the katipunan bank experience
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The Ka'punan Bank Experience Zaldy Pacificar
Managing Director
2012 RBAP-MABS National Roundtable Conference June 7-8, 2012
Hyatt Hotel & Manila
Session 7: Transforming MI from Service to Business
Passing on the risks
Zaldy Wong Pacificar June 8, 2012, Hya= Hotel, Malate, Manila
Ka@punan Bank • Organized by Businessman Gregorio P. Alano and his wife, Mrs. Bienvenida T.
Alano in 1978 to provide Financial services in the municipality of Ka@punan, Zamboanga Del Norte.
• On January 29, 1979, Bangko Sentral ng Pilipinas (BSP) authorized “Rural Bank of Ka@punan Inc.” to open its doors to the public
• Consolidated with Plaza Rural Bank of Carcar, Cebu on 2008 • A[er consolida@on, “Rural Bank of Ka@punan Inc.” changed its name to
“Ka@punan Bank (ZN) Inc.” • Has more than 1 billion resources as of May 31, 2012 • Has a camel’s ra@ng of 4 (BSP Examina@on for the year 2011) • Has more than 200,000 clients, 42,000 of whom are Microfinance
KB Mutual Benefit Associa@on Inc. (KB-‐MBAI) • Approved by SEC on September 8, 2008 • Approved by IC on October 20, 2009 • Organized by Ka@punan Bank Inc. as its primary Microinsurance provider • Offered Life insurances to KB’s MI clients (Dependents not covered) • Ini@ally offered health benefits to both the Principal & their dependents. • Stopped offering health benefits in 2011 due to Fraudulent claims • A[er 3 years of opera@on, the associa@on is being dissolved
The Lessons 1.) 50% of the premium the client paid is returned as an equity of the payor a[er resigning from the associa@on.
2.) Health insurance has high fraudulent risks.
3.) Turnaround @me of processing claims is quick but very costly.
4.) The allowable expense for Administra@ve work is not financially viable (IC only allowed 25%). 5.) More of a service than a business.
Microinsurance is not something that we, as social entrepreneurs, can consider as our core business. However, Ka'punan Bank acknowledges its importance. Hence, we opted to pass on the risks.
The Strategy
Determined the right Partner
Ini@ated the comple@on of all Statutory requirements
Mapped out the Transi@on strategy
Implementa@on
• TAT to process • Financial Status • Industry impression • Market reach • Flexibility
• Compliance • To – be process • People readiness • System readiness • Risk mi@ga@on
• Stabiliza@on • Governance
Our Partners
Case Study: The Sendong Experience was the BOD’s cri@cal case study in deciding for the right partner.
• Flexible to offer some health benefits • Flexible to Profit sharing • Quick to respond to our needs • Quick to train our people • Helped us from Day 1
Case Study: The capacity of Globe is the BOD’s deciding point. Hence, KB chose Globe for its Ka@punero card.
• Flexible to our terms • Trained our people
Commercials
# of Clients KBMBAI PIONEER
30,000++ PhP 90,000++ Above PhP 400,000
* KBMBAI amount was computed based on previous agreement * Received by the bank for April 2012
Thank you! I welcome your questions later!
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