While the global demand for health microinsurance remains high, practitioners in the field face a number of challenges. In addition to a general lack of available data, there are very few microinsurance educational tools available to actuaries and healthcare practitioners. An important part of actuarial education is pricing methodology guidance and instructional pricing materials.
The International Actuarial Association (IAA) was the beneficiary of a pro bono collaboration with the MicroAssist group at Milliman to develop a health microinsurance instructional pricing tool for the microinsurance industry. This model illustrates key actuarial principles common to health scheme pricing and describes a number of important items to consider when using available data and applying adjustments in health scheme pricing. The concepts and mathematical principles used are examples of functional concepts related to health microinsurance and health insurance pricing and provide a valuable framework for actuaries, health professionals and microinsurance practitioners as they develop and operate health microinsurance schemes. As part of a data research project, actuaries from the University of the Witwatersrand in South Africa also provided input assumptions for the model developed by the MicroAssist group.
The IAA’s Microinsurance Working Group (MIWG) facilitates our efforts in the development of microinsurance and actuarial involvement in this rapidly growing, and socially meaningful area. The MIWG worked closely with the Milliman team which developed this instructional pricing tool.
Nigel Bowman, Chair of the IAA Microinsurance Working Group, said: “We hope that this pricing tool will help to provide actuarial education and guidance to technical microinsurance practitioners, as well as actuaries who may not be experienced in microinsurance, when pricing health microinsurance products. There is a lack of actuarial skills and educational opportunities in almost all microinsurance markets and we expect this instructional tool will be another small step towards filling the gap alongside the existing Credit Life pricing tool. This is a very exciting development and I look forward to its positive impact in the microinsurance world.”
The health and credit life microinsurance pricing tools are accessible from the IAA website.
To learn more about the work of the IAA on this topic, please contact the Director of Technical Activities at the IAA Secretariat.
Per PSoA’s Guidance Note entitled “Guidance Note on Selection of Discount Rate for Accounting of Post-Employment Benefits Scheme”, PSoA’s Discount Rate Committee's recommendations for the discount rate at various dates can be found here:
The PSOA Council has approved the following Guidance Notes. These can be downloaded from here:
The Securities and Exchange Commission of Pakistan (SECP) issued the Unit Linked Products and Fund Rules in April 2015. The new rules address the investment governance process of unit-linked funds, net asset valuation methodology and disclosure of investment risk to insurance policyholders. Additionally, certain features of unit linked life insurance such as premium indexation, minimum financial protection and minimum policy term have been addressed. The link to the SECP is here.