THE PHILIPPINE Insurers and Reinsurers Association, Inc. (PIRA) is optimistic on opportunities to expand the microinsurance segment, which could improve insurance penetration in the country.
In a press briefing, PIRA Executive Director Michael F. Rellosa said there is a big opportunity to grow the microinsurance industry to help more Filipinos get insured.
“We see a lot of opportunities to grow the microinsurance segment. Fist of all, Senator [Cynthia A.] Villar is drafting a bill to come up with new products for agri insurance — not only crops but also for livestock,” Mr. Rellosa told reporters yesterday.
Ms. Villar filed on March 20 Senate Bill No. 1759 or the Free Index-Based Crop Insurance Act of 2017 to strengthen the resilience of small farmers against calamities by establishing a program and framework for a free weather index-based crop insurance.
“The government are now opening up to the private sector agricultural insurance so that’s going to be an opportunity for us. We’re creating new products for our farmers,” Mr. Rellosa said, noting that the state-owned Philippine Crop Insurance Corp. is currently the sole firm offering crop insurance for farmers.
Mr. Rellosa added that micro-agri insurance is a first step to diversify microinsurance products. He floated the idea of micro-health and micro-burial insurance products.
Aside from this, PIRA said Filipinos are now seeing the value of getting insured as the country is prone to calamities.
“Since we’re a calamity-prone country, people are realizing the need for protection, so we’re expecting more Filipinos to avail of more products to shield them from calamities,” Mr. Rellosa noted.
Despite this, PIRA education committee chairman Armand M. Pesigan noted sustainability remains one of the biggest challenges in growing the microinsurance industry.
“Sustainability for us is the continuing challenge because as you become successful and you get higher penetration, your exposure also grows,” Mr. Pesigan said. “The more we become successful, the more we need to become conventionally protected, and in effect, our products will become less affordable.”
PIRA is optimistic that more non-life insurers will start offering microinsurance products in the future.
There are only four firms who are currently offering these products such as Malayan Insurance Co., Inc. and Pioneer Insurance & Surety Corp. among others.
Mr. Rellosa said through microinsurance policies, more Filipinos will be able to protect themselves from potential risks, meaning the protection gap will be lessened.
“In the [Southeast Asian] region, the Philippines is one of the countries with very low penetration ratio or the total premiums in a country versus its gross domestic product, which is at [approximately] 3%,” he said. “We’re trying to change that.” — K.A.N. Vidal