THE INSURANCE Commission (IC) plans to launch this quarter the Philippine Catastrophe Insurance Facility (PCIF) that will help guard the country against natural disasters.
The PCIF will help nonlife insurance companies better manage disaster-related exposures and expand the sector’s capacity to take on more risks, the Department of Finance said in a statement on Thursday, citing a report from the IC.
“We recognize the significant role that the nonlife insurance industry should play in ensuring the Philippines’ catastrophe resilience and in bridging the catastrophe insurance gap that we need to urgently address as our country is among the most vulnerable to the onslaught of natural calamities,” Insurance Commissioner Dennis B. Funa was quoted as saying.
The IC, the National Reinsurance Corporation of the Philippines and the Philippine Insurers and Reinsurers’ Association started working on the facility last year after signing a memorandum of understanding in January 2020.
The PCIF allows nonlife insurers to share the risks associated with catastrophe insurance products by pooling them in the facility.
The new facility is also expected to have a more “risk-appropriate rating environment that would ensure sustainable catastrophe premium rates and provide the public wider access to catastrophe insurance protection.”
Prior to the facility, local insurance companies with natural disaster-related insurance products reinsured risks overseas.
The regulator said pooling local resources in the PCIF and keeping them within the country will help the nonlife sector to boost its premium base and eventually expand the catastrophe insurance products these companies offer.
Mr. Funa said this will help families, communities and businesses recover faster from losses incurred when natural disasters hit such as storms and earthquakes.
The Philippines is one of the most disaster-prone countries in the world, frequently battered by typhoons, floods, landslides, eruptions and other extreme climate patterns such as El Niño and La Niña. — Beatrice M. Laforga