BAC launches innovative insurance against extreme weather events
Bankers Assurance Corp. (BAC) recently rolled-out the country’s newest weather index insurance product to address the loan or risk portfolio exposures of institutions with respect to financial loss due to extreme weather events.
This product will help rural banks, cooperatives, corporations, mutual benefit associations (MBAs), non government organizations (NGOs), microfinance institutions (MFIs), and local government units (LGUs) to cope with the effects of typhoon (windspeed) or flood (rainfall) on low-income households.
This product called Weather Index Insurance (Wii) Credit Asenso is a step ahead in parametric insurance for the micro-market as it can cover risk exposures nationwide through the use of state-of the-art satellite technology to monitor weather events all over the Philippines.
Attending the product presentation of Wii Credit Asenso were Insurance Commissioner Dennis Funa and Deputy Insurance Commissioners Ferdinand George Florendo, Dorothy Calimag and Randy Escolango.
According to BAC general manager, Carlo Diaz, the Philippines is visited by an average of 20 typhoons per year. These extreme weather events have debilitating effects on the cash flow and earning capacity of institutions and low-income households, which Wii Credit Asenso seeks to address.
Wii Credit Asenso, through its satellite technology and online monitoring system monitors the weather conditions in the Philippines and determines whether the index thresholds for rainfall (for flood) and windspeed (for typhooon) shall translate to an insurance payout. This technology ensures that claims are determined on real-time basis and results can be viewed online, no need for lengthy and time consuming claims investigation and loss adjustments.
Each municipality in the Philippines was imbedded with trigger indices for windspeed and rainfall on weighted averages based on a 20-year model developed by Munich Re, the reinsurance partner of BAC. Risk portfolios can be covered based on their geographic locations per municipality. If an extreme weather event occurs, the system shall render claims payout calculations for affected municipalities that have covered risk portfolios under the policy.
Wii Credit Asenso is a product developed by BAC - a member of the Malayan Group of Insurance companies, the largest non-life insurance group in the country, Danish Hydraulic Institute (DHI) – an independent service provider that monitors real-time weather data through satellite technology, and Munich Re – one of the leading risk carriers in the world.