital Edition 9
Keynote By Achim Steiner — Administrator UNDP
Excellencies, Ladies and Gentlemen, At this critical moment, inclusive This is an incredible challenge — but
Dear Colleagues, insurance is playing a vital role in one we can achieve if we work together.
getting the Sustainable Development So, please allow me to share with you
It is with great pleasure that I welcome Goals back on track — particularly four fundamental reflections on how I
you to the 16th International Confer- in terms of protecting lives and liveli- see the work of the conference:
ence on Inclusive Insurance. This digital hoods. It is also contributing to a
edition of the conference comes as range of critical areas including poverty Firstly, in light of the increasing com-
countries across the globe tackle the reduction, financial inclusion and plexity of risk that communities face —
unprecedented consequences of the women’s empowerment. the inclusive insurance industry must
Covid-19 pandemic. Global human design and develop solutions that are
development, a combination of the Indeed, the pandemic has shown us not only about the transfer of risk. The
world’s education, health and income, is that expanding access to insurance is solutions must also focus on the long-
set to decline in 2020 for the first time vital. That includes areas like health term management of risk — and they
in a generation. at a time when 50 % of the world lacks must aim to build broad family financial
healthcare or social protection.1 Inclu- resilience.
sive insurance is also key to protecting
micro, small and medium-sized enter- Secondly, governments should recog-
prises which generate 70 % of employ- nise the crucial importance of access
ment worldwide.2 Those businesses will to financial services — including insur-
be critical to driving forward the global ance — for economic development, and
socio-economic recovery. develop concrete strategies to address
critical inclusion gaps.
We are also aware of the increasingly
critical role that inclusive insurance Thirdly, the insurance industry must
will play in mitigating the many make digitisation central to its work.
impacts of our changing climate. At This is not only because of the realities
the UN Climate Action Summit in 2019, of the Covid-19 pandemic, but also
the insurance and development com- because of its ability to improve the
munity recommitted itself to delivering products, tools and services it pro-
on the ambitious target of 500 million vides to those who need it most.
more beneficiaries of climate risk insur-
ance by 2025 — 150 million through
inclusive insurance.
1
ILO
Achim Steiner
2 Administrator of the United Nations
Development Programme (UNDP),
USA
ILOReport International Conference on Inclusive Insurance 2020 — Digital Edition 10
Opening remarks
Take a look at a new report by the UN As the UN’s technical lead in the
Secretary-General’s Task Force on the socio-economic response to Covid-19,
Digital Financing of the Sustainable UNDP is well aware of the critical need UNDP
Development Goals. It points out how for inclusive insurance. We will there-
digital finance holds extraordinary fore work on promoting inclusive
potential to expand financial inclusion insurance in a minimum of 20 coun-
by empowering citizens as savers, tries over the next 6 years — thanks
investors, borrowers, lenders and tax- largely to support from the Federal Gov-
payers. And if we give people a choice, ernment of Germany, a global leader in
they will invest in critical areas like the this space. And to help UNDP’s Country
green economy — boosting job creation Offices, programme countries and our
and inclusion. partners to take advantage of the myr-
iad of benefits associated with inclusive
Finally, partnerships are everything — insurance, we will launch a “one-stop
that includes those between the private shop” for them later this year, called the
and public sectors, within government, Insurance and Risk Finance Facility.
between ministries of finance and
insurance regulators and supervisors — Finally, I am incredibly impressed with
and beyond. So, please see the United the level of engagement with this
Nations Development Programme as conference — it has attracted some
your critical partner — wherever you are. 2,000 people from 126 countries. This
On the ground in 170 countries, we is quite remarkable for a virtual event.
work with governments on legislation I would like to express my gratitude to
and regulation. And we construct new all of you for your efforts to move inclu-
initiatives with partners from the private sive insurance forward at this critical
sector — all built on the specific needs moment — and I wish you a productive
and realities of people and their com- week ahead.
munities.
