Creating an enabling environment: Lessons from a decade of - - PowerPoint PPT Presentation

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Creating an enabling environment: Lessons from a decade of - - PowerPoint PPT Presentation

Feb 12, 2024 140 likes •308 views

Creating an enabling environment: Lessons from a decade of proportionate regulation Session hosted by the A2ii 12th International Microinsurance Conference Colombo, Sri Lanka 16 November 2016 State of inclusive insurance regulation 2016

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Creating an enabling environment: Lessons from a decade of proportionate regulation

Session hosted by the A2ii 12th International Microinsurance Conference Colombo, Sri Lanka 16 November 2016

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AFRICA CIMA Ethiopia Ghana Mozambique Nigeria Tanzania LATIN AMERICA Brazil Mexico Nicaragua Peru Venezuela ASIA Cambodia China India Nepal Pakistan Philippines Taiwan

Implemented 18

AFRICA Egypt Kenya Malawi Lesotho Namibia South Africa Swaziland Tunisia Uganda Zambia Zimbabwe LATIN AMERICA Belize Bolivia Colombia Costa Rica El Salvador Guatemala Honduras Jamaica ASIA Bangladesh Indonesia Mongolia Pacific Fiji

Under development

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State of inclusive insurance regulation 2016

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State of inclusive insurance regulation 2009

India China Philippines Taiwan Peru Mexico

Implemented 6 Influenced by:

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State of inclusive insurance regulation

Implemented 18 Under development

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Peru: Multiple lessons and revisions to make it work Ghana: Qualitative opt-in approach India: Strong hand Philippines: Multi-pronged comprehensive framework Colombia: No MI-specific regulation

~15% ~10% ~29% ~9% ~29% Coincided (not causality) with strong growth of microinsurance

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Proportionate regulation: Balance consumer protection and market incentives/development Consumer protection Provide market incentives

Easier to understand Easier to transact Easier to claim Proportionate regulation Improved product simplicity   Entry costs   Ongoing costs  Proportionate reporting (not necessarily easier)  market by enabling better distribution  Embracing technology

Proportionate regulation: protecting the consumer and incentivizing the market

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 Balancing consumer protection  Rational approach to disclosure  Flexible approach to distribution  Definition

What IS inclusive insurance?

Key elements of inclusive insurance framework

 Enabling regulatory treatment

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The impact of proportionate regulation in Ghana and how NIC’s role and philosophy has changed over the years

International Microinsurance Conference Colombo, Sri Lanka 15TH - 17TH NOVEMBER, 2016

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Impact of Proportionate regulation

  • Proportional regulation mainly applied on;
  • Product development and
  • Distribution channels

Impact Over 30 products About 7.5 million lives covered (about 29% of population) 15 MI Providers

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Beyond Regulation

  • The NIC has been involved in
  • Market development
  • Consumer Education (movies, logo, jingles)
  • Capacity Building
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Relationship with the Industry

  • Consultation
  • Active involvement
  • Actuarial capacity building
  • Insurance awareness
  • Microinsurance incentive survey
  • Simplify MI product approval process
  • Lower supervisory charges
  • More liberalization of distribution channels
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The end

Thank you for your attention

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Philippines: The Role of Proportionate Regulation

  • n Microinsurance

Lorenzo O. Chan, Jr. Pioneer Life Inc

November 16, 2016

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Issuance of First Circular on Microinsurance Most microinsurance products (2006 -20009) were credit life Launch of Regulatory Framework for Microinsurance Implementation of performance standards for microinsurance (SEGURO) Approval of simplified Agent Training and Licensing Implementation of Alternative Dispute Resolution for Microinsurance (ADReM) Revised definition of microinsurance in terms of premium and benefit amount Micro Pre-Need Regulatory Framework Agriculture Microinsurance Regulatory Framework Adoption and Implementation

  • f the Enhanced

Microinsurance Regulatory Framework Health Microinsurance Regulatory Framework

Implemented Regulation

2006 2009 2010 2011 2013 2015 2016

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Microinsurance Industry

2012 2013 2014

25% 68% 77% 75% 32% 23%

Enrolments – Total Industry

Microinsurance vs. Non-Microinsurance

17,481,254 12,580,106 8,454,932

Companies with MICROINSURANCE Business

18 out of 67 Non-Life 24 out of 27 Life

Average Share of Micro Premiums to Total Net Premiums Written (2012-2014)

2% Microinsurance

2012 2013 2014

4.226.460 4.700.434 7.584.573 4.228.472 7.879.672 9.896.681

Enrolments – Micro Only

Life vs Non-life

50% 50% 37% 63% 43% 57%

Source: IC Presentation of 2014 data (latest available)

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Microinsurance Environment

  • Solvency and Stability
  • Efficiency
  • Governance
  • Understanding of the product by

the client

  • Risk Based Capital Ratio
  • Outreach

Faster Product Approval Flexible pricing, not subject to tariff Set Performance Standards for Microinsurance (SEGURO)

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Thank you!