When disaster strikes: efforts by a MFI to improve claims processing
Fonkoze is a microfinance institution in Haiti that offers an innovative insurance product to protect clients against the devastating effects of natural disasters (See Emerging Insight 41 to learn about the product). Since disasters usually affect many clients at once, Fonkoze needed to build capacity to process bulk claims quickly and efficiently to provide rapid relief to clients.
Immediately after a disaster occurs, a “center chief” (an elected client representative) visits all of the members of the respective centers to assess losses. Using the findings of the center chief, a trained Fonkoze facilitator then analyzes the losses to determine the ones eligible for a claim. These facilitators are hired at the head office and travel to branches after the disaster. The reason for hiring facilitators at the central level is to ensure that they are not subject to the conflict of interest that could affect branch staff who have a close relationship with clients and an incentive to accept claims to improve the performance of their loan portfolio (loan cancellation is one of the benefits of the product).
Fonkoze also redesigned the claims form to make it easier and faster to complete. The claims assessment form initially was composed of open-ended questions. Facilitators often provided vague answers that were insufficient for the claims team to make a payment decision and hence required follow-up. The new form includes objective yes/no questions that are easier to complete and assess.
To learn about other innovations implemented by microfinance institutions, join the Facility webinar on "Enhancing Microinsurance Products and Processes in Microfinance Institutions" on 10 October 2012, from 2:30 to 3:45 pm (CEST). Click here to register.
For more on Fonkoze, see the Fonkoze Learning Journey.