By Ted P. Torres
The Philippine Star
Updated March 30, 2010 12:00 AM
MANILA, Philippines - An international investment fund is planning to invest up to P1.1 billion (approximately $25 million) for microinsurance initiatives in the Philippines.
The P1.1 billion is part of a microinsurance fund amounting to $110 million (P5 billion) allocated for investments in businesses that are designed to deliver affordable insurance in Asia and Africa.
LeapFrog Investments is an investment fund that targets strong returns for its investors, tapping the estimated microinsurance market of 1.5 billion people in emerging markets.
Through its portfolio companies, LeapFrog aims to reach 25 million low-income and vulnerable people with essential financial services, 15 million of them women and children, providing protection against life’s tragedies the devastating impact of climate change, and thus ending cycles of poverty.
The fund will be converted into investments of P250 million to P700 million ($5 million to $15 million) and partner with local insurance companies, microinsurers, or businesses with significant distribution platforms that reach the mass market.
In addition to the Philippines, LeapFrog’s priority countries for investment include India, South Africa, Kenya and Ghana.
LeapFrog principal for East Asia Stéphane Chatonsky said that they are looking for partners with innovative insurance and financial services companies or Filipino businesses that own strong distribution platforms.
Chatonsky said that they are guided by the profit-with-purpose investment approach, meaning they manage funds that must earn strong returns for its investors, and at the same time, invest the funds in efforts towards poverty alleviation.
“We will partner with local players and bring to bear resources and our knowledge of global best practices, to ensure Commercial success and impact – supporting the provision of affordable and relevant microinsurance products and other financial products,” she added.
In an earlier interview, LeapFrog founder and president Andrew Kuper said that they would like to take microinsurance to the next level.
“The industry needs to be taken to the next level, both in terms of establishing a new asset class and in terms of demonstrating that microinsurance is a strong business and investment proposition. That success is the swiftest way to open the gates of the capital markets, and make a real dent on mass poverty,” Kuper said.
The three kinds of investment strategy are: investments made on an existing microinsurance company that needs substantial capital and operation guidance; joint venture and co-capitalizing companies with microfinance institutions (MFIs) and other large distributors; and, co-investment with an insurer that seeks to develop an insurance product and distribution network specifically to reach low-income markets.
“We can acquire a large stake in an insurer and help them drive products down the income pyramid,” the LeapFrog president added.
Roughly 70 percent of the Filipino population, or more than 65 million people, are classified as low-income. Yet they have sufficient funds to afford some form of insurance for their families and enterprises. Insurance can have a transformative impact on their lives and livelihoods.
The country’s penetration rate for insurance is still one of the lowest in the region.
That may change as taxes on insurance products have been reduced with the passage of Republic Act 10001, which lowers the premium tax on life insurance policies and fixes the rate of documentary stamp tax (DST).
Likewise, the Bangko Sentral ng Pilipinas (BSP) now allows thrift and rural banks to sell microinsurance products. That however must be differentiated from the traditional and complex life insurance and other financial products being sold by the commercial banking system.
The public and private sector recently signed the Microinsurance Innovations Program for Social Security (MIPSS), a comprehensive program “to improve the risk protection and security of poor people in the Philippines.” In general, that could be translated to microinsurance designed for the poorer sector of society, taking into account cheap insurance products and easy premium payment schemes.
The target for microinsurance is an estimate 1.5 billion vulnerable people in emerging markets. LeapFrog aims to reach 25 million low-income people with essential financial services, 15 million of them are women and children.
Recently, four global institutions have made commitments to LeapFrog. They are: the International Finance Corp. (IFC), the private investment arm of the World Bank Group, which committed $20 million; the board of the Soros Economic Development Fund, a $7-million investment. Flagstone Reinsurance, a global reinsurer, committed $12 million.
The KfW Entwicklungsbank and BMZ, the German Federal Ministry for Economic Cooperation and Development, made the largest single commitment worth $25 million
Sunday, December 12, 2010
Insurance fund eyes RP
Business World
March 30, 2010
AN international investment fund specializing in microinsurance is looking for local partners, noting the country’s large untapped market and the government’s promotion of the low-cost insurance product.
