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ABOUT MIME
INAFI Bangladesh, in collaboration with Stromme Foundation, is implementing a pilot social security project MIME supported by Oxfam-Novib and Rabobank Foundation. The project is being implemented based on mutuality concept with active participation of 11 NGOs with an objective of pooling the risk of vulnerability of the poor people whether it is death, disability or natural disaster. The key point of the mutuality of MIME is that policy owners will become the owners of MIME and profits made by MIME will be distributed annually among its clients as bonus. During the pilot period MIME will provide microinsurance products and services to the poor and ultra-poor at affordable price.
Vision
Poor people of Bangladesh will have social security through mutually beneficial insurance products.
Mission
- To sensitising NGOs/MFIs and mainstreaming insurance companies to the concept of mutuality and MIME for the welfare of the poor in Bangladesh.
- To make MIME a sustainable and autonomous entity within 4 years
- To reduce vulnerability of the poor people.
- To provide additional services that Mainstream insurance companies and NGOs/MFIs are not offering.
- To Piloting Microinsurance Mutual Entity (MIME) project to disseminate outcomes locally, and globally, and outline future structure of the MIME and develop sustainable Micro insurance Mutual entities in Bangladesh.
Partner NGOs/MFIs
MIME has been implementing through 11partner NGOs/MFIs namely -
1) BURO Bangladesh
2) Shakti Foundation for Disadvantaged Women (SFDW)
3) Community Development Centre (CODEC)
4) Voluntary Association for Rural Development (VARD)
5) ASHRAI
6) Gana Unnayan Kendra (GUK)
7) Pally Bikash Kendra (PBK)
8) Bangladesh Association for Social Advancement (BASA)
9) Anannyo Samaj Kallyan Sangostha (ASKS)
10) Society for Social Services (SSS)
11) United Development Initiatives for Programmed Actions (UDDIPAN)
Products
Since its inception MIME has been offering two life insurance products with very distinct features as:
Simple Term Life Insurance (STLI)
- Women from micro credit group members are eligible to apply.
- Maturity of policy is 60 years
- Premium payment at the rate of Taka 5, 10, 15, and 20 per month
- 5% bonus on premium after every 5 years on actual premium collected in 5 years.
Risk coverage
In the event of death, the insured amount will be paid to the nominee who is normally a family member. A partial amount will be paid to meet funeral expenses.
Term Life Insurance with Endowment (TLIE)
- Women from micro credit group members are eligible to apply.
- Maturity will be 5 years, 7 years, 10 years and 12 years
- Premium payment at the rate of Taka 50, 100, 150, 200, 300 and 500 per month
Risk coverage
At maturity, the policy owners will get the insured amount at the end of chosen term along with accumulated yearly bonus. In the event of death, the insured amount will be paid to the nominee who is normally a family member. A partial amount will be paid to meet funeral expenses.
STRENGTHS
- Affordable premium rate based on age, insured amount, maturity time has attracted the clients
- Sharing of profit as bonus is seen as a strong positive incentive for the clients.
- Wider network of MFIs/ NGOs are being used as MIME network.
- Existing trust of the clients on NGOs will give courage to buy the policy initially.
- MIME insurance education program to target clients and local level leaders motivate potential clients.
- Structured and simple underwriting process.
- Easy and only one premium collection process.
- Strong monitoring by the members of MIME team.
- Generation of monthly and yearly reports.
- Strong internal control and monitoring mechanism
- Premium amount is invested in time deposit as practiced in insurance industry.
- Less adverse selection due to regular visit of NGO staffs.
- Lower moral hazard because of long time relationship between client and NGO.
MIME at a Glance (as of March 31, 2010)
Project duration : 4 years (pilot)
Lead agency : INAFI Bangladesh
Working Area:15 districts including Bagerhat, Pirojpur, Sunamgonj, Moulavibazar, Kishoreganj, Naogaon, Pabna, Tangail, Gaibandha, Dhaka, Gazipur, Comilla, Chandpur, Chittagong and Narsingdi under 4 divisions of Bangladesh.
Number of branches :96
Number of Clients : 53,886 (cumulative)
Amount of Premium Collection: BDT 53.67 million
Training provided : 722 NGO staffs and 28,007 potential clients
Management
MIME is operated under a Project Director who is responsible for the overall MIME project implementation. Under the Project Director 1 Program Officer (Technical) is responsible for the overall operation of MIME project. Under the Program Officer 2 Assistant Program Officers are working to implement, supervise the MIME project at the field level, provide all the technical support and liaison with the partner NGOs/MFIs. In the Field level, 13 Insurance Officers provide education and training to the Insurance Organizers and supervise 96 Insurance Organizers. Insurance Organizers are playing a key role from giving insurance education to the potential clients, selling insurance, collecting premium, keeping all the records and bank transactions. MIME is managed in such a way so that accountability and transparency can be assured.
MIME Governance
In the pilot phase, MIME has established a management committee called the MIME Management Committee (MMC), which is basically a form of board. According to the plan MIME has planned to organize MMC meeting at every quarter end. MMC has scrutinized the investment of premium amount and made sure of the fund security.
