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Reinsurance, risk transfer and enterprise risk management are vital to the short- and long-term viability of microinsurance and microfinance company operations (collectively, "MFIs"). Most MFIs lack sufficient access to meaningful risk transfer solutions. This lack of access hampers market massification and product diversification. It also threatens the financial solvency of existing and potential new MFIs, as well as their millions of existing and potential low-income clients.

GC Microinsurance icon Guy Carpenter is working actively to create an enabling infrastructure within the commercial marketplace to support MFIs' risk transfer and the expansion and improvement of multiline microinsurance products. Guy Carpenter's efforts will enable MFIs to obtain cost-effective and efficient risk transfer solutions, which would be otherwise difficult for them to obtain independently on the open market. We will also act as a dedicated advocate for our MFI clients, providing them with a knowledgeable and accessible portal to the worldwide commercial risk and reinsurance marketplace and with ready access to the many critical benefits of risk transfer. Tailored solutions devised in tandem with Guy Carpenter will help MFIs address current needs and attain future goals, improve institutional stability, increase product capacity, enhance product penetration and stimulate product innovation. Guy Carpenter will also serve for MFIs as a source of and conduit to invaluable commercial market expertise.

From an overall market perspective, an active microreinsurance trade will promote macro- and micro-level innovation, increase awareness of microinsurance amongst (re)insurance practitioners worldwide, and improve overall microfinance service penetration and quality by increasing the available capacity for, and the stability of, existing and new products.

Guy Carpenter has been awarded a grant by the Microinsurance Innovation Facility to develop risk transfer capacity for microinsurers and other microfinanciers. The facility, a partnership between the United Nation's International Labour Organization and the Bill & Melinda Gates Foundation, promotes insurance coverage in developing countries for low-income people who otherwise would not have access to commercial coverage.

MIFF

With this grant, Guy Carpenter will create the infrastructure for a multi-line microreinsurance risk-pooling facility to provide risk transfer solutions to support MFIs' operations. This will enable MFIs to access the global commercial risk and reinsurance marketplace and to obtain cost-effective and efficient risk transfer solutions. The facility is designed to improve the institutional stability of our MFI clients, increase MFIs' product capacity and penetration, stimulate MFIs' product innovation, and provide MFIs with access to invaluable commercial market expertise. The overarching goal of the facility is to structure efficient and effective reinsurance products that are both affordable for microinsurers and profitable for reinsurers so as to encourage long-term commercial market viability and stability.

Any existing or potential MFI in any region of the world with sufficient, analyzable information regarding its clients and products is able to benefit from Guy Carpenter's services. Beyond this central criterion, a Guy Carpenter client will generally have one or several of the following characteristics: an existing book of microinsurance business, an interest in offering new/improved microinsurance products to its clients, or an interest in or a need for risk transfer solutions. More specifically service beneficiaries will fall into one of the three following general categories:

Existing Microinsurance Schemes: Formal/Informal; Risk Bearing/Non-Risk Bearing; Corporations/NGOs
Potential Microinsurance Schemes: especially MFIs with no existing microinsurance products
Other Risk Transfer Beneficiaries: especially MFIs with no existing institutional risk transfer mechanisms

Data Collection, Analysis & Management
Transferring risk is a data intensive process. Without adequate information regarding underlying product exposures and experience, secondary risk transfer cannot take place. Guy Carpenter works hand in hand with our MFI clients to obtain the information necessary to initiate the risk transfer process. Once collected, our Instrat® unit is able to analyze the information provided using catastrophe models and actuarial expertise. We are also able to effect ongoing data management through the implementation of proprietary programs like i-aXs®.

Risk Advisory & Coverage Design
Using the results of the data collected and analyzed, we apply our expertise in reinsurance and risk transfer and our extensive intellectual capital (www.GCCapitalIdeas.com) to create tailored risk management solutions for MFIs that effectively and innovatively address organizational needs.

Marketing & Negotiation
Our global network keeps us close to our MFI clients and strengthens our knowledge of local markets, regulations and business practices. Guy Carpenter is able to utilize its global network of colleagues to meet the specific needs of MFIs in countries around the world and to appropriately focus our marketing efforts on their behalf. This local market knowledge in conjunction with our extensive industry contacts and our specialized resources, enable us to achieve superior results for our clients.

Risk Transfer Our unparalleled access to the global commercial risk and reinsurance marketplace allows us to offer a variety of risk transfer solutions to our MFI clients. Potential transactions could involve traditional quota share and excess of loss reinsurance, as well as a variety of capital markets arrangements, such as risk securitizations and derivatives, through GC Securities*, our investment banking division.

Account Servicing
As part of our commitment to our MFI clients, we are able to offer an array of services that continue after the placement process ends. Our dedicated servicing team provides clients with comprehensive accounting, claims and contract wording support for completed transactions.

For more information, please contact GC Microinsurance or one of the specialists below.

Alex Bernhardt

Senior Risk Analyst
Seattle
+1.206.621.2924

alex.bernhardt@guycarp.com

Toby Hardman, ARe, AIS

Senior Risk Analyst
Seattle
+1.206.621.3740

toby.hardman@guycarp.com

*This material is not intended as an offer or solicitation for the purchase or sale of any securities or financial instruments. Securities are offered in the United States through GC Securities, a division of MMC Securities Corp., a US registered broker-dealer and member FINRA/SIPC. Main Office: 1166 Avenue of the Americas, New York, NY 10036. Phone 212.345.5000. Securities or investments, as applicable, are offered in the European Union by GC Securities, a division of MMC Securities (Europe) Ltd., which is authorized and regulated by the Financial Services Authority. Reinsurance products are placed through qualified affiliates of Guy Carpenter. MMC Securities Corp., MMC Securities (Europe) Ltd., and Guy Carpenter are affiliates owned by Marsh & McLennan Companies.