Thank you.Report International Conference on Inclusive Insurance 2020 — Digital Edition 11
Session 2 Inclusive insurance responses to Covid-19
By Ulf König
This session addressed the impact of How Covid-19 affects policyholders Third and last, a number of factors ham-
Covid-19 on the inclusive insurance com- pered access to and utilisation of in
munity in different parts of the world. Women’s World Banking presented surance. Banking and microfinance
Panellists discussed their reactions to early findings from a study of six health operations came almost to a standstill
short-term implications of the pandemic microinsurance schemes, one each in for lack of physical contact. Branches
as well as the long-term changes it has Egypt, India, Jordan, Morocco, Pakistan remained closed for many weeks in
triggered. and Uganda. It shows that the pan- most countries, preventing customers
demic has had three distinct effects on from filing claims. On top of that, insur-
policyholders and potential customers. ers had to send their employees home,
First, unemployment increased in leaving them with insufficient capacity
industries such as manufacturing and to handle the outstanding claims.
hospitality, where a majority of the In practice, this translated into major
workforce is women, causing major delays in reimbursement or even no
insecurity and spending cuts. Second, cover at all. At the same time, while cus-
access to healthcare has narrowed as tomers became more aware of the ben-
many hospitals are overwhelmed by efits of insurance, their declining
Covid-19 cases, forcing them to concen- incomes made cover unaffordable and
trate their resources on those cases and many defaulted on their premiums.
refuse admissions for other services.
This is reflected in Figure 3, which
depicts low occurrence of hospitalisa-
tion (% of claims) observed in three
microinsurance schemes over the years
2018—20, dropping significantly in
2020 compared to previous years.
Figure 3
Total monthly hospitalisation incidence by admission date
0.35 %
0.30 %
0.25 %
0.20 %
0.15 %
2018
0.10 %
0.05 % 2019
0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2020
1. 2. 3.
The possible causes low reporting of claims customers not going to delay by the FSP and
of the lower incidence (branch shutdown or hospitals for non-Covid insurers in approving
rates could be due to customers’ movement cases, or the claims as they are
factors such as: restricted), also working with
limited capacity.
Source: Renouil, Gilles. Presentation “Inclusive Insurance Response to Covid-19.”
International Conference on Inclusive Insurance — Digital Edition 2020.Report International Conference on Inclusive Insurance 2020 — Digital Edition 12
Session 2
Inclusive insurance responses to Covid-19
Box 1 How the industry reacted Beyond the immediate crisis
Bearing the brunt
Insurers acted fast on these new chal- Covid-19 has shown that digital distri-
Although in many countries more men lenges and made major efforts to bution and digital operations will be of
have reportedly died from Covid-19 digitise both their delivery models and crucial importance in narrowing the gap
than women, women are facing more internal processes, especially claims- of financial inclusion further — in par-
challenges because of the prevalent handling routines. This consensus of ticular, mobile technology, which enjoys
social and economic gender gaps now panellists from Jamaica and Pakistan broad penetration in most countries and
exposed by the pandemic. These was echoed in the session’s Q&A round. represents a good means of reaching
include loss of livelihood, reduced food The pandemic created an unprece- potential customers. As women in
security, access to essential healthcare dented sense of urgency in the industry, low-income communities are less likely
services (e.g. maternity, gynaecologi- triggering a wave of innovation that to own and use a mobile phone and
cal), more cases of gender-based vio- may well persist beyond the immediate the internet, they will require special
lence and mental health. crisis. Some of these projects were car- attention. Importantly, insurers do not
ried out with the help of external con- have to wait for regulators’ permission
Covid-19 has forced the low-income sultants, which contributed to their to digitise their processes and may
population, especially women, to speed of implementation. Regulators, embark upon this journey on their own.
mobilise their savings for basic suste- on the other hand, issued a number of Once they are running fully digitally,
nance rather than investing in their guidelines providing insurers with relief insurers can even pass on their cost
long-term goal of children’s education. on reporting duties, flexibility for dead- savings to customers in the form of
As men in households succumb to lines and recommendations on solvency lower premiums, which would accel-
the pandemic, it’s the women left issues. erate adoption even further.
behind who are feeling the pressure of
having no safety net or inheritance
and they a
re at a greater risk of being
pushed into poverty.
Source: Shastri, Shilpi. Presentation “How Covid-19 widens
the gender equality gap in low income countries.” International
Conference on Inclusive Insurance — Digital Edition 2020.
