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  • The Landscape of Microinsurance in Asia and Oceania Arman Oza

    In Association with:

    Premasis Mukherjee

    Rupalee Ruchismita

    13 November 2013

  • Munich Re Foundation

    How do we define microinsurance?

    13/11/2013 2

    Individual

    Instt./Govt. co-

    contribution

    Partially Subsidised

    Fully Govt. Subsidised

    Individual

    Semi-formal Instt.

    Insurer

    Govt.

    CBO

    Community

    Risk Underwriting

    by

    Premium Contribution

    Informal Insurance

    Social Security

    How we define microinsurance : the new paradigm

    Microinsurance Social Micro

    insurance

    How practitioners define microinsurance: in terms of target

    clients

    Landscape of Microinsurance in Asia and Oceania

  • Microinsurance in Asia and Oceania

  • Munich Re Foundation

    Outreach

    172.8mn individuals/properties covered by

    MI in Asia and Oceania

    The 10 biggest MI countries contribute

    over 99% of the total MI coverage

    Higher coverage in South Asia: > 120 mn

    13/11/2013 4

    0

    20

    40

    60

    80

    100

    120

    0,3 1,1 1,3 2,5 5,3 9,3 9,4 11,9

    19,9

    111,1

    Fig. 1: 10 biggest MI countries (in coverage) [in Million]

    Box1: Key numbers

    31 countries participated 24 countries with microinsurance 216 providers with 500 products

    83.86 MM Life 27.96 MM Health

    77.83 MM Accident 7.67 MM Property

    26.2 MM Agriculture 4.65 MM Takaful

    Central 3,1%

    East 8,3%

    Oceania 0,01%

    Western 0,1%

    South East

    18.6% South 70,0%

    Figure 2: Regional outreach

    Landscape of Microinsurance in Asia and Oceania

  • Munich Re Foundation

    Number of covered people/properties by microinsurance

    13/11/2013 5 Landscape of Microinsurance in Asia and Oceania

    India 111.11

    Philippines 19.95

    China 11.85

    Bangladesh 9.37

    Pakistan 5.34

    Mongolia 2.46

    Indonesia 1.34

    Malaysia 1.09

    Nepal 0.34

    Cambodia 0.29

    Vietnam 0.16

    Sri Lanka 0.07

    East Timor 0.018

    Uzbekistan 0.013

    Lebanon 0.005

    Palestine 0.003

    Azerbaijan 0.001

    Bhutan 0.0007

    Kuwait 0.0002

    Oman 0.0002

    Thailand 9.31

    Fiji 0.003

    Jordan 0.091

    Kazakhstan 0.00

    Tajikistan 0.00

    Afghanistan 0.00

    Armenia 0.00

    Yemen 0.00

    Myanmar 0.00 Laos

    0.00

    Papua and New Guinea

    0.00

  • Munich Re Foundation

    Coverage

    The Philippines register highest coverage

    ratio (21.3%)

    Despite impressive outreach, MI coverage

    ratio in the continent is limited (4.36%)

    Including social microinsurance, coverage

    ratio is 48%

    13/11/2013 6

    0,00%

    5,00%

    10,00%

    15,00%

    20,00%

    25,00%

    1,5% 1,6% 2,1% 3,1% 3,5% 3,8%

    6,2%

    9,2%

    14,0%

    21,3%

    Fig.3: Top 10 countries on microinsurance coverage ratio

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    90%

    100%

    Fig. 4: Breakdown of total lives/properties covered by main risk type in regions

    Life Health Agriculture Property Accident Takaful

    Landscape of Microinsurance in Asia and Oceania

  • Munich Re Foundation

    Products and Premium

    13/11/2013 7

    -

    5

    10

    15

    20

    25

    30

    Num

    ber o

    f liv

    es/p

    rope

    rties

    co

    vere

    d (in

    Milli

    on)

    Fig. 6: Number lives/properties covered by region

    Central East Oceania Western Southeast South

    53.6 59.8

    19,6 15,3 9,2 10,9

    25,2 28,9

    0

    25

    50

    75

    Life Health Agriculture Property Accident Takaful

    USD

    Fig. 7: Dispersion of the average annual premium

    211 190 203.5 203.5

    Landscape of Microinsurance in Asia and Oceania

  • Munich Re Foundation

    Growth of microinsurance

    Period of study: 2010 -2012

    Compounded annual growth rates:

    31% growth in coverage

    47% growth in premium generated

    13/11/2013 8

    -50%

    0%

    50%

    100%

    150%

    200%

    Viet

    nam

    K

    uwai

    t B

    angl

    ades

    h O

    man

    C

    ambo

    dia

    Pal

    istin

    e S

    ri La

    nka

    Phi

    lippi

    nes

    Pak

    ista

    n Le

    bano

    n In

    dia

    Mon

    golia

    N

    epal

    C

    hina

    Fi

    ji In

    done

    sia

    Mal

    aysi

    a

    Fig. 9: Compound annual growth rate in coverage

    Others 1%

    India 70%

    China 15%

    Philippines 8%

    Mongolia 3%

    Indonesia 2%

    Bangladesh 1%

    Fig. 8: Contribution to the overall growth

    Coverage growth leaders:

    Malaysia (185%) and Indonesia (103%)

    India contributed up to 70% of the overall

    MI growth

    In terms of products, Accident insurance

    is the main contributor to the overall

    growth of the industry.

