Report 14th International Microinsurance Conference 2018
Parallel session 15
Creating access to trusted inclusive insurance
By Kay Tuschen
Credit Shield+, BRAC, Bangladesh
This session summarised approaches to inclusive insurance solutions that are both well-funded and trusted by customers. “Credit Shield +” is a bundled credit life insurance offered by BRAC in Bangladesh. FijiCare is serving one of the most scattered markets in the world. And Allianz X has just increased investments in the FinTech and microinsurance sector globally.
Number of people insured: 560,000
The general concept of bundled credit life insurance is to sell a life insurance policy together with credit. The insurance covers the outstanding loan in case of death of the borrower. In some cases, funeral costs and payouts for relatives are also covered. Premiums are often paid through revenues from interest rates. Bundling insurance borrowers need The Bangladesh Rural Advancement Committee (BRAC) is one of the largest NGOs in the world, covering more than 5.6 million households with life insurance, microcredits and savings products. Nevertheless, microinsurance penetration in Bangladesh is around 10 %. BRAC has set a goal of increasing this level with innovative products.
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Insured risks: Loan & savings, funeral Premium range: BDT 3 (US$ 0.035) to BDT 7 (US$ 0.083) per thousand BDT per annum To create the “Credit Shield +” product, it followed the approach of understanding the risk first. One of the main limitations of typical credit life products in Bangladesh is that only the borrower is insured. In many cases, women in households take up a loan which is then redistributed among family members. Repayments originate from the household head’s earnings. If this person dies, typical insurance policies would not cover it. So one of the features of “Credit Shield +” is that it covers not only the borrower but one additional person per household.
BRAC is applying this customercentric approach because people have to perceive the product as a gamechanger in their lives, as a way out of the poverty trap. Another example of BRAC’s client proximity is the claim handling system. Through its mobile phone app, pictures of an ID card and a death certificate can be submitted, and funeral costs are paid within one day. Insurance for the Fiji Islands With 900,000 people living on 300 islands in the middle of the South Pacific, the Fiji Islands may be one of the most scattered markets in the world. To provide inclusive insurance for the islanders, a smart and innovative approach is needed. FijiCare has taken up the challenge. Its bundled insurance cover has a combined limit of US$ 10,000 (US$ 1,000 for funeral, US$ 3,000 personal accident, US$ 3,000 term life and US$ 3,000 fire damage). The Fiji government and farmers’ unions have become the biggest customers of FijiCare policies. By the end of October 2018, around 120,000 people were insured, more than 100,000 of them working for the government. The unions are currently paying the premiums for their employees and members. FijiCare Number of people insured: 120,000
81 — Left to right: Denis Garand, Denis Garand and Associates, Canada; Peter McPherson, Managing Director, FijiCare Insurance Limited, Fiji; Oliver Ullrich, Senior Business Development, Allianz X, Germany 82 — Monirul Hoque, Deputy Manager, BRAC, Bangladesh 81
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Insured risks: Funeral, accident, term life, fire