Gilles Renouil Shilpi Shastri Jordon Tait
Global Head of Insurance products, Strategic Advisory — Insurance, Assistant General Manager —
Women’s World Banking, Switzerland Women’s World Banking, USA Commercial Lines, GK General Insurance,
JamaicaReport International Conference on Inclusive Insurance 2020 — Digital Edition 13
In addition, filing a claim has proved to Hospital cash insurance has gained Lessons learnt
be the moment of truth for policyhold- momentum in microinsurance in the
ers. For many, it is the first contact with last few years because of its simplicity — Covid-19 has slowed down progress
their insurance provider since purchas- and effectiveness in providing critical in financial inclusion and inclusive
ing cover — and it is often not a satisfac- financial support during health emer- insurance all over the globe.
tory experience, fraught with cumber- gencies, and there is a separate session
some steps required to report a claim dedicated to it in the conference. — Distribution/delivery and
and get it processed. Insurers are well customer coverage represent the
advised to think about ways to win back biggest challenges brought up
their customers’ goodwill, e.g. by ac by the pandemic.
cepting late premium payments and
Women’s World Banking
late claim filings. — Women are impacted more severely
Micro Insurance Company
than men by the pandemic.
Securities and Exchange
In this context, hospital cash insurance
Commission of Pakistan
needs to be mentioned explicitly. Many — Switching to digital delivery models
Covid-19 patients ended up recuperat- and to digital operations is turning
ing at home due to limited capacity at out to be key for insurers to cope
hospitals. The claims of those who had with the crisis. Covid-19 has fuelled
hospital cash insurance were declined innovation in unexpected ways.
because they were not hospitalised. New approaches call for technical
However, they were not able to generate education and training of customers
any income during this time either. in low-income communities.
A critical value proposition of hospital
cash insurance is that it acts as an — Governments can contribute to
income replacement tool in the event easing the regulatory burden
of the hospitalisation of the breadwin- on insurers, during the Covid-19
ner. These customers expressed their pandemic and beyond.
frustration and felt that the insurance
providers failed to adapt the product to
these exceptional circumstances.
Rehan Butt Syed Nayyar Hussain Craig Thorburn
Chief Commercial Officer, Director — Head of Department, Lead Financial Sector Specialist,
MicroEnsure, Pakistan Securities and Exchange Commission, The World Bank, USA
PakistanReport International Conference on Inclusive Insurance 2020 — Digital Edition 14
Session 3 Pricing insurance in the midst of a pandemic
By Maria V. Sáenz
Pricing insurance products can be a The pricing process was explained After running a Monte Carlo simulation
challenge. Pricing microinsurance is using a hypothetical health insurance 1,000 times with the same basic
even more challenging. And trying to do product and both deterministic and assumptions plus a 90 % desired confi-
it during an unexpected pandemic is stochastic models. The result of the dence that the risk premium will be
something that was until now unthink- deterministic approach is the weighted sufficient, the result was very close to
able. This session went from a recap on average of the incidence rate (based the deterministic result: US$ 11,232.
insurance pricing to the lessons from on the claims frequency distribution) This simulation gives an idea of the out-
catastrophe insurance applicable to a multiplied by the weighted average of comes and of how much margin is
pandemic. the expected amount of insurance needed for a desired level of confidence.
claims (distribution of the amount filed If higher confidence is desired, more
Pricing insurance without data by those who had a claim). In this margin goes to the premium. With
example, the risk premium is 0.54 (the fewer people in the model or higher
The process of pricing insurance, and expected number of claims filed per volatility in the data, higher margins are
microinsurance under normal or abnor- person per year) multiplied by an aver- added to the premium.
mal circumstances, is the same: gather age claim of US$ 40, that is US$ 21.60
data, set assumptions, define a model, per person per year. If the pool insured To explain the stochastic model, a
validate model output, monitor experi- is 500 people, the gross premium Monte Carlo simulation of the hypo-
ence against assumptions, and repeat would be US$ 21.60 x 500 insureds = thetical product was run online, using
as required. The price is the gross pre- US$ 10,800 (see Figure 4). However, fixed assumptions such as deductibles,
mium, which equals the risk premium given that usually the data to set coinsurance and costs, among others.
(incidence rate or likelihood of the assumptions is not perfect, the insurer The responses of the audience deter-
insured event x expected amount of needs to add a margin to increase mined the incidence rate and the
insurance claims) + expenses + profit confidence that the risk premium will expected amount of insurance.4
margin. be sufficient. To add this extra layer of
certainty to imperfect data, insurers
may use stochastic methods, like the
Monte Carlo simulation.3
Figure 4
Deterministic or stochastic models?
Distribution Frequency of claims Distribution Amount of claims
60 % 0 50 % US$ 10
30 % 1 40 % US$ 50
6% 2 10 % US$ 150
4% 3
— Stochastic processes have random variables
— Monte Carlo is a way of simulating stochastic processes
3
Expected numbers of insured 500 IBM.com defines Monte Carlo simulation
Desired confidence 90 % as a mathematical technique used to estimate
the possible outcomes of an uncertain event.