MIME Management Committee (MMC) is a 15 member committee at the beginning of 2009 but later on the number became 14 as the Vice Chair was abolished as Stormed Foundation withdrawn themselves from the project. Chairman is from INAFI Bangladesh (the lead agency and promoter), 11 members from 11 partner NGOs/MFIs, 1 member from mainstream insurance companies and the project director is working as an ex-officio of the MMC. In the agenda of the proposed MMC meeting on 6th July, 2009 a new Vice Chair is supposed to be elected or selected. The MMC is giving the direction to MIME management regarding different issues of operational strategy to future direction for making MIME sustainable and successful.
Products
Since its inception MIME has finalised its micro insurance products along with the involvement of actuaries of Micro Insurance Association of The Netherlands (MIAN). The three MIME products with very distinct features are:
1. Term Life Insurance with endowment
2. Simple Term Life Insurance - Single Life
3. Simple Term Life Insurance - Dual Life
Common features:
- Both female and male members are eligible to apply.
- Payment on monthly basis.
- Funeral expense / Partial Claim Settlement
- To get any benefit the policy should remain in-force.
Individual features:
For Term Life Insurance with Endowment:
- Premium amount ranges between Tk.50 to Tk.500.
- Terms are for 5 years, 7 years, 10 years and 12 years.
- Funeral expense Tk.2,000 which will be adjusted from the final claim.
For both Simple Term Life Insurance:
- Premium amount ranges between Tk.5 to Tk.20.
- 5% refund of premium after every 5 years.
- Funeral expense Tk.500 which will be adjusted from the final claim.
Technical Assistance
As per business proposal MIME planned to take the technical support from MIAN which has many years of experience on mutual insurance approach, to develop customize products for MIME. In the process of technical assistance, Mr. Bullens (nominated representative by MIAN) visited Bangladesh and worked on product development and business plan issues with MIME. Later on, MIAN and MIME finalised the insurance product and final preparation of business plan.
Asian Knowledge Centre for Microinsurance (ASKMI) of TATA-DHAN Academy, India and Micro Insurance Mutual Entity (MIME) Project of INAFI Bangladesh signed an MOU on October 2, 2007, by which MIME may get assistance from ASKMI regarding skill building, developing systems for policy administration, claim administration etc.
Insurance Education Materials
- Frequently Asked Questions (FAQs): MIME has developed FAQs for the field level staffs that they may face in the field and give the answers at the same time. MIME has distributed to all the staffs at the field level so that they can give the correct message to the potential clients.
Educational posters development: MIME has developed posters with the pictures in March 2008, which are self-explaining the insurance concepts and benefits. MIME hangs the posters at the group meeting places, at markets so that people can understand the concept of insurance and can relate with their life and impact of insurance on their family.
 
Photo: Educational posters
Flip chart development: In April 2008, MIME has developed flip chart, which is explaining a fact of insurance benefits and shows the difference of savings (DPS) and insurance to be used for educating the potential clients. This is a continuation of the message provided in the posters in greater arrangements that covers a full story in 14 page presentation.
Docu-drama production: MIME has produced a docu-drama on microinsurance in October 2008 by a very renowned production house. The drama is making such a way that shows the marketing strategy of the insurance organizers along with details of MIME products and all related rules and regulations. This drama gives them an understanding of necessary of life insurance in their life.
Claim settlements
According to the MIME policy, MIME settles partial payment to the nominee or the policyholders as soon as it is informed about a client’s death (most likely on the same day) and settles rest amount of the claim within 15 days after prescribed claim application form is submitted by the claimant.
Mid-term evaluation
A mid-term evaluation was conducted on MIME’s operation. Mr. Denis Garand and Mr. S.M. Rahman conducted the evaluation. Oxfam and Rabobank proposed Mr. Denis’s name while INAFI proposed for Mr. Rahman. Evaluators along with MIME staffs checked all official documents, visited fields and also had a meeting with the Chief Controller of Insurance of Bangladesh. Denis Garand evaluated the MIME program thoroughly and was happy to see the understanding of the concept among the poor clients. He checked technicalities as well, like – to whom they pay, do they keep the pass book, money receipts, are they happy, what else they would like to get. He liked the way MIME is teaching the clients about these things. Mr. Denis assured that he may help MIME for its future assignments if required.
Strengths of MIME
- No medical examination requirement
- Less adverse selection due to regular visit of NGO staffs
- Lower moral hazard because of long time relationship between client and NGO
- Has an intermediary – NGO builds trust among the clients which gives them courage to buy the policy
- Conducted a precise demand and affordability study which reflected the demand, affordability about insurance product of the poor people
- Developed life insurance products within the affordability range of poor and the poorest based on age, insured amount, maturity time has attracted the clients
- MIME’s insurance education program to target clients and local level leaders by using Posters, flip chart and video drama give potential clients an easy understanding about insurance
- Structured and simple underwriting process
- Easy premium collection process.
- Strong monitoring by the members of MIME team
- Keeping records of monthly and yearly performance make staffs accountable for their work
- Strong internal control and monitoring mechanism
- Premium amount is invested in time deposit as practiced in insurance industry
- Separate books of accounts are maintained for MIME using its prescribed forms and formats
- Short term policy for 5,7 years were new in the market
- Claims settlement in 15 days
- Offers a partial claim payment to cover funeral expenses
- INAFI and MIME together have 5 designated Technical Assistance Provider (TAP) of ILO
Key Contact
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