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Logo of Phnom Penh Post newspaper Phnom Penh Post - Micro-insurance takes hold

PKMI CEO Solene Favre.
PKMI CEO Solene Favre.

Micro-insurance takes hold

Low-income Cambodians who take out microfinance loans can also get basic health coverage for $5 per year.

The micro-insurance is available through Prevoir Kampuchea Micro Insurance Plc or PKMI, which is a subsidiary of the French family-owned insurance company Group Prevoir that has been in operation since 1910.

PKMI CEO Solene Favre had previously been working to insure low-income people both in India and Cambodia when Prevoir opened in Cambodia in October, 2011.

“They had a strong wish to do micro-insurance for both life and health,” Favre said.

With 19 Cambodians, CEO Favre and another French lady who serves as the firm’s actuary, PKMI targets both clients of microfinance institutions (MFIs) and the staff of companies to provide health and life insurance.

“For example we insure the staff of Hagar Catering,” Favre said.

PKMI works with MFIs including Vision Fund, CMK and Chamroeun to add an insurance benefit alongside a loan.

Favre feels what she’s doing is beneficial to the poor because health insurance enables people to survive costly medical procedures without having to sell off their important assets like land.

“I always go out to the field and meet the insured in places like Pursat to see how they feel. I saw a lady who needed some surgery and insurance changed her life because she didn’t have to sell her land to pay for the removal of her appendix,” Favre said.

“For the 50 per cent of the population living around the poverty level, one medical expense can pull them down below the poverty line,” Favre said. “We work with people one level above poverty, so they don’t fall down into poverty.”

A lot of PKMI’s work is training people from the MFIs who then attach micro-insurance to microfinance in the provinces.

“The credit officer in the field has the confidence of the people and if he is convinced they need to get insurance, he will sell better and relationship will be easier.”

Favre says PKMI enjoys support from UNDP on a project to show how micro-insurance can protect people from vulnerability. She says people need to be educated about insurance and must make the choice themselves.

“Micro-insurance is still not compulsory in cases of microfinance and people can still choose. Insurance education is not enough. You can take your own choice only if you know the consequence of your choice,” she said.

Favre says she enjoys seeing the Cambodian staff at PKMI growing and preparing to take responsibility for their own lives and seeing that translate to success in sales.

“What I like every day is working to give people the autonomy and see them make the decisions and taking the lead. This is their company.”

She loves the Cambodian willingness to learn.

“The Cambodians have a willingness to learn and open minds. First we have to convince our staff and then they can spread the world. It can be you, your child or your neighbour or someone you don’t even know,” Favre said.

The $5 per year health coverage is people who take out loans from microfinance institutions and it covers surgery and hospital, with up to $150 available for treatment.

“Our products are competitive and flexible,” she said. “It matches with their needs and their capacity to pay.”

The same health coverage is available to anybody for $25 per year, when not in conjunction with a microfinance loan.

“If they go into a private contracted health facility, they don’t have to pay but it is up to a limit. They can go anywhere, and they can pay and we will reimburse afterward up to a limit. The same process goes for the insured staff of a company,” she said.

PKMI also offers $6 per year accident insurance for medical expenses, just for accidents and not linked to illness.

Favre is looking for more partners so that PKMI can insure large numbers of people. She would like to have more MFIs and mobile operators.

“There are 30 MFIs in Cambodia and the scope is quite large,” she said.

Originally from the French coastal region of Brittany, Favre came to Cambodia two years ago after working in the poor areas of Indian cities including Mumbai. Before that, she worked for 10 years in the national social security service of France.

Her two years insuring slum dwellers for a company called Uplift India funded by a French insurance group and the ILO taught her the basics of community health insurance.

“It was community based health insurance. I could see the solidarity among all the slum dwellers,” she said. “It was mostly women who had small jobs like banana sellers and tailors. Others were rickshaw drivers or tea vendors.”

Like much of the work today in Cambodia, the scheme was in partnership with an MFI and the idea was to educate people about the benefits of health insurance, which was sold automatically with the loan. “In India the level of education on insurance is a bit higher than in Cambodia because it is not as new there as it is here,” she said. “The MFIs made the micro-insurance compulsory with the loan. The borrowers understood what they were paying for,” she said.

When she first came to Cambodia In 2011 to work for the French NGO called Gret, she directed a micro-insurance program called Sky for rural workers to provide health coverage to poor people as well as a health insurance pilot program.

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