Run 1000 simulations producing a range of results It was invented by John von Neumann and
Aggregate claims, average US$ 10,800 Stanislaw Ulam during World War II to
improve decision-making under uncertain
Aggregate claims, 90 % confidence US$ 11,232
conditions.
Risk premium per person with margin US$ 22.46 = US$ 11,232 / 500
4
The Excel file with the Monte Carlo simulation
Source: Blacker, Jeff. “Pricing Insurance without Data.”
can be downloaded from Global Insurance
International Conference on Inclusive Insurance — Digital Edition 2020. Consulting.Report International Conference on Inclusive Insurance 2020 — Digital Edition 15
The stochastic model has many advan- Dealing with the impact of Women’s World Banking’s preliminary
tages. It gives a good idea of the risk major perils findings from the microinsurance
premium and the margin needed for a schemes operated by three different
desired level of confidence, while allow- Studies show that survivors of extreme financial service providers during the
ing hypothetical scenarios with differ- weather events experience adverse pandemic show that the percentage
ent plans and designs. However, there mental health outcomes that can have of hospitalisations is lower than in
are some disadvantages: it can give a significant social and political con- previous years and maternity and gyne-
false sense of confidence if the input sequences. Only the immediate impact, cology claims show a sharp decline.
is not correct, and it has difficulty simu- such as deaths during a hurricane, Reasons for the declines may be low
lating 100-year events, making it inca- makes the news, but there are likely reporting of claims because of branch
pable of pricing insurance for Covid-19. long-term effects. shutdowns or restrictions on customers’
movements, fewer visits to hospitals
In the face of data problems, pricing A Swiss Re study of Ebola’s conse- for non-Covid-19 cases, and delays in
specialists may use incomplete data quences showed that 18 months after approval of claims as providers face
or data from other similar sectors, its peak, the population affected devel- working and capacity restrictions.
adjusting for various actuarial factors. oped mental health issues. In the case
Any subjective valuation can then be of Covid-19, a likely consequence, be Statistics of the Canadian Institute
addressed through market research. sides mental health, is long-term organ of Actuaries show the same trend
Pricing requires a holistic view of the damage. (see Figure 5).
status and trends, plus frequent moni-
toring against assumptions to measure
results.
Figure 5
Canadian Institute of Actuaries COVID Study
Total Individual and Group Life Insurance Monthly Claims count
Jan 2019—June 2020
3K
Group Claims
2K
count
1K
3.2 3.2 3.4 3.2 3.4 3.0 3.1 2.8 2.8 3.0 3.0 2.9 3.3 3.0 2.9 2.8 2.7 2.2 0
10K
8K
Individual Claims
6K
count
4K
2K
10.2 8.6 9.2 8.9 9.1 8.0 8.4 8.0 8.3 8.8 8.7 8.4 10.1 8.5 9.0 9.8 9.0 6.4 0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
2019 2020
Source: Garand, Denis. “Pricing insurance in the midst of a pandemic.”
International Conference on Inclusive Insurance — Digital Edition 2020.Report International Conference on Inclusive Insurance 2020 — Digital Edition 16
Session 3
Pricing insurance in the midst of a pandemic
The pandemic serves as a reminder that Lessons learnt
low-income people are hit hardest by
systemic shocks such as natural disas- — The pandemic seems to have — Lack of data should be offset
ters or pandemics. Regulators, insurers changed everything. But the pricing by research and a holistic view
and intermediaries together have to process in insurance remains the of the market, plus frequent
increase access to inclusive insurance same, except for the calculation of monitoring to measure results.
supplemented by risk mitigation. tail risks, which can be present to
a significant extent. — Many studies are expected to help
regulators, industry, distributors
— Inclusive insurance is learning from and clients understand the post-
the experience with natural catastro- pandemic ecosystem. A focus on
IAA
phes and their long-lasting conse- inclusive insurance to protect the
quences. The lessons call for special poor should be a priority.
attention to mental health issues.
The product’s pricing and added — Understanding the context of the
value should be good enough to target population is critical.
guarantee a normal rate of claims,
paid rapidly.
