Improving Access to Insurance for the Poor (IfP) A pproach of the - - PowerPoint PPT Presentation

Microinsurance and Social Protection

Improving Access to Insurance for the Poor (IfP) – Approach of the World Bank (IfP) Approach of the World Bank

EUROPEAN MICROFINANCE WEEK 2008 EUROPEAN MICROFINANCE WEEK 2008 12th – 14th November 2008 Luxembourg

Vijayasekar Kalavakonda

Luxembourg

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Insurance for the Poor

The World Bank Washington DC

Microinsurance Coverage - Gl b ll Globally

Region Lives Insured Population Living on <$2/day Africa 3,478,096 Americas 7 800 238 Americas 7,800,238 Asia 67,221,169 ~2 BILLION s a 6 , , 69 O Total 78,499,503 4 BILLION

Source: The Landscape of Microinsurance in the World’s 100 Poorest Countries, April 2007

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Countries, April 2007

The Challenge The Challenge

ATLEAST 1 Billion Covered Lives – By 2015

How do you?

100 illi C d Li TODAY <100 million Covered Lives – TODAY

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Characteristics of the Target M k t / P l ti Market / Population

Unorganized, informal sector and

predominantly rural. p y

Access to abundant and cheap labor i.e.,

Social Human Capital Social Human Capital

Distrust the market BUT have limited

choice

Pay a huge “POVERTY PENALTY” Pay a huge POVERTY PENALTY

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Constraints of Developing Mi i M k t Microinsurance Market

DEMAND SIDE ISSUES SUPPLY SIDE ISSUES DEMAND SIDE ISSUES SUPPLY SIDE ISSUES

Lack of AWARENESS (i.e., education) A need to demystify insurance products & services including policy terms. Lack of TRUST (i.e., poor experience of dealing with insurance companies in the past) A need to simplify CLAIMS SETTLEMENT PROCESS including documentation for claims processing. AFFORDABILITY (mismatch between ability-to-pay and price of insurance product) High TRANSCATION COSTS (i.e., need for lowering the cost of distribution and claims processing/settlement from an average of $8 p ) p g g per policy to less than 25-50 cents per policy) Off-the-shelf product(s) do not meet the NEED (i e lack of customization of product Lack of investment in PRODUCT DEVELOPMENT NEED (i.e., lack of customization of product to address the needs of the Poor) DEVELOPMENT Regulatory constraints

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The WB role in insurance for the poor p

Developing business models

Microeconomics of providing insurance and risk

related services to the working poor households

Promoting market development programs

Developing market-based risk funding systems that

can be scaled up

Threefold approach

Investments in building market infrastructure

T h i l i t i d l i d t

Technical assistance in developing new products Integration into social protection approach

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The World Bank’s Approach

Developing New Business Models

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Moving towards a public-private-people t t hi (PPP) sector partnership (PPP)

Th bli t t b th b t

The public sector may not be the best

manager of financial services…

• But insurance for the poor is unlikely to be

…But insurance for the poor is unlikely to be

scaled up without government support

Public-private partnership

Public private partnership

Delivery of agriculture and health services to the

working poor P i b idi t th b l th t li

Premium subsidies to those below the poverty line

Private – people sector partnership

Leveraging Social Human Capital to build “TRUST” Leveraging Social Human Capital to build TRUST

and “LAST MILE CONNECTIVITY”

Lowering the TRANSACTION COST

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Leveraging People Sector Leveraging People Sector

Increasingly development will need to be

delivered on a co-production mode

PPP has a new “P” for people

Public Sector Private Sector People Sector

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THE PEOPLE SECTOR

Hypothesis: The supply side (both public and private) Hypothesis: The supply side (both public and private) cannot be made more efficient in helping the poor unless it’s in the context of an p

• rganized demand

P i i l H l iti h l th l t dd Principle: Help communities help themselves to address

Government failures

Market failures

Market failures

Rationale: Poor people have a huge untapped potential Rationale: Poor people have a huge untapped potential

For public sector - Largest voting bank For private sector - Largest potential market for products and

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services

THE PEOPLE SECTOR THE PEOPLE SECTOR

Strategy: Strategy:

Gaining Voice

Reaching Scale

Reaching Scale

How: 1 The software: Build institutions OF the

• 1. The software: Build institutions OF the

poor (vs. institutions FOR the poor)

Organization, social capital, capacity building

g p p y g

Irrespective of whether it is for public or private goods

• 2. The hardware: Put assets in the hands of

l poor people

providing opportunities for income generation Income will strengthen the “voice”

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Income will strengthen the voice

The Software The Software

☞ Groups organized around a strong common purpose (social cohesion and/or economic incentive) ☞ Strong inclusion and (self) targeting methodology – beware of risks of elite capture gy p ☞Use scale to develop a market and leverage access to financial services (incl insurance) access to financial services (incl. insurance), access to markets and service providers (crowding-in) (crowding-in). ☞ Foundation for local governance and accountability

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accountability.

