(Speech delivered by Insurance Commissioner Dennis B. Funa at the Insurance Commission’s 71st anniversary celebrations on January 28, 2020, at the Philippine International Convention Center)
Honorable Executive Secretary Salvador Medialdea, former commissioners of the Insurance Commission, former Commissioner Emmanuel F. Dooc, former Commissioner Santiago Javier Ranada, former Commissioner Benjamin S. Santos, and former Deputy Commissioner Vida T. Chiong, distinguished friends from the industry, ladies and gentlemen.
Blessed morning to all!
It is my honor and pleasure to welcome you to the Insurance Commission’s 71st founding anniversary!
One good thing about the date of our anniversary is that it coincides with the first month of the Chinese New Year.
I consider it providential because the new year ushers in an aura of blessed beginnings.
Truly, we have real good reasons to be thankful. We have reasons to be grateful. We have good reasons to be hopeful.
Looking back at the past year, it had been anything but easy for the Commission and our regulated entities. HMO was in transition; pre-need remained on a path of recovery; and as for our insurance companies and MBAs, well, they found themselves contending with a plethora of issues and challenges.
The first challenge of 2019 was the high inflation rate, which was carried over from 2018, affecting all industries, not the least of which was the financial sector.
Fortunately, the country’s economic managers were able to steer the inflation rate downward so that by August 2019, the rate was down to 1.7 percent. On average, the full-year inflation rate leveled at 2.5 percent, which was within the government’s target band of 2 percent to 4 percent.
Around the globe, changes were in full swing. IFRS 17, which is touted to cause the most significant change in insurance accounting in the last 20 years, is nearing implementation.
Knowing how complex and far-reaching the impact of IFRS 17 will be on companies’ financial disclosures and operations is a challenge that keeps us, and will keep us, on our toes.
Technological revolution proved to be the major disruption and the trigger of changes to come. Borderless transactions meant we had to keep up with the digital innovations unfolding around us, and these included usage of artificial intelligence, blockchain, cryptocurrency, and other fintech innovations.
Undoubtedly, technology has been largely instrumental in ensuring that access to insurance will be faster and easier for our people. And we are proud to say that your Insurance Commission will be up to the task!
All considered, we have to accept that embracing InsurTech is a necessity since we have a fast-evolving clientele that adapts to the changes of our electronic environment.
In times past, insurance clientele are mostly middle-aged breadwinners who do not really understand the complexities of the policies that they are buying; but these days, our clients come from all walks of life—senior corporate executives, middle-agers, millennials, entrepreneurs, OFWs, street vendors, farmers, and laborers—all of them expecting to be served real time, and served fairly at that.
Our present crop of policyholders are well-informed, they know their rights, and it is to our best interest that we provide them with the quality of products and services that they deserve, on-time, all the time!
Of course we also cannot forget 2019 for the disasters that took place during its environs—earthquakes, typhoons, fires and other calamities—these are additional burden to our people. This is also a stark reminder of why it is necessary to obtain insurance cover.
Given these challenges on our plate, the only way is to move forward. To master the chartered path and to blaze new trails on uncharted realms. Let us forge ahead.
Let us forge ahead in strengthening our insurance framework. Let us move forward in preparing to meet new global standards, in keeping up with digitization and in empowering our people through insurance.
Later today, your Insurance Commission will be signing a memorandum of understanding with Philippine Insurers and Reinsurers Association (PIRA), the National Reinsurance Corporation of the Philippines (NatRe), to set in motion the Philippine Catastrophe Insurance Facility. With this, we aim to provide the framework for greater financial resilience to the vulnerable sectors of our society. We want our target crowd to appreciate the importance of property insurance as a risk transfer mechanism in the event of disaster.
And in a country, such as ours, that is beset by a host of disasters, the desired output of the MOU is a most welcome development.
I would also like to underscore that as the insurance industry grows and develops, there is an impetus for our micro-insurance sector to grow, as well.
And grow, it has. As of the third quarter of 2019, we already have 40 million individuals covered by micro-insurance. And we firmly believe that there is room for more growth. Ambitious, yes, but this vision is not at all whimsical. It is practical, doable, and one driven by hard realities.
We never know what life holds for us. Who would have thought that the Taal Volcano would suddenly erupt with such ferocity? The eruption impacted on so many lives. Who would have known that too early in the year, the country will be grappling with new strains of coronavirus when we have been so comfortable with the thought that modern medicine can conquer almost every disease?
Friends, as we enter a new year and a new decade, we are indeed “Charting New Frontiers.” New frontiers can be scary; they bring uncertainties. But I can recommend a couple of antidotes.
First, fight uncertainty with certainty. Insurance is one such certainty, it provides security against risks; it gives hope and delivers peace of mind.
Second, when uncertain, hold hands. Unity breeds courage, allowing for a good fight against anything, and gives a better margin for success.
To all of you, thank you for holding the hands of the Insurance Commission as we cross new boundaries and trek into new territories.
With your support and cooperation, we can boldly proclaim: “Let’s cross over to greater heights and new horizons!”
Again, congratulations for a rewarding 2019, and welcome to a challenging but exciting 2020 and a hopeful 71st year for the Insurance Commission!
Mabuhay ang Insurance Commission!