Denis Garand Jeff Blacker Nigel Bowman
Denis Garand and Associates, Canada Independent Consulting Actuary, USA Co-founder, Inclusivity Solutions, South AfricaReport International Conference on Inclusive Insurance 2020 — Digital Edition 17
Agenda Day 2—3 November 2020
Inclusive insurance against climate risks
Session 4 Session 5 Session 6 Session 7
Public-private The role of mobile in Macro, meso, micro: Quality Index Insurance
partnerships for inclusive scaling index insurance Practical experiences Certification (QUIIC)
insurance against climate at all levels of parametric
risks: Hosted by insurance Hosted by CEAR
What works and what GSMA — Mobile
does not? for development Hosted by Speakers
the Microinsurance
Hosted by the Speakers Centre at Milliman Michael Carter
ILO’s Impact Professor, University
Insurance Facility Simon Schwall Speakers of California, MRR
CEO, OKO, Israel Innovation Lab, USA
Speakers Matt Chamberlain
Pranav Prashad Principal and Consulting Lilian Ndungu
Srinivasan Iyer Senior Technical Officer, Actuary, Milliman, Thematic Lead —
Programme Manager, ILO’s Impact Insurance USA Agriculture and Food
Ford Foundation, India Facility, Switzerland Security, Regional Centre
Iker Llabres for Mapping of Resources
Mario Wilhelm Facilitator Business Manager for for Development (RCMRD),
Head Middle East & Africa, El Salvador and Kenya
Swiss Re, Switzerland Rishi Raithatha Actuarial Officer, MiCRO,
Senior Advocacy Manager, USA Munyaradzi Daka
Munyaradzi Daka GSMA Mobile Money Consultant, Agro Insurance
Consultant, Agro Insurance Programme, UK Isaac Anthony Consortium, Uganda
Consortium, Uganda CEO, CCRIF SPC, Cayman
Islands Facilitator
Emily Coleman
Agricultural Insurance Lead, Facilitator Glenn Harrison
INSURED, PARM, IFAD, Italy C.V. Starr Chair of Risk
Indira Gopalakrishna Management & Insurance,
Facilitator Microinsurance Specialist, Robinson College of
MicroInsurance Centre at Business, Georgia State
Pranav Prashad Milliman, Singapore University, USA
Senior Technical Officer,
ILO’s Impact Insurance
Facility, SwitzerlandReport International Conference on Inclusive Insurance 2020 — Digital Edition 18
Session 4 Public-private partnerships for inclusive insurance
against climate risks: What works and what does not?
By Kira Henshaw
The session highlighted the necessity of Box 2 Pradhan Mantri Fasal Bima Yojana
public-private partnerships (PPPs) in Pradhan Mantri Fasal Bima Yojana (PMFBY) is a government-sponsored
building sustainable inclusive insurance weather-based crop insurance PPP in
programmes addressing climate risks. Number of people insured: India. It was launched in 2016 after
55 million per year rolling back two earlier national agricul-
Assisting smallholder farmers Insured risks: ture insurance schemes. Premiums are
Crop (pre-sowing to post-harvest) subsidy-based, with a nominal share
Smallholder farmers are highly vulnera- Premium: paid by farmers. The premium cost over
ble to shocks. Farm yields depend on Farmers’ share ranges from 1.5 to 5 % and above the farmer share is equally
unpredictable seasonal rainfall, and of the sum insured, with the rest subsidised by states and the central
low income from other sources makes subsidised by government government.
it difficult to purchase insurance to
absorb losses. A PPP, engaging the Implementation challenges in covering
government, private insurers and inter- smallholdings and large crop varieties
mediaries, can help farmers pay premi- include high transaction costs, incon-
ums while creating a scalable platform. sistent and arbitrary loss assessment
and inefficient claims payments. To
increase effectiveness, sustainability
and the impact of government support,
PMFBY focuses on improving inclusion,
damage assessment, credibility, edu
cation, simplification and innovation.
Key features of the scheme include:
— integration of land records with
the PMFBY portal;
— crop insurance mobile app for
easy enrolment of farmers; and
— use of technology such as satellite
imagery, remote-sensing, drones,
artificial intelligence and machine
learning to assess crop losses.