In a briefing last week, Stephane Chatonsky, principal of microinsurance fund LeapFrog Investments, said the firm has identified the Philippines as one of its key markets, and is willing to invest up to $25 million of the $110 million raised from various investors in the country.
Mr. Chatonsky said LeapFrog, founded in Luxemberg and maintaining offices in Australia and the US, chose the Philippines because of its attractiveness as investment destination.
“We chose the Philippines because of the stable macroeconomic environment and good potential for growth,” he said.
“The government has also realized [mi-croinsurance] is a good tool for poverty alleviation and it is pushing hard to get commercial insurers and non-profits to develop it.”
Mr. Chatonsky said LeapFrog is looking at investing in large insurance companies and developing their microinsurance products.
It may also invest in smaller firms that sell microinsurance, or tie up with microfi-nance institutions, church groups or telecommunication firms that serve as distribution channels for the products.
Mr. Chatonsky noted that 70% of Filipinos could be classified as “low-income” but can afford to buy insurance so the potential market for microinsurance is “huge.”
LeapFrog, in its website, claimed it is the “world’s first microinsurance fund.” It said it aims to bring financial services to poor people in India, Kenya, Ghana and South Africa, aside from the Philippines.
Its investors include the International Finance Corp. of the World Bank Group, the Soros Economic Development Fund of billionaire investor George Soros and Accion, one of the world’s largest micro-finance institutions.
Insurance Commissioner Santiago Javier Ranada welcomed the development.
“This will help low income groups. We appreciate them helping because as of now there is low coverage for the D and E income groups, especially in rural areas,” he said in a telephone interview yesterday. “Now, they can get insurance for business, life and health.”
Mr. Ranada hopes LeapFrog’s interest in the Philippines signals the start of investments into the local microinsurance industry.
“[Getting investors in the industry is really] the idea behind the release of rules on microinsurance, since people will be more willing to invest if they know the rules of the game,” he added.
Microinsurance, he pointed out, is a potential multibillion-peso industry, given the number of Filipinos belonging to the D and E classes who are without the protection insurance provides.
In January, the Insurance Commission (IC) issued a circular that amended Insurance Memorandum Circular (IMC) 9-2006, the previous order that governed the microinsurance industry.
The new circular states that all insurance firms, cooperatives, and mutual benefit associations licensed by the IC may sell microinsurance products, which may consist of one type, or several -- life, non-life and health -- bundled together.
It also requires microinsu-rance agents to be licensed by the IC, but they do not have to take regular licensure exam. Instead, they must undergo a special training program and pass a qualifying exam.
The circular also redefines microinsurance as those whose amount of premiums, contributions, fees or charges, computed on a daily basis, does not exceed 5% of the current daily minimum wage rate for non-agricultural workers in Metro Manila.
The maximum sum of guaranteed benefits should be not more than 500 times the daily minimum wage rate for non-agricultural workers in Metro Manila.
Mr. Chatonsky said that aside from providing funding, LeapFrog can provide expertise to help develop the country’s microinsurance industry.
“The big challenge is the distribution channel. It has to be really efficient. You have to reach the poor in a very cost effective way and... some insurers don’t know how to do it,” he said.
“We have done it in India and Africa. It was difficult but we have done it so we are bringing that expertise to the Philippines.”
Mr. Chatonsky said that while microinsurance is good business, it also benefits the poor.
“By providing microinsurance, we give people the opportunity to get out of poverty. This will allow them to manage risks through affordable and quality insurance policies so if something bad happens to them, they can continue to live their lives and accumulate assets,” he said. -- Don Gil K. Carreon
March 30, 2010
AN international investment fund specializing in microinsurance is looking for local partners, noting the country’s large untapped market and the government’s promotion of the low-cost insurance product.
