THE NUMBER of lives insured by the microinsurance products of mutual benefit associations (MBAs) grew to 26.66 million last year, but total premiums earned declined due to the pandemic, the Microinsurance MBA Association of the Philippines, Inc. (MiMAP) reported on Tuesday.
MiMAP’s 18 MBA members covered 1.723 million more lives with their microinsurance products last year, increasing the sector’s coverage by 7% from the 24.93 million in 2019, its chairman emeritus Jaime Aristotle B. Alip said during the organization’s forum on Tuesday.
Premiums written, however, declined by 18% to P3.94 billion in 2020 from P4.81 billion the year prior after several clients found it more difficult to settle their dues during the pandemic, Mr. Alip said.
“Mahirap po kasi ang pagbabayad, maraming miyembro ang gustong magbayad (Many members found it difficult to pay their premiums even if they wanted to) because with this lockdown and mobility restrictions, (payments) became an issue,” he said.
Claims paid by MiMAP’s MBA members, meanwhile, rose by 12% to P1.6 billion from P1.43 billion in 2019 as companies continued to process payments and claims of clients, Mr. Alip said.
The average amount of death claims they received per day jumped by 12% to P4.38 million last year, while the number of payouts issued inched up by 2% year on year to 182 on average.
“This signifies the commitment of Mi-MBAs to prioritize addressing the needs of its members especially during this state of calamity in the country brought about by the COVID-19 pandemic,” he said.
Meanwhile, the Insurance Commission (IC) expects the MBA industry to remain the top-performing insurance sector in microinsurance after being so in the past five years.
IC data showed the number of lives covered by MBAs with their microinsurance products accounted for 69% of the total market share at end-June 2020, making it the top contributor in microinsurance.
MBA’s microinsurance premium production also accounted for the bulk or 58.8% of the total premiums recorded in the first half of 2020.
“The IC remains optimistic that the number of lives insured will continue to increase gradually now that the community quarantines are being eased up. Certainly, it will still involve our collective efforts to spread information and awareness about microinsurance, and other financial instruments in general,” said Insurance Commissioner Dennis B. Funa at the same event.
Mr. Funa said the industry’s shift to digital and wider adoption of insurance technology (insurtech) will support the promotion of microinsurance.
However, the IC chief himself admitted that communities in remote areas will still be difficult to reach due to connectivity issues.
“Another challenge is the fact that marginalized sectors, which are the target market of the microinsurance, are also the ones most affected by the pandemic,” he said.
“Nonetheless, we should still continue to reach out to them and educate them about the importance of insurance and microinsurance products, especially in times of crisis,” he added.
The estimated lives covered by microinsurance rose by 8% year on year to 39.67 million as of June last year, IC data showed. — Beatrice M. Laforga