FINANCIAL TECHNOLOGY (fintech) firms target to help increase insurance penetration in the country through microinsurance products offered through online channels or insurtech.
Insurtech firm Igloo Country Manager Mario Berta said in a webinar on Wednesday that they primarily offer granular insurance coverage through its distribution platform partners, including GCash, Etiqa Life and General Assurance Philippines, Inc., Shopee, foodpanda, and Cashalo, among others.
“Igloo is not an insurance company. We partner with insurance companies,” Mr. Berta said. “In very simple terms, we get a product that they already have and designed, we digitalize it, we upload it into our system, and then we plug into e-commerce ecosystem, and distribute the insurance product through the internet.”
“For instance, anything you buy through Shopee will be insured by us. At the checkout counter, where you will be requested to pay, a pop will show up and says, ‘do you want to attach any insurance?’”
Mr. Berta said the insurtech market needs to be developed as this could help raise insurance penetration in the country.
“Interestingly enough, the Philippines scored very low on insurance penetration, but higher on microinsurance penetration. Our job is to really enhance and further penetrate the microinsurance level of the Philippines,” he said.
“There is the gap in financial inclusion, with 63% of Filipinos not having access to bank accounts, it is really the biggest challenge we see,” GCash Vice-President of Insurtech and Cryptocurrency Neil Trinidad said in the same webinar. “Of this 63%, 26% do not even have access to physical banks… Only 3% of Filipinos have insurance.”
Etiqa President Rico T. Bautista, who is also president of the Philippine Life Insurance Association, said insurtech is an effective means of introducing insurance products to consumers as most Filipinos have mobile phones and internet connections.
Insurtech has several advantages like being able to provide real-time information, having lower development costs that translate into lower costs for consumers, and a better time-to-market efficiency, Mr. Bautista said.
He added that the local insurance market has been slow to adopt insurtech because of established, traditional means that companies have invested heavily in.
Microinsurance for certain products like for mobile phones, which some Filipinos consider an “investment,” also appeal to the market.
“For as low as P21 per month, you can have a coverage of P30,000 for your cellphones. If we consider our cellphones as an investment, we want to make sure we are able to protect our investment. For a low pricing, you are able to insure your phones,” he said.
Mr. Bautista said Etiqa is also eyeing to bring insurtech to more markets. — T.J. Tomas