The number of Filipinos who benefited from low-cost but quick-disbursing microinsurance policies in 2014 proved 11 percent higher than originally reported to 31.1 million, instead of only 28 million, based on a study conducted by the German International Cooperation (GIZ).
The GIZ, Department of Finance-National Credit Council and the Insurance Commission (IC) released only last week the study report on the Regulatory Impact Assessment on Microinsurance (RIA-MI), which highlighted the cooperation between the public and private sector resulting in the success of microinsurance in the Philippines.
According to the study, the partnership between the government and private insurance companies was a major force driving the agenda of using microinsurance as a tool for achieving financial inclusion in the Philippines.
“The private sector has been playing an important role in adding to strategies, concepts and tools, but mainly, in delivering the products using appropriate and tailor-fitted processes and distribution mechanisms,” the report said of the participation of the private sector in helping promote microinsurance.
In the aftermath of Supertyphoon Yolanda in late 2013, the total payouts made by private insurance companies to survivors amounted to P700 million, with the average amount paid per claim pegged at P4,777.
Insurance Commissioner Emmanuel F. Dooc said microinsurance is one of the tools used by the government to achieve financial inclusion for the poor, because it provides immediate relief to the suffering poor without taking away their dignity.
“Insurance benefits are not dole outs that impair the dignity of those who receive it. The benefits are derived from honest labor, preserving the honor and dignity of the beneficiaries,” Dooc said.
This was why the IC has focused on providing a framework for insurance companies to make a profit from providing microinsurance products, which, because of the big logistical requirements and capital needed to market, administer and pay-off claims, used to be avoided by the big
insurance companies.
“Clear policy direction and proportionate regulatory guidelines provide the driving force to insurance market development. It provides certainty for the industry to invest in microinsurance activities. It gives public confidence to trust microinsurance products.
The good numbers in microinsurance, as elaborated in the RIA-MI report, is a product of multistakeholders dialogue and cooperation,” Dooc said.
GIZ Regulatory Framework Promotion of Pro-Poor Insurance Markets in Asia Program Director Dr. Antonis Malagardis said the world looks toward the Philippines as the leader in microinsurance, with the huge percentage of the population that has microinsurance coverage.
“The journey of the Philippines in microinsurance market development has been a source of inspiration and knowledge by many jurisdictions not only in Asia but also in other continents. This RIA-MI on microinsurance is a first known initiative of a systematic and focused methodology to determine the impact of policy and regulatory reforms to market development.
It provides insurance supervisors and other stakeholders, not only in the Philippines, with good lessons and recommendations,” Malagardis said.