Srinivasan Iyer Mario Wilhelm Munyaradzi Daka
Programme Manager, Head Middle East & Africa, Swiss Re, Consultant, Agro Insurance Consortium,
Ford Foundation, India Switzerland UgandaReport International Conference on Inclusive Insurance 2020 — Digital Edition 19
The features make it easier for the Box 3 The Uganda Agriculture Insurance
farmer to report crop loss within 72 The Uganda Agriculture Scheme (UAIS) is a PPP insured by the
hours of occurrence of any event Insurance Scheme Agro Consortium (a group of 11 insur-
through the crop insurance app, a ance companies). Through the co-insur-
common service centre (CSC) or the Number of people insured: ance structure of the consortium, agri-
nearest agriculture officer. 174,800, smallholder and cultural risks underwritten are shared
large-scale farmers throughout the risk pool, spreading the
As an end-to-end risk mitigation mech- Insured risks: financial burden of claims and unifying
anism for farmers, the scheme extends Natural calamities for crops standards, procedures and products.
cover for the entire cropping cycle from and livestock
pre-sowing to post-harvest, including Premium: Subsidised by the Government of
cover for losses arising out of prevented Average US$ 41.05 per year Uganda, farmers purchasing agriculture
sowing and mid-season adversities. insurance products directly or through
Also covered are individual farm-level financial institutions pay reduced
losses arising out of localised calamities premiums. Subsidies of approximately
due to perils such as inundation, cloud- US$ 1.5m are provided per year, with
burst and natural fire. a view to increasing provision with
increasing demand (see Figure 6).
With 290 million farmers enrolled in
five years, PMFBY serves as an example
of a PPP, supported by public sector
subsidies, achieving scale while keep-
ing premiums affordable.
Figure 6
UAIS 3-year performance
174,800 insured are 5.8 % of 3,000,000 active farmers in Uganda
Year 2017 2018 2019 Total
Farmers insured 45,701 47,305 81,794 174,800
Premium 1,450,000 2,300,000 3,500,000 7,250,000
Claims 490,000 460,000 520,000 1,470,000
Loss Ratio 34 % 20 % 14 % 20 %
Source: Daka, Munyaradzi. Presentation “Uganda Agriculture Insurance Scheme”,
International Conference on Inclusive Insurance — Digital Edition 2020.Report International Conference on Inclusive Insurance 2020 — Digital Edition 20
Session 4
Public private partnerships for inclusive insurance against climate risks:
What works and what does not?
Ensuring stakeholders’ input A PPP’s contribution to such priorities is Box 4
mutually beneficial to partners in the Three PPP learnings
Stakeholder responsibilities should be public and private sectors. Govern-
specified, ensuring their full support of ments have the capacity and incentive 1. Think Big — climate change is a
the PPP. In Uganda, while the govern- to reach people at scale as they are global and long-term challenge.
ment increases financial sustainability required to fulfil a social role, creating PPPs should articulate their goals
of UAIS, government agencies provide safety nets for people and businesses. and maintain a long-term vision,
data support, financial institutions The PPP’s focus on enhancing the gearing pilot studies towards achiev-
increase access to credit, and the con- safety nets though products protecting ing scale and using public resources
sortium undertakes sensitisation and the vulnerable against climate risks efficiently to create widespread
awareness activities with government will help it achieve scale and make its solutions.
agencies and development partners own business sustainable. Schemes
to encourage uptake. beginning as private sector initiatives in 2. Start Small — fail small and fast.
India (PMFBY) and Northern Kenya Use pilots to test and refine products
A PPP must acknowledge potential (livestock insurance) have been scaled and claims processes. Models and
effects of political pressure on products, successfully by broadening the scope of data availability evolve over time.
premiums and claims. Financial support operations as part of larger public pro-
should be ring-fenced from day-to-day grammes. In a complementary role, pri- 3. Scale Fast — reach scale quickly to
political interference and insurance vate players continue to drive innova- show traction and keep stakeholders
principles should form the basis of tion and competition for the expansion engaged. Few schemes have
schemes. Nevertheless, the PPP needs and improvement of products and ser- succeeded without scaling fast.
to embrace new national priorities vices.
that may affect its mission and opera-
tions — particularly ones such as cli-
Source: Wilhelm, Mario. Presentation “Public Private
mate change that are clearly connected Partnerships for Inclusive Insurance against Climate Risk.”
to its business. International Conference on Inclusive Insurance — Digital
Edition 2020.
