PH leads in microinsurance among APEC-member countries

As the country tries to develop its financial inclusion, Philippines emerged with the highest microinsurance coverage among Asia-Pacific Economic Cooperation (APEC) member economies, experiencing exponential growth over the last decade.

Michael McCord of the Microinsurance Network said over a statement that the microinsurance coverage in the Philippines rose from 20 percent to 28.1 percent from 2012 to 2014, reaching an annual growth of 18.4 percent in terms of the number of persons covered.

As of this year, microinsurance in the Philippines has already covered 28 Million individuals.

Finance Undersecretary Gil Beltran said one of the drivers for this growth is the country’s establishment of National Strategy for Microinsurance, which was implemented by an inter-agency committee led by the Department of Finance (DOF).

This, according to him, encouraged private financial institutions to develop market-based and relevant products, services, linkages, and business models to the low-income sector.

In the country, private financial institutions are actively engaged in providing various types of microinsurance products and services.

"Microinsurance does not only enhance our resiliency to disasters, shocks, and crises. I actually think it is a key element to strengthening the economy and making growth sustainable. It is always a win for the economy when the most vulnerable are protected and empowered,” Beltran said.

“In a way, boosting microinsurance coverage rates is an effective anti-poverty measure. We minimize vulnerabilities of the poor and enable them to rebuild the pieces of their dreams that crack when disaster hits," he added.

While micro-insurance products are provided by licensed insurance companies, and cooperative insurance societies and mutual benefit associations (MBAs), they are marketed through pawnshops, cooperatives, rural banks, mutual benefit associations, NGOs, and other microfinance providers.

The unique context of microinsurance in the Philippines casts a wider net for financial inclusion, with more avenues opening greater access to finance for more vulnerable Filipinos.

Moving forward, the National Strategy for Microinsurance is now on track to establish modern retail payments system, credit information system and collateral registry. Since the launch of the Strategy, there has now been more than 50 licensed insurance entities such as banks, cooperatives, and microfinance NGOs that provide microinsurance products; 89 Insurance Commission-approved microinsurance products; and 28 million Filipinos covered.

Developments in disaster risk insurance, micro health products and agricultural risk insurance are also being made to further increase the penetration rate in the country.

The Insurance Commission notes that there are 23 micro mutual benefit associations, 18 life insurance companies, 24 non-life insurance companies, 42 rural/ cooperative bank agents and around 100 microinsurance agents engaged in the provision of microinsurance products.