AXA to offer parametric insurance
AXA GLOBAL Parametrics wants to offer its parametric insurance product in the country, primarily targeting the local agriculture sector, with the firm is also eyeing to introduce the product to the Insurance Commission (IC) by end-June.
The global parametric team of French insurance giant AXA said it is looking to enter the Philippine market via a product designed for the agriculture sector, with parametric products yet to be offered here.
“In the Philippines, we don’t offer any products yet but we are working...[with] companies, partners to try to sell the product across the Philippines,” AXA Philippines Chief General Insurance Officer Claude Seigne said in an interview.
Parametric insurance is based on an independent parameter or index that is correlated to client’s losses. A wide variety of risks can be covered through the insurance product, like adverse weather causing crop losses and affecting agriculture-related businesses.
The product offers a seamless customer experience with optimized insurance process and amplifies the scope of the insurable.
Asked if the company has already introduced the product to the IC, Mr. Seigne said they have not yet presented it, but noted they have already spoken with the Insurance Commissioner.
“Not yet, but we are going to do that this month…that should already be quick,” he said.
“But we’ve already met with the regulator Mr.[ Dennis B.] Funa. We are going to explain and I believe that in one month’s time, it’s going to be okay... He’s (Mr. Funa) very interested in parametric,” the official added.
Asked if the product will be the first in the country should the IC approve the proposal, Mr. Seigne said, “It’s up to the Commission to say eventually, but my impression is yes.”
According to the company, some foreign insurance firms have also attempted to offer parametric insurance products in the Philippines in the past, but to no avail.
Asked if they have spoken with some agricultural companies here in the Philippines regarding their proposed product, AXA Global Parametrics Chief Executive Officer Tanguy Touffut said, “With... distributors, hopefully, I think there should be some announcements next month [ or] early August.”
According to Mr. Touffut, AXA Global Parametrics will rely on AXA Life Insurance Corp. (AXA Philippines) in speeding up the development of the product and ensure it will fit local needs.
Last March, AXA launched AXA Global Parametrics in a bid to widen the range of solutions it offers and expand its scope to small and medium enterprises as well as individuals.
CROP INSURANCE
In a separate development, the Insurance Commissioner expressed the need to further improve the country’s crop insurance industry.
Asked what are the IC’s specific proposals to boost the sector, Mr. Funa told reporters in an ambush interview that one factor to consider in improving crop insurance is feasibility.
“It should be taken up by a sufficiently large number of farmers to make an insurance product buyable and the insurance companies are also fearful that if they offer crop insurance product and there are only few takers, and then a huge calamity [ happens],
then it will definitely be a loss for the insurance company,” he said.
“So it has to be formulated in such a way na maraming ( that there will be a lot of ) takers.”
“Premiums, how much will premiums be? That is the issue of the Philippine Crop Insurance Corp., which is a government corporation. They cannot offer crop insurance with high premiums,” Mr. Funa said.
“But farmers cannot afford to pay high premiums and what does the government do? They subsidize it. In other words, without government subsidy, crop insurance will not be feasible,” he said.