Innovative approaches to distribution of financial services

November 23, 2020

Introducing bundled microinsurance through church networks in Papua New Guinea

By Eric Sena Morttey



Rev. Gloria Marke, a 43-year-old pastor of the United Church Papua New Guinea (UCPNG) in Hula, tragically lost both parents within a week of one another. After her father passed away, she intended to insure her mother, but didn’t have a chance when her mother collapsed and died on the way home from her father’s funeral.  Fortunately she registered her father for the United Life Insurance Plan (ULIP) six months before he passed away.

In Papua New Guinea (PNG) funerals are often expensive and Rev. Gloria was faced with financial stress at a time of huge grief. The benefit of 3,000 Kina (approximately USD 850) that she received from Life Insurance Corporation PNG Ltd. (LICL), helped to alleviate some of this financial burden and allowed her to lay her father to rest in dignity. However, because Rev. Gloria’s mother was not insured the family had to take care of all her funeral expenses. She spoke of her regret; “it was very sad that we ignored Mum and we didn’t have the chance to insure her.”


How one family’s financial burden can come to affect the community

The cost of organizing funerals, popularly known in PNG as “Haus Krai”, takes a toll on Papua New Guineans’ financial planning. Giving a befitting burial to family members is expensive. Due to the huge cost involved, most families resort to the “Wantok” system for support. The “Wantok” system can be thought of as a traditional social safety net that ensures family and clan members support each other in times of need.

However, when people call on this system it can then saddle an entire clan or community with unplanned financial obligations. People often resort to borrowing from informal money lenders at exorbitant interest rates. Others turn to small finance companies, employers, or dip into their business capital in order to meet the cost of their social obligations. In the event of a family member is becoming ill, people also rely on social networks to cover medical costs.

Raka Taviri, a Consultant for LICL, argues that “Wantok” in fact paves the way for the greater insurance awareness; “Insurance is a PNG concept. Payment of a bride price and a Haus Krai are two instances where you know what insurance is all about.” However, he also emphasizes that people can no longer rely on these traditional structures as medical and funeral costs continue to increase. “We cannot continue the usual way of relying on contributions from family members. We have to popularize the concept of insurance” he added.


About the United Life Insurance Plan

United Life Insurance Plan (ULIP) is a bundled insurance product with funeral and medical cover and was created through a partnership between the United Church of PNG and Life Insurance Corporation PNG Limited with funding and technical support from the Pacific Financial Inclusion Programme. Nationwide Microbank Limited (MiBank) was the partner financial service provider for ULIP.

The premium for ULIP is Kina 100 (US$ 28) annually, which provides Kina 3,000  (US$ 850) funeral cover for policy holders over 60 years, or Kina 6,000 (US$1700) for policy holders under 60 years as well as Kina 1,000 (US$ 280) annual medical coverage. Policy holders also get the benefit of deposit of Kina 10 (US$ 3) of their premium into a savings account which they open with MiBank, giving them access to basic banking services, which for many is the first time in their life.

The policy was designed in consultation with Church leaders and is distributed through agents nominated by the United Church of PNG’s congregations. Late Biango Buia, Former Acting Assembly Secretary of the United Church of PNG, explained their involvement: “ULIP came out of the experience of our church workers, our Pastors and their wives in the field. Our leaders are pushing very hard so that ULIP is accessible to any Papua New Guinean. You don’t have to fly into Port Moresby, but you go to the nearest United Church congregation and you register for a policy through the agents or ambassadors.”

The policy is not only available to Church members, but anyone can take one out so that in the future no one will have to experience the same financial stress as Rev. Gloria while they grieve.