“If you want to clear a room, just tell everyone you work in insurance.”

This was the opening word of Lorenzo Chan, Jr., president and CEO of Pioneer Inc. and co-founder of CARD Pioneer Microinsurance Inc. (CPMI) in the book “Covering Nanay: the Philippine Microinsurance Journey.”

It may have been written in jest, but it’s a painful truth to many hardworking insurance agents, including the CPMI Microinsurance Coordinators (MIC) and Microinsurance Supervisors (MIS) who engage millions of enrolled clients for their various microinsurance products.

But in a country where more than half of the population is classified as low-income, insurance is a real need, and can give you a financial cushion in case of an emergency, and can also determine the survival of your family when the unexpected happens.

Can microinsurance empower the poor?

In its handbook on microinsurance, the Insurance Commission refers to Section 187 of Republic Act No. 10607 to explain microinsurance: it is defined as “a financial product or service that meets the risk protection needs of the poor where: (a) The amount of contributions, premiums, fees or charges, computed on a daily basis, does not exceed 7.5% of the current daily minimum wage rate for non-agricultural workers in Metro Manila; and (b) The maximum sum of guaranteed benefits is not more than one thousand (1,000) times of the current daily minimum wage rate for non-agricultural workers in Metro Manila.”

These benchmarks are necessary to ensure that microinsurance premiums are within reach for the low income and that the insurance company will be able to sustainably pay the claims.

But when one is barely making ends meet, sometimes unable to have 3 meals a day, can she or he afford microinsurance?  The book co-authored by Chan and long-time microfinance champion Dr. Jaime Aristotle Alip proved one case study after another that the poorer you are, the more you cannot afford not to have financial cover.

Selling insurance in “sachet-prices”

Chan, also the chair of the Microinsurance Network, was inspired to create microinsurance after seeing small sachet products in sari-sari stores. “Why not offer insurance in affordable chunks?” he thought. This led to the partnership with Dr. Alip’s Center for Agriculture and Rural Development Mutually Reinforcing Institutions (CARD MRI) and the establishment of CPMI, the country’s first non-life company specifically created to address health and accident, damage to property and agriculture as well as income loss arising from fire, calamity and other climate-related challenges of the low-income sector.

But turning his epiphany into a sachet-priced microinsurance product was not easy.  The book raised the question: “How could you fit a meaningful amount of coverage for property damage, accident, and burial assistance, into a product worth P250?”  Chan and his team made the impossible possible, and soon CaMIA Paid (Card MRI Insurance Agency Package Assistance in Case of Disaster) was born.  While the price tag may seem affordable to most, they are selling to a market where every peso counts, so the sales challenge ahead was another uphill battle.

Making it as simple as 1-3-5

According to Dr. Alip: “The key in addressing the protection gap is to disrupt the normal time frame in releasing insurance claims by targeting 1-3-5 which is ideally one (1) day to pay the policy holder, three (3) days if there is need to address any possible issues, and maximum of five (5) days to release the pay-out or decline. This was next to impossible for insurance companies at that time, but Pioneer agreed to implement this disruptive process.”

The execution of 1-3-5 was crucial in gaining the trust and confidence of the Nanays to prove that they can get their benefits as fast as possible during a time of need.

Nanay is a familiar word to all of us, one that evokes mostly positive feelings with both speaker and audience. But in the world of microfinance, when we speak of Nanay, the word takes on almost a superhuman context.  More than just the maternal pillar of the family, she wears many hats, maybe too many.  She is the family cook, even the handyman, the tutor, the dispenser of justice when siblings argue, the entrepreneur that can make extra cash to provide for everyone’s needs, and an all-around problem solver.

So when you empower the Nanays with microinsurance, you are empowering the whole family, even the whole community.

Building a mutually beneficial grassroots partnership

From the book, CPMI’s success became set in stone when it saw Nanays as not only clients, but also its partners for growth in microinsurance.

Dr. Alip recalled: “We recruited Nanays to offer microinsurance to other Nanays in communities with the promise of delivering 1-3-5. When the Nanay policyholders saw that CPMI was really committed in fulfilling 1-3-5, word started to spread and we won the trust and confidence of the Nanays and their clients.”

It was not easy to convince the Nanays to become CPMI MICs or MIS.  Some are content with their micro businesses, and did not see how they could train to sell what seemed to be a technical product.  But today, Lota Siasat, Mary Jane Galleno, and Reynalyn Velasquez, some of the Nanays who were featured in the book, can only be grateful that they said yes.

As an MIS, Siasat shared: “When I wake up in the morning, my first thought is about how to help my MICs because I want to be an inspiration to them. I tell them that they might one day be a Microinsurance Supervisor like me and experience how to earn and how to help others.”

Galleno narrated the value of financial protection in times of need with reference to a client’s family. “When the bereaved husband flew back home, he was surprised to learn that because of his wife’s insistence on taking out the coverage in secret, the family could claim substantial benefits. The husband was so thankful because their money had been drained by the hospital bills and they hardly had any more left for the funeral service.”

Velasquez recounted another claim story, “My decision to continue pursuing this career is not based wholly on incentive but respect. That respect comes from grateful families who have benefitted from CPMI coverage, including that of a member’s husband who first turned down our products. As a construction worker on a per-project basis, he felt it was an extra expense he couldn’t afford. But because I patiently took him through the advantages of the policies, he finally enrolled.  Six months later, he died in an accident. The family was able to claim P60,000 and they were grateful because they did not have to borrow money for burial expenses and still had some funds left to support them as they started a new life without him.”

Celebrating with microfinance peers

While the book had been introduced in June, and available in Fully Booked stores, it was officially launched with the microfinance community at the 25th anniversary of the Microfinance Council of the Philippines (MCPI), marked with a two-day conference on August 15 and 16, 2024 at the Manila Hotel.

The MCPI conference is an annual event that brings together key microfinance stakeholders to discuss important developments and relevant issues affecting the sector. This year, MCPI’s conference theme is Celebrating 25 Years of Responsible and Inclusive Finance.

MCPI Executive Director Allan Sicat shared: “I commend the book on how it focuses on Nanays – the heart of why microfinance and microinsurance exist.  The partnership between Pioneer and CARD is a good example of how like-minded institutions and individuals can empower more Filipino women through financial services.”

The last thing I wanted was to come home from another conference with another book.  But for the Nanays, whose stories never fail to inspire me, I waded through over 200 pages and came out on the other side grateful for women and men who dream of better lives not just for themselves but for their families and communities.

Covering Nanay may be about micro insurance, but there’s nothing micro about it – it’s a big book that deserves reading by anyone who has the heart to make a difference.