Risk Transfer Strategy in Microinsurance Program at the

Village Business Model

Presented by: Brikson Pronatal

PT Asuransi Central AsiaJakarta – Monday, July 10, 2017

1. One of the risk mitigation measures risk transfer to 3rd party (insurance) having capacity, ability and experience in managing risk and paying compensation / insurance compensation to the victims of natural disaster.

2. The unfortunate side, help the unfortunate

3. Gotong royong a national scale “Arisan Bencana”

Mutual Cooperation-Gotong Royong

If Disaster Doesn’t HappenDisbursement money will be used:

1. To assist “Arisan Bencana” participants in other villages across Indonesia "zakat" to people who are unfortunate, or

2. As spare next year, to anticipate if any participants are hit by a disaster.

Definition of Microinsurance

SEOJK No. 9/SEOJK.05/2017 = Microinsurance Products and Marketing Channels of Microinsurance Products

“Insurance products designed to provide protection against financial risks facing low-

income communities. “

• SEDERHANA/SIMPLE• MUDAH/EASY• EKONOMIS/AFFORDABLE• SEGERA/SOON

Characteristics of Microinsurance Indonesia -SMES

Village Business Model • Starting in November 2016

• Location : Tiku Village, Kab. Agam, West Sumatera• Target Participant : Rural communities and SMEs• Agregator : Jemari Sakato Klinik UMKM• Education : With ToT will be given to Jemari Sakato. The

socialization for the villagers was done by ACA and Jemari Sakato.

• Total participants up to June 2017 : 380 Polis Stop Usaha Gempa Tsunami

Model of Cooperation ACA Study the risk profile in the village

ACA + Distribution Channel Choose Products

ACA provide Capacity Building

ACA + Distribution Channel Sign Agreement

Disaster Impact of the Disaster Microinsurance ProductFatalities Families lost income Personal Accident

Premium IDR 50.000 / year / person Compensation IDR 30.000.000

Small and medium enterprises

Sources of income lost, installment credit Bank Indonesia blacklist

Stop Usaha Gempa Tsunami / Erupsi Premium IDR 40.000 / year Compensation IDR 2.500.000

Dengue Fever Indirect costs due to hospitalized patientsreduced daily income, extra costs

Dengue Fever Insurance Premium IDR 50.000 / year Compensation IDR 2.000.000

Microinsurance for the Villages

Disaster Impact of Disaster Microinsurance Product

Residential buildings were destroyed by the earthquake

Families lose shelter and place of business

Dana Gempa Premium IDR 20.000 / year Compensation IDR 2.000.000

Residential buildings were destroyed by fires

Families lost their homes and places of business

Rumahku Premium IDR 30.000 / year, Compensation IDR 5.000.000/ building

Microinsurance for the Villages

Activation SMS customers in accordance with the format

specified by ACA

Flow of Customers Activation Via SMS

SMS format and PIN number is appropriate?

Customers receive an SMS notification that it has been

registered as Insurance Participant

Paticipants get SMS notification that the SMS /

PIN number format does not match

Yes

Finish

NoCustomers get micro

Insurance vouchers from distribution channels

Activation Process

Claim Process

Customers submits claim SMS to ACA Claim SMS successful

ACA Hotline will contact the customers

immediately to notify the claim document

ACA sends a rejection letter to the customers

Customers submits claim document

Finish

ACA analyzes the claim document rejected

accepted

ACA pays the claim benefit to the customers

finish

Flow of customers claim via SMS

Socialization and Education Activities

November 2016

Products

Conclusion the Role of Microinsurance in the Village

Preventing the sudden impoverishment of rural communities The transfer of risks to public costs through SME Clinics

THANK YOU