Europe reinsurers eye Phl crops market

Some European reinsurance companies are interested to invest in the country’s crop program but cannot fully penetrate the market due to the current state of the Philippine Crop Insurance Corp. (PCIC).

Former agriculture secretary and now Bohol Rep. Arthur Yap said the world’s leading reinsurers Munich Reinsurance Co. and Swiss Reinsurance Co. Ltd. have signified their intention to invest in the Philippines to ensure that farmers would not suffer heavy financial losses during calamities.

“We need to change the current system of our agriculture insurance. There are big reinsurance companies who want to enter but they need a partner locally,” Yap told reporters on the sidelines of the Sustainable Agriculture Forum of the European Chamber of Commerce of the Philippines on Wednesday.

However, the PCIC is not allowed to do reinsurance as part of its mandate which means that changes in the agency’s charter would have to be made first.

“We need to change the charter and allow them to reinsure. Give budget to the PCIC and to make sure that money is only used for that. We will design programs where the recapitalization of the agency will really go the reinsurance of products,” Yap said.

“Once we have the reinsurance, PCIC can already partner with the Europeans and that can be used to give to our local farmers,” he added.

Yap already filed House Bill 3560 last year which mandates PCIC to offer index-based insurance coverage and allow it to engage in reinsurance.

It also called for additional funding source for PCIC, and to allow it to impose higher penalties on spurious claims.

Yap is hopeful the bill would be passed next year, emphasizing the importance of crop insurance amid climate change.

“The House is very much ready and supportive. We will be asking support from senators as well,” Yap said.

“It’s a new discussion here, but it’s not a new discussion in the world and we just need to convince some more senators to support the measure,” he added.

The weather-based insurance program will be largely based on temperature, wind speed, level of rain, and drought among others.

“If those indices are breached, we already need to pay the farmers. We no longer need to wait for their crops to be totally damaged before we pay them,” Yap said.