SWEDISH telecommunications and =insurance company Bima will provide micro-insurance products throughout Papua New Guinea as part of the Pacific Financial Inclusion Program (PFIP).
The partnership aims to deliver over 75,000 low-cost life and hospitalisation insurance policies to rural Papua New Guineans within two years; 50 per cent of which will be women and 90% of which will be in rural communities including the Highlands.
UN Resident Coordinator in PNG Roy Trivedy said insurance penetration as a percentage of gross domestic product in PNG was less than 2%, compared to the global average of 7.5%.
“Low-income households are not covered because of four major obstacles; education, distribution, pricing and premium collection,” he said.
“We are excited to support Bima, which we believe has a unique scalable business model capable of bringing affordable and accessible insurance to the Highlands Region”.
PFIP’s partnership and investment in Bima is made possible through the support of the European Union and the Australian Government, and through the commitment of the Bank of Papua New Guinea (BPNG) and its Governor, Loi Bakani, Bima said.
PFIP will also support Bima’s plans to establish a local presence in Lae, Mount Hagen and Madang.
This partnership will lead to the establishment of a more formal setup in Mount Hagen including an office, where training can take place and where agents can access computers to check the status of customers.
Increasing the number of agents in Mount Hagen makes it possible to reach more highland citizens rapidly, PFIP said, adding that it expected to recruit 2,160 new members per year per agent.
Bima will also provide education on insurance, prior to sales for less educated and isolated populations, who would not otherwise benefit from the awareness that Bima will create in Mount Hagen.
By insuring the low-income people of PNG, Bima aims to help households weather the impact that a death of a breadwinner can have on a family, particularly given the expense of funerals.
The life insurance product, which covers death and total permanent disability, is available at three different prices ranging from K4,000 with a K3.6 monthly premium to K12,000 with a K10.8 premium.
The hospitalisation insurance cover provides customers with a fixed amount of money for each day spent in hospital (from the second night), up to 30 nights over a 12 month period.
Coverage costs less than an SMS message per day, and hospitalisation insurance will allow families to seek preventive health care and insure vulnerable segments of PNG’s population.
This product will be available different prices with different cover levels with the vlowest monthly premium of K3.6 and the highest monthly premium of K10.80.