Emily Coleman Pranav Prashad
Agricultural Insurance Lead, INSURED, Senior Technical Officer, ILO’s Impact
PARM, IFAD, Italy Insurance Facility, SwitzerlandReport International Conference on Inclusive Insurance 2020 — Digital Edition 21
Creating an enabling environment Another challenge of state-led subsi- Lessons learnt
dised schemes can be that farmers have
To build a sustainable national agricul- agricultural insurance without under- — Long-term sustainability and effi-
tural insurance programme, there are standing the cover they have or how ciency of PPPs remains challenging.
common demand and supply chal- claims can be made. In some countries, Multi-stakeholder approaches
lenges that government-led schemes distribution models are commonly used are critical with public and private
can help overcome. in social village structures, with village sectors as equal players.
leaders purchasing insurance without
Food security became particularly individual farmers’ full understanding. — Governments and donors can help
important when pandemic trade restric- In addition to alternative delivery chan- overcome market development
tions arose. This has encouraged inter- nels, awareness-raising and capacity challenges. Private players should be
est in helping to create and test new development can therefore help govern- able to benefit from public goods,
insurance products for high value agri- ments and PPPs create strategies with a levelling playing fields and incentiv-
cultural value chains, such as for vege- long-term view of market development. ising insurer involvement.
tables, rather than only for rice, which
has so far been a focus in countries like Helping to collect and provide access — Governments should improve
Cambodia and Indonesia. However, to good quality weather and yield data participation of private insurers to
sometimes insurance for high-value is a
widespread challenge and a funda- enable competition for subsidised
crops can bring other challenges, for mental area for government to support, products. Some countries have
example finding solutions to permit particularly in the face of climate subsidised programmes with only
timely loss-and-damage assessment. change, in order to develop, operate, one or two state-backed insurers
Also on the product side, demand and validate accurate products. able to access subsidies.
research in Vietnam suggested that
crops should be diversified on the basis — Risk pooling improves capacity for
of proximity to various target groups skills development and product
and their local risk exposure, rather consistency, and provides robust
PMFBY
than following uniform product design product research and development
UAIS
decisions taken at state level. opportunities — standardisation is
useful for achieving scale.Report International Conference on Inclusive Insurance 2020 — Digital Edition 22
Session 5 The role of mobile in scaling index insurance
By José Miguel Flores Contró
The session focused on how mobile Index insurance enables access but Among the study’s key
and satellite technology can digitise has failed to generate uptake findings were that
delivery and service, and can continue to
make insurance more accessible and In May 2020, the GSMA, which repre- — index insurance enables first-time
acceptable to smallholder farmers. T he sents mobile operators worldwide, pub- access for many smallholder farmers,
panel represented: OKO5, a crop insur- lished the report “Agricultural insurance but uptake remains limited;
ance start-up using satellite imagery and for smallholder farmers,”6 covering
weather forecasting to simplify claim index insurance trends, challenges and — partnerships are fundamental for
management; ILO’s Impact Insurance opportunities (see Figure 7). The GSMA scaling-up and education;
Facility, which is dedicated to enhancing brings together some 750 operators
insurance capacity to reduce vulnerabil- with almost 400 companies in the — mobile technology enables service
ity and protect the poor; and the GSMA, broader mobile ecosystem, including delivery across the agricultural
an association of mobile network opera- handset and device makers, software insurance value chain;
tors worldwide. companies, equipment providers and
internet companies, as well as organisa- — MNOs and mobile money providers
tions in adjacent industry sectors. can expand index insurance services;
and
— insurance should be bundled
with loans.
5
In the Yoruba religious system Oko is
a deity protective of agriculture.
6
GSMA report, “Agricultural insurance
for smallholder farmers”, published by the
GSMA AgriTech programme, 2020.
Figure 7
GSMA Mobile for Development: reducing inequalities in our world
Clean Tech Identifying innovation, Connected Society Addressing
facilitating scale and reducing the access and usage barriers to increase
fragmentation of the clean tech space mobile internet adoption
Assistive Tech Improving the accessi- Connected Women Reducing the
bility and affordability of mobile gender gap to increase digital and
services for persons with disabilities financial inclusion for women
M4D Ulitities Unlocking access to Digital Identity Enabling robust
affordable and improved energy, and unique digital identity for
water and sanitation services greater inclusion
Mobile for Humanitarian Innovation Ecosystem Accelerator Delivering
Accelerating the delivery and impact social impact and scale through
of digital humanitarian assistance mobile innovation
Mobile Money Accelerating the Agri Tech Digitising the agri value
digital financial ecosystem for the chain to drive mobile financial
underserved inclusion for small holder farmers
Source: Raithatha, Rishi. Presentation “The role of mobile in scaling index insurance,”
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