In a briefing last week, Stephane Chatonsky, principal of microinsurance fund LeapFrog Investments, said the firm has identified the Philippines as one of its key markets, and is willing to invest up to $25 million of the $110 million raised from various investors in the country.
Mr. Chatonsky said LeapFrog, founded in Luxemberg and maintaining offices in Australia and the US, chose the Philippines because of its attractiveness as investment destination.
“We chose the Philippines because of the stable macroeconomic environment and good potential for growth,” he said.
“The government has also realized [mi-croinsurance] is a good tool for poverty alleviation and it is pushing hard to get commercial insurers and non-profits to develop it.”
Mr. Chatonsky said LeapFrog is looking at investing in large insurance companies and developing their microinsurance products.
It may also invest in smaller firms that sell microinsurance, or tie up with microfi-nance institutions, church groups or telecommunication firms that serve as distribution channels for the products.
Mr. Chatonsky noted that 70% of Filipinos could be classified as “low-income” but can afford to buy insurance so the potential market for microinsurance is “huge.”
LeapFrog, in its website, claimed it is the “world’s first microinsurance fund.” It said it aims to bring financial services to poor people in India, Kenya, Ghana and South Africa, aside from the Philippines.
Its investors include the International Finance Corp. of the World Bank Group, the Soros Economic Development Fund of billionaire investor George Soros and Accion, one of the world’s largest micro-finance institutions.
Insurance Commissioner Santiago Javier Ranada welcomed the development.
“This will help low income groups. We appreciate them helping because as of now there is low coverage for the D and E income groups, especially in rural areas,” he said in a telephone interview yesterday. “Now, they can get insurance for business, life and health.”
Mr. Ranada hopes LeapFrog’s interest in the Philippines signals the start of investments into the local microinsurance industry.
“[Getting investors in the industry is really] the idea behind the release of rules on microinsurance, since people will be more willing to invest if they know the rules of the game,” he added.
Microinsurance, he pointed out, is a potential multibillion-peso industry, given the number of Filipinos belonging to the D and E classes who are without the protection insurance provides.
In January, the Insurance Commission (IC) issued a circular that amended Insurance Memorandum Circular (IMC) 9-2006, the previous order that governed the microinsurance industry.
The new circular states that all insurance firms, cooperatives, and mutual benefit associations licensed by the IC may sell microinsurance products, which may consist of one type, or several -- life, non-life and health -- bundled together.
It also requires microinsu-rance agents to be licensed by the IC, but they do not have to take regular licensure exam. Instead, they must undergo a special training program and pass a qualifying exam.
The circular also redefines microinsurance as those whose amount of premiums, contributions, fees or charges, computed on a daily basis, does not exceed 5% of the current daily minimum wage rate for non-agricultural workers in Metro Manila.
The maximum sum of guaranteed benefits should be not more than 500 times the daily minimum wage rate for non-agricultural workers in Metro Manila.
Mr. Chatonsky said that aside from providing funding, LeapFrog can provide expertise to help develop the country’s microinsurance industry.
“The big challenge is the distribution channel. It has to be really efficient. You have to reach the poor in a very cost effective way and... some insurers don’t know how to do it,” he said.
“We have done it in India and Africa. It was difficult but we have done it so we are bringing that expertise to the Philippines.”
Mr. Chatonsky said that while microinsurance is good business, it also benefits the poor.
“By providing microinsurance, we give people the opportunity to get out of poverty. This will allow them to manage risks through affordable and quality insurance policies so if something bad happens to them, they can continue to live their lives and accumulate assets,” he said. -- Don Gil K. Carreon
Tuesday, November 30, 2010
Holiday Marketing For Insurance Agents That Will Bring You New Policies
The holiday season is the best time of year for retailers. They come in shares, will receive additional staff to recruit and prepare for an influx of customers. You can call their accountant and let them know that they are not in the red, because Black Friday comes. Retailers can easily to the loss of a display and the amount of lead, but how to do a professional service?
