Microinsurance covers over 25% of population
A QUARTER of the Philippine population is now covered by microinsurance as of the third quarter last year, according to the Insurance Commission (IC), on the back of higher sales of microprotection products.
The microinsurance penetration rate as of end- September 2016 stood at 25.4%, the insurance regulator said in a statement yesterday, which puts the total number of Filipinos covered by microinsurance policies at 26 million.
Microinsurance are insurance products with reasonable and affordable premiums that cater to low-income individuals.
According to the IC report sent to reporters yesterday, sales of micro-protection products went up to P3.97 billion as of the third quarter of 2016, growing 63% from the P2.44 billion recorded as of the previous quarter.
Of the sales, 29% or 7.5 million individuals were covered under the life insurance sector, while the non-life microinsurance sector made up 12% or 3.1 million of the total.
More than half of the individuals insured or 15.6 million were generated by micro insurancemutual benefit association ( MBAs), Insurance Commissioner Dennis B. Funa said in the statement.
MBAs had a 56% share in the total income of the microinsurance sector, while the life sector took 34% of the share, and with the remaining 10% going to the non-life sector.
“Meanwhile, premiums generated from the sale of microprotection products ballooned by a whopping 63%, or from P2.44 billion at the end of the second quarter of 2016 to P3.97 billion at end- September 2016,” the IC added.
The IC yesterday said it is “optimistic” that the microinsurance penetration rate would go up to 48.7% by 2022 as demand for these products expands.
Mr. Funa cited the importance of microinsurance in the country, as it is one of the most vulnerable nations against natural and manmade disasters in Asia.
“Wider financial inclusion and maximum social protection is critical in a developing and vulnerable country such as the Philippines,” he said.
“Microinsurance can help combat poverty by providing low-income sector of the society with access to risk protection products thereby protecting their lives, properties and livelihood. The continuous increase in microinsurance penetration rate is helpful to the attainment of the “Ambisyon Natin 2040” of the Duterte administration with the goal to wipe out poverty by 2040 or sooner and its strategy of improved financial inclusion and income diversification,” Mr. Funa added.
Earlier, Mr. Funa said that the IC is bullish on this year, as the insurance industry continues to expand on the back of the strong economic outlook in the near term. •