    Landscape of Microinsurance in Asia and Oceania

  • Munich Re Foundation

    Compound annual growth rate in coverage

    13/11/2013 9 Landscape of Microinsurance in Asia and Oceania

    India 31%

    Philippines 18%

    China 76%

    Bangladesh 7%

    Pakistan 19%

    Mongolia 54%

    Indonesia 103%

    Malaysia 185%

    Nepal 60%

    Cambodia 16%

    Vietnam -25% Sri Lanka

    17%

    Lebanon 23%

    Palestine 17%

    Kuwait -7%

    Oman 9%

  • Munich Re Foundation

    Microinsurance providers and delivery channels of microinsurance

    Regulated commercial insurer

    lead the sector.

    Most commonly used channels

    are member organisations, MFIs

    & insurance agents

    13/11/2013 10 Landscape of Microinsurance in Asia and Oceania

    0%

    20%

    40%

    60%

    80%

    100%

    Fig. 10: Distribution channels by risk types

    CBOs, mutuals other mem org Funeral parlours Churches Retailers MI brokers Employer Mobile MFIs, remittances, banks Spec/MI agents Conventional insurance agents

    7,7%

    10,1%

    8,6% 66,9%

    Fig. 11: Percentage of coverage by provider type

    Community-based Organisation Cooperative

    Government Agency

    Hospital

    Mutual

    NGO

    Other

    Parastatal Insurer

    Regulated Commercial Insurer Takaful

  • Microinsurance in Asia and Oceania : The un-ignorable social microinsurance

  • Munich Re Foundation

    Coverage and products

    13/11/2013 12 Landscape of Microinsurance in Asia and Oceania

    0%

    25%

    50%

    75%

    100%

    37,4%

    9,2%

    35,5%

    83,0%

    62,5%

    Fig. 15: Microinsurance coverage ratio of 10 top countries

    Microinsurance Including Social Microinsurance

    0

    200

    400

    0,1 1,0 2,2 10,5 15,0 38,5 45,8

    76,4

    316,6

    1.154,5

    Fig. 14: Top 10 countries with social microinsurance (in millions)

    Life 1,2%

    Health 90,9%

    Agriculture 7,8%

    Fig. 12: Type of social microinsurance schemes

    Life Health Accident Property Agriculture Takaful

    83,9

    28,0

    77,8

    7,7

    26,2

    4,7

    20,3

    1.510,1

    130,1

    Fig.13: Number of individuals/properties covered by risk type

    [in Million]

    Microinsurance Social Microinsurance

  • Microinsurance landscape > Global microinsurance index

  • Munich Re Foundation

    Microinsurance sector is influenced by business environment it operates in

    13/11/2013 14

    Microinsurance market as a derivative sector depends on Microinsurance Infrastructure

    Overall Business Infrastructure and Environment

    Reg

    ulat

    ory

    En

    viro

    nmen

    t

    Insurance Industry

    Microfinance Industry

    Microinsurance Sector

    - Development - Prospect - Possibilities

    Demography and Economy

    Political Environm

    ent

    Landscape of Microinsurance in Asia and Oceania

  • Munich Re Foundation

    Framework for global microinsurance development index

    13/11/2013 15 Landscape of Microinsurance in Asia and Oceania

    Business environment - Ease of doing business Study; 2012 - Global Innovation Index2012

    - Overall innovation index - Government effectiveness - Rule of law and regulation - Ease of starting business - R&D as % of GDP - Intensity of local competition - FDI as % of GDP

    Industry development - Insurance industry

    - Insurance Penetration - Insurance Density - Insurance Premium - Growth - Number of Insurers

    - Financial inclusion - % of adults having bank accounts - Microfinance loan as % of GDP - Score from global microscope - Growth in microfinance

    Microinsurance potential - Rural population - 50% of unorganised workforce

    Microinsurance regulatory feasibility - Regulatory capacity - Regulatory clarity - Promotion by regulator/govt.

    Microinsurance supply - Individuals covered - Premium collected

    3 4 5

    2 1

  • Munich Re Foundation

    Countries performance differs based on parameter

    13/11/2013 16

    Pakistan Indonesia

    Philippines Azerbaijan

    Vietnam India

    Thailand Mongolia

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