Forum highlights growth potential of microinsurance

Despite the lack of financial literacy and lack of insurance penetration in the Philippines, more and more low-income Filipinos are leveraging microinsurance thanks to the collaboration between government and the private sector.

The Microinsurance MBA Association of the Philippines (RIMANSI) recently held the 2018 National Microinsurance Forum, in observance of National Microinsurance Month, at the grand ballroom of the Century Park Hotel in Manila.

The event, which was supported by Global Affairs Canada, was attended by more than 200 of the country’s microinsurance stakeholders from microinsurance mutual benefit associations (Mi-MBAs) and microfinance institutions (MFIs), regulators, promoters and supporters of microinsurance. This year, the gathering of key microinsurance players and stakeholders provided the venue for discussions on the gains, challenges and prospects of expanding the reach of microinsurance, which included presentations on developments in regulations, outreach, market penetration, non-traditional products and distribution.

Citi Philippines chief executive officer Aftab Ahmed outlined the bank's initiatives in promoting greater financial inclusion in the Asia-Pacific region, especially in the Philippines. Ahmed said, “Financial inclusion is a subject which is very dear not only to the government in terms of wanting to enhance financial capability in the country but it’s one initiative that Citi too is highly committed to. Over the last 5 years, Citi Foundation has invested over $50 million in financial inclusion efforts across Asia Pacific, where in 2017 alone, we invested $6 million in 10 countries, which supported 65 financial inclusion programs and positively impacted close to half a million people. Last year, Citi committed around 125 million in the Philippines and we have been supporting RIMANSI’s capacity-building program for Mi-MBAs since 2016. Now on its second phase, Citi Foundation’s grant supports the growth strategy of Mi-MBAs with the aim of impacting 5,000 households through the development of new distribution channels.”

Keynote speakers of the forum were Canadian Ambassador John Holmes and Insurance Commissioner Dennis Funa. They talked about Canada’s support for the rehabilitation and recovery of super-typhoon Yolanda-hit provinces through microenterprise and risk protection development initiatives; and on the positive growth of the insurance industry based on all indicators, including microinsurance coverage of now 32 million Filipinos and the issuance of an enhanced framework for insurance providers to use mobile applications in the distribution of insurance products.

The forum featured panel sessions on the future directions of MFIs, pilot initiatives of Mi-MBAs in reaching hard-to-reach areas, non-life calamity microinsurance and the government’s subsidized agricultural insurance program.

The discussions highlighted the growth potential of MFIs. The more than 5 million unserved households were potential sources of the growth of microinsurance providers, especially Mi-MBAs. Partnership with non-traditional channels of microinsurance distribution was also promising but could face the challenge of operational systems and efficiency. However, while a wide range of life, non-life, pre-need and agricultural microinsurance and risk protection products were available in the market, consumer education and literacy, efficient distribution, and connectivity, among others, remained as key challenges to be overcome by the microinsurance sector.

MiMAP (RIMANSI), a microinsurance resource center, is an association of 19 MiMBAs regulated by the Insurance Commission of the Philippines. MiMAP members have a combined coverage of 5.34 million households nationwide, insuring 17.92 million people through its basic family life insurance program that covers at least four members of each family, which pays only a single premium.

In 2017, Mi-MBAs’ contributions and premiums reached 13.68 billion; reserves, 11.52 billion in equity value, and paid claims benefits totaled 1908 million. The Mi-MBAs have a shared mission of reaching 12 million members and insuring 48 million people by 2024.