Microinsurance premiums up 20%

Insurance contributions from low-income Filipinos amounted to P10.2 billion from January to September 2023, up by nearly 20 percent from P8.49 billion in the same period a year ago, according to the Insurance Commission (IC).

The increase was driven by the higher premium collection across all sectors of life, non-life, and mutual benefit associations (MBA).

Similarly, the number of lives insured under microinsurance products rose by 2.34 percent to 56 million during the nine-month period last year.

IC commissioner Reynaldo Regalado said the strategic direction moving forward is the promotion of financial literacy and raise the awareness of Filipinos, especially the low-income sector.

“Digitalization and the use of insurtech innovations in creating microinsurance products is a promising opportunity that we are eyeing to explore,” Regalado said.

Microinsurance is specifically targeted to low-income households or those who have limited savings. It covers compensation for illness, accidents, and death.

The IC has been promoting microinsurance among low-income earners as a means to prepare for emergencies that can drain resources, such as deaths, injury and damage to property or livelihood.

Of the total premiums as of the end of third quarter, MBA accounted for the bulk or 55 percent at P5.59 billion. This is a 10 percent growth from the P5.07 billion in 2022.

Life insurers also saw contributions improve by 16 percent to P2.73 billion, accounting for 27 percent of the total.

Non-life insurers, on the other hand, cornered the remaining 18 percent at P1.84 billion, surging by more than 70 percent from the 2022 level of P1.07 billion.

The number of lives insured by MBA and non-life companies went up by 1.45 percent and 17.38 percent, respectively, but slipped 2.64 percent for life insurance firms.

As of the third quarter last year, there were 50 regulated entities actively engaged in the sale of microinsurance composed of 24 MBA, 14 non-life, and 12 life insurance companies.

Microinsurance products include micro pre-need, micro-life and health insurance, and micro-agricultural insurance.

Many Filipinos who buy microinsurance are daily wage earners. The premiums should not be more than 7.5 percent of the current daily minimum wage in Metro Manila, computed on a daily basis.