The insurance sector is regulated by the Department of Insurance. I do not have an insurance agent or broker who loves the Board of Directors saw. You can not insurance on the "sale" or a loss, it does not work like that! How to use the marketing frenzy for holiday insurance?
Before I make a killer in a few ways that your phone ringing, I invite you a few ideas, not that you will get to observe things.
Christmas *
* Calendar
* Notebook
Recipe Cards *
No one called her insurance agent, to supply add, because she had a pumpkin pie recipe! Stop as everyone else. Be different, bold and start selling more insurance companies. I invite you to the following methods to obtain more revenue policy during the holidays.
* Letter from vacation - not to do a letter. Send your past clients and prospects with a letter that has a story. The story should not last long, but it must be a "normal" days have gone wrong. Insurance helps in the worst days. to show a link in your story, like a holiday better than a "normal" days, and if something goes wrong (leaking roof, burst pipe, etc.) call them? Do they have adequate coverage for the direct effect? Bring them in pain and let them know that there is a problem.
* E-mail Holiday Video - It may not be complicated. No special software. Just do a simple video camera and YouTube account. Record a video 2-4 minutes on holidays and share a story of a client helped you. No, no sale, so they know you appreciate being able to help. You can make a call (a simple form on your site get them to do so) to act for a "tune-up insurance vacation" at the end.
Holidays are great for insurance agents. It offers a unique opportunity to generate attention and a chance for people to save money when they spend on gifts
The insurance sector is regulated by the Department of Insurance. I do not have an insurance agent or broker who loves the Board of Directors saw. You can not insurance on the "sale" or a loss, it does not work like that! How to use the marketing frenzy for holiday insurance?
Before I make a killer in a few ways that your phone ringing, I invite you a few ideas, not that you will get to observe things.
Christmas *
* Calendar
* Notebook
Recipe Cards *
No one called her insurance agent, to supply add, because she had a pumpkin pie recipe! Stop as everyone else. Be different, bold and start selling more insurance companies. I invite you to the following methods to obtain more revenue policy during the holidays.
* Letter from vacation - not to do a letter. Send your past clients and prospects with a letter that has a story. The story should not last long, but it must be a "normal" days have gone wrong. Insurance helps in the worst days. to show a link in your story, like a holiday better than a "normal" days, and if something goes wrong (leaking roof, burst pipe, etc.) call them? Do they have adequate coverage for the direct effect? Bring them in pain and let them know that there is a problem.
* E-mail Holiday Video - It may not be complicated. No special software. Just do a simple video camera and YouTube account. Record a video 2-4 minutes on holidays and share a story of a client helped you. No, no sale, so they know you appreciate being able to help. You can make a call (a simple form on your site get them to do so) to act for a "tune-up insurance vacation" at the end.
Holidays are great for insurance agents. It offers a unique opportunity to generate attention and a chance for people to save money when they spend on gifts
How to Become an Insurance Agent
Career choice is one of the most important decisions and largest adult might encounter. To the best decision, people need to take into account the hours, the type of work, and how their personality is a job. If a person likes to help people who have good social skills, communication and competence in the economy, can be a good option to an insurance agent.
Insurance is one of the most dynamic sectors in the United States provides security and decency. The first step in obtaining employment in this sector is to go to an accredited university. At school, the major objective of this study that the insurance companies are looking for economics. Graduates in this area is best suited for people who want to be an insurance agent.
After training is completed, work is an insurance agent on the potential of obtaining a license. Every state in the country has different rules and regulations relating to examination and approval. There are special courses and books, a prospective agent can help you purchase a license.
After completion of training and licensing of an insurance company, the next step will be set. In this new entry-level position, a person will be trained according to society's expectations and guidelines. After training is completed, has completed a person of this process and is now a fully fledged insurance.
Become an insurance agent is an excellent work for those who are helping people to enjoy difficult times. For an agent, obtaining a Bachelor of Business Administration certification and be ready for a period of rigorous training once a job has been reached. After these steps are completed, is a person, they have a great career in the new world of insurance.
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