The Software – The graduation d l model

Franchising R t ili Trade Community t i Retailing Commodity Cooperatives Federation of User Groups Marketing services Banking Savings & Loans Coops Trade enterprises p p Loans Coops Different levels of associative tiers Different levels of associative tiers Affinity-based Savings and Loans Activity-based Assets/marketing Resource-based Irrigation, Watershed, forestry

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g Watershed, forestry

The Case of Andhra Pradesh (INDIA)

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Institutional Building Structure st tut o a u d g St uctu e

Z S

Zilla Samakhya District MS

1069

Mandal Samakhya Block VO

34,269

y Vill O i ti Vill Self-Help Groups Village Organization Village

10 – 15 members SELF SELECT to form a SHG 7,08,313 > 8 million women members

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State Level

Livelihoods Of the Poor

ECO NO MIC DIMENSIO N ECO NO MIC DIMENSIO N SO CIAL DIMENSIO N SO CIAL DIMENSIO N

• Thrift
• Credit
• Empowerment of Community
• Education
• Health
• Credit
• Bank Linkage
• CIF

Li lih d

• Health
• Tackling Social issues like

child marriages.

Ri k Miti ti

• Livelihoods
• Risk Mitigation
• Safety Net through insurance

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Insurance and Social networks of the poor

• Tie up with an Insurance Company
• Nodal Agency for the scheme
• Maintain data base and Call Centre
• Issue Certificate of Insurance/Bonds
• MIS
• Capacity building of its staff and community
• Pay out solatium within 24 hours through
• Bima Mitras

ZS

• Planning and Monitoring
• Training of VOs

MS

• Claim documentation
• Office bearer is member of Area Committee
• Member education
• Enrollment
• Collection of premium

VO

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Insurance for the Poor

• Reporting claims
• Facilitate documentation of claims

SH Gs SH Gs SH Gs SH Gs SH Gs SH Gs

Comparative advantages p g

Insurer CBOs Insurer CBOs

• Provide risk cover
• Enrollment
• Provide risk cover
• Training of CBOs
• Enrollment
• MIS

g

• Claim Settlement
• Claim documentation
• Part settlement

within 24 hours

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Insurance for the Poor

Self Management - Modus Operandi g p

1.

Call Center- a hub of all the community based insurance community based insurance interventions are carried out by the community are established in all the 22 Districts with IT support. It functions all through the 365 days. It g y is well equipped with computer connected to the web portal, human resources like a Manager, Operator and an accountant. 2. During the awareness and enrollment the insured family members are educated about call centers and i th C ll C t Ph N b given the Call Centre Phone Number to inform at the Center of any causality immediately. 3 Bi Mi h S i l i l 3. Bima Mithras: a Strong social capital are selected, trained and positioned from among the SHG members to deliver the insurance services to the community

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community.

Bima Mithra

• Bima Mitra, a human social capital

and providing last mile connectivity is trained to providing last-mile connectivity, is trained to provide quick and quality services to the insured families.

• Is provided with a cell phone, a Bank

Account with ATM Card facility.

• When she gets a call, she will inform the

respective Mandal Samakhya Sub- committee member to accompany her to y the village for processing the claim.

• Bima Mitra is paid Rs.100/- (US$2) for each

claim settlement and actual TA.

• Similarly,

the (Area) sub-committee

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members also is paid

Claims process and settlement mechanism at a glance mechanism at a glance

Claim village Call Centre located in ZS Phone Phone Payment of Solatium in the Claim village to the nominee Bima Mithra & One Committee Member ATM Visit

• Area Committee member completes claim documentation and sends to Call Center

wherein the documents are processed and send then electronically to LIC

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Claim Settlement process

Step.8.And finally MS goes to the bereaved family and hand over the DD through VO. (2 days) Step.7. ZS shall prepare a DD in favour of

• nominee. (2 days)

Step 6

LIC ifi th l i & it th A t

• Step. 5. Call Centre Operator Scans the documents and upload into

the web portal (1 day)

Step.6.

LIC verifies the claims & remits the Amount depending on the type of death to ZS Account. (4 days)

Step.4. ZS Sub-committee with the support of Anchor Person verifies the

documents and hand over to the Call Centre Operators (1 day) the web-portal. (1 day)

Step.3. Bima Mithra collects the Certificates and sends the Claim forms with all the

required Certificates to the Call Centre. (3 days)

Step.2. Bima Mithra visits the village within few hours, confirms the death and pay initial solotium of $111.

Brief them the procedure of preferring the claim. The MS members who accompanies Bima Mithra shall follow up for early submission of the documents (6 days)

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Step.1. The operator at Call Centre received the call about death, confirms the death through verify the bond number in

web site and directs the “Bima Mithras” to visit the family and provide the required services.

CALL CENTRE MANAGEMENT SYSTEM

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CLAIMS MANAGEMENT SYSTEM

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FUTURE STRATEGY – Andhra Pradesh

By 2010 By 2010

1.

Ensure insurance coverage to all the SHG members and their spouses and landless laborers p in the state of AP (18 million).

• 2. 6 million SHG women shall be covered under

loan / Credit Insurance in addition to the Social loan / Credit Insurance, in addition to the Social security net.

