Regional Workshop on Access to Insurance for the Poor What is the role of the reinsurer?
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Stefan Mosel Rio de Janeiro, Brazil May 2007 Regional Workshop on Access to Insurance for the Poor What is the role of the reinsurer?
description
Regional Workshop on Access to Insurance for the Poor What is the role of the reinsurer?. Stefan Mosel Rio de Janeiro, Brazil May 2007. Relationship between reinsurance and microinsurance. Reinsurance Insurance for insurers. ?. Microinsurance Insurance for people with low incomes. - PowerPoint PPT Presentation
Transcript of Regional Workshop on Access to Insurance for the Poor What is the role of the reinsurer?
Stefan MoselRio de Janeiro, BrazilMay 2007
Regional Workshop on Access to Insurance for the Poor
What is the role of the reinsurer?
Lazaro Pellon Ines - Munich-MR
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Relationship between reinsurance and microinsurance
ReinsuranceInsurance for insurers
Microinsurance
Insurance for people with low incomes
?
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Traditional functions of reinsurance
Functions of reinsurance (summary) Relevant for microinsurance
To limit annual fluctuations in claims experience ()To be protected in the event of disasters (covariant risks) Substitute for own capital (capacity)
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Reinsurance is necessary for property microinsurance and catastrophic risks
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Mass business
Importance of training
Premium per policy is small
Simple, intelligent processes
Problemof fraud
Informality
Naturalcatastrophesaccumulation
Highly vulnerableclientele
Propertymicroinsurance
Features of property microinsurance
Assuming and diversifying
catastrophe risks is one of the reinsurer’s
main tasks
Reinsurance facilitates rapid
growth(surplus relief)
The reinsurer will accept microinsurance business only if it
knows and approves the processes (IT, sales, underwriting, loss adjustment, etc.)
Adapted pricing models are needed that take account of
the high vulnerability!
But: the portfolio, or rather the total premium produced, is large where thousands of people are
insured
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Access to reinsurance for microinsurance schemes – Principal requirement
Economic sustainability The clientele and their property are more vulnerable than in the case of traditional insurance.
In relation to the sum insured, the premiums for microinsurance are higher than in the case of traditional insurance.
Traditional property insurance
Sum insured : USD 100,000 / Deductible 2%
Commercial rate : 3 per mille
Annual premium : USD 300
Monthly premium : USD 25
Property microinsurance
Sum insured : USD 6,000 / Deductible 2%
Commercial rate : 9 per mille
Annual premium : USD 54
Monthly premium : USD 4.5
Example:
The microentrepreneur is only interested in
the premium in absolute terms!
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Munich Re and microinsurance
Microinsurance of persons (Life) : There is generally great uncertainty about the technical bases (mortality and morbidity) for this economic sector.
Property microinsurance (Non-Life): Property microinsurance is different from traditional products as regards both its structure and the sales and loss adjustment processes. Given that the property of these clients is very vulnerable, the rating of this business differs from traditional business.
With its worldwide microinsurance projects, Munich Re provides support with product development, pricing, underwriting processes and, above all, proportional capacity in order to facilitate rapid and profitable growth.
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Contact persons
Stefan MoselHead of Latin America South Department
Andreas MoserMember of the Innovative Solutions Team
Latin America and the Caribbean
