KATHMANDU, Sept 27: The 21st AIRDC (Association of Insurers and Reinsurers in Developing Countries) Conference 2018 concluded in Kathmandu on Wednesday with calls to lower micro insurance premium.
Insurance experts participating in the conference said that high transaction cost has become one of the big challenges for the expansion of insurance business.
“Though premium for micro insurance tend to be relatively low, the transaction is high,” said Dirk Reinhard, vice chair of Munich Re Foundation -- a charitable organization founded by reinsurance company Munich Re. “Insurers should find a way out to reduce such cost so that they can become economically viable.
Chunky Chhetry, CEO of Sagarmatha Insurance Company Ltd, echoed Reinhard. He also said that regulatory pressure on providing micro insurance service could help in ensuring the coverage of low-income people. “While the micro insurance business has been largely driven by the regulatory requirement, most of the insurance companies are now seeing huge prospect on such services,” he added.
Some experts say that the partnership with other institutions like bank and financial institutions, malls and travel agencies can help in reducing the cost while also making the insurance process simpler and faster.
“Other institutions may have stronger network and reach which can be utilized by insurers to provide people micro insurance services,” said Lorenzo Chan, president of Pioneer Insurance Group of the Philippines.
Information and technology can be leveraged to make premium collection, and claim and settlement process simpler, affordable and faster, experts said.
“With less paperwork and doing instant everything from policy issuance to claim settlement to communications, digitization can help the insurance sector grow faster,” Jimmy Molyneux, senior vice president at the Head of Strategic Advisory Asia-Pacific at Guy Carpenter, said.
Over 400 delegates, including 88 foreign delegates from 20 countries, had participated in the conference that discussed on wide-range of issues related to building financial resilience, disaster risk financing, and insurance.