• 3. By 2010 Cattle insurance will be universalized to

all the Districts in Andhra Pradesh State covering all the Districts in Andhra Pradesh State covering around 10 million CATTLES.

• 4. Community managed health insurance which is

y g currently piloted in 2-3 Districts to be Universalized by 2010 – 12 insuring more than 30 million lives.

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Future Strategy - GLOBAL Future Strategy GLOBAL

Province/ Country Targeted Loan Size Province/ Country Targeted Beneficiaries Loan Size

A.P. (India) + 8 million US$300 mn M.P. (India) + 5 - 7 million US$350 mn (Estimated) T.N. (India) + 3 million US$140 mn Bihar (India) + 0.5 million US$70 mn N.E. (India) +1 – 2 million US$200 mn (Estimated) Sri Lanka + 1 million US$200 mn (Estimated) Sri Lanka + 1 million US$200 mn (Estimated) Tanzania + 2-3 million US$250 mn (Estimated) Northern UGANDA + 1-2 million US$100 mn Northern UGANDA 1 2 million US$100 mn

There are more than 15 – 20 similar such projects being implemented across the World

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being implemented across the World

Thank You

VKALAVAK@WORLDBANK.ORG Tel: +1 202 458 4624 Tel: +1 202 458-4624

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Role of Zilla Samakaya

• The ZS (SHG federation at District) is responsible for the day to day
• The ZS (SHG federation at District) is responsible for the day-to-day
• peration of the Scheme. The duties will include, Ensure service

standards at NWH for hospitalization and Diagnostics

• Maintaining member database
• Arrange for cashless treatment for the beneficiary in Network Hospital

by issuing pre-authorization

• Claims Processing and settlement
• Maintenance of accounts
• Generation of periodic report on utilization (statistics)
• Administer the scheme, by setting up Account and medical audit system
• Appoint required manpower to monitor, manage and maintain the

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scheme.

The Team

Case Manager

The Team

Case Manager 1. Coordinating the referral system of the patient 2. Regularly visit the Network Hospitals at least once a week and ensure that the terms and benefits of the scheme are being properly followed. 3. Interact with the beneficiaries of the scheme 3. Interact with the beneficiaries of the scheme undergoing treatment for feedback. 4. Inform the Implementing Agency (ZS) about any f d f ll i k non-conformance and follow-up on action taken. 5. Collate data and statistics from network hospitals on the scheme every week end and Submit it to the ZS y 6. Randomly verify the operated cases for authenticity

• f the members.

7 V if th th ti it f i d f

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7. Verify the authenticity of every case received for pre-authorization and submit report to ZS.

Medical Officer Responsibility:

• Approval of Preauthorization based on necessity of treatment
• Liaison with NWH
• Quality monitoring of service providers

Cl i P

• Claim Procss

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Process of Availing Treatment

STAR T Beneficiary approaches CM T CM explains scheme Beneficiary goes Network hospital with ID Card, Receipt Admission for treatment Free OPD Consultation Intimation to ZS by NWH Pre-Authorization- Investigation Special rates CASHLESS Hospitalization from ZS

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Insurance for the Poor Member signs on the Claim Form Discharge

Receive of Intimation from Hospital START

Pre-Auth Process

No Hospital

• Eligibility Verification

ID card/Receipt Letter of Rejection to Yes ID card/Receipt,

• Medical verification

Hospital Data entry into Software Complicated cases Complicated/Ge neral/ Exceptions Sent to CM/VO for verification General Exceptions Sent to Hospital for supporting reports Eligibilit y Eligible Authorization letter to hospital Medical Officer gives Authorization NO

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Insurance for the Poor STOP Letter of Rejection to Hospital Authorization letter to hospital

Claim Process Claim Process

Th Cl i F f th H it l h ld b i d The Claim Form from the Hospital should be accompanied Photocopy of the I.D. Card Original claim form with the signature of the beneficiary. Final split up bill with the signature of the beneficiary Final split – up bill – with the signature of the beneficiary raised in the name of “Sanjeevani.” O i i l th i ti i d b I l ti Original authorization issued by Implementing agency Original discharge summary Operation Note from treating Doctor (Incase of surgery) Original Investigation and Lab Reports

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Original Investigation and Lab Reports List of consumables prescribed

Claims Flowchart

Receipt of claims From NWH Communication To Hospital Document verification Complete Incomplete Claim ID Generation Medical Scrutiny and Claims Processing Complete Approved Claims Claim pending for supporting Documents Communication To Hospital Submitted To Trust (Weekly) Letter Of Settlement To he Bank By ZS World Bank Group World Bank Group

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Outward Collection of DD Dispatch o hospital

Process of Reimbursement to Process of Reimbursement to NWH

Claims checked for required documents

Medical scrutiny of the Claim by ZS medical officers y y Submission of the statement of processed claims to the ZS Management committee for release of funds. ZSMC sanctions the release of funds Sanction Letter submitted to the ZS Bank for DDs in Sanction Letter submitted to the ZS Bank for DDs in the name of the Hospitals. DDs dispatched to the Hospitals DDs dispatched to the Hospitals

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