THE Insurance Commission (IC) is rolling out the first private sector-led catastrophe insurance facility that will help Filipinos become more resilient in times of disasters, according to the Department of Finance (DOF).
In a statement, DOF said the Philippine Catastrophe Insurance Facility (PCIF) is already being finalized by the IC, the National Reinsurance Corp. of the Philippines (Nat Re), and the Philippine Insurers and Reinsurers’ Association (Pira).
The facility, IC Commissioner Dennis Funa said in a report to Finance Secretary Carlos G. Dominguez III, would allow non-life insurers to cede their catastrophe risks to the new insurance pool or facility.
“We recognize the significant role that the non-life insurance industry should play in ensuring the Philippines’s catastrophe resilience and in bridging the catastrophe insurance gap that we need to urgently address as our country is among the most vulnerable to the onslaught of natural calamities,” Funa said.
DOF said the PCIF will share the pooled risks back to the non-life insurers and enable these companies to more efficiently manage their exposures and boost their capacity to take in more risks.
Funa said with the PCIF in place, communities, businesses and even households can hasten their recovery after large losses arising from catastrophic events such as typhoons and earthquakes.
Apart from these, Funa said, the PCIF aims to create a risk-appropriate rating environment that ensures sustainable premium rates. This, he said, will provide the public wider access to catastrophe insurance protection.
DOF said the PCIF aims to pool resources available in the country to keep most of the funds here and enable non-life insurers to grow the premium base. This would allow them to expand the range of catastrophe insurance products available to Filipinos.
Last year, the IC, Nat Re and PIRA signed a memorandum of understanding (MOU) committing them to cooperate on the establishment of the PCIF.
Domestic insurance companies that provide catastrophe coverage currently reinsure their risks overseas.