INSURETECH advocate Etiqa Philippines has tied up with open finance platform provider UBX to offer insurers an alternative payment of premiums in a more flexible manner to cope up with the increasing cost of living and credit interest rates.
Inflation rate in the Philippines reached 8.6 percent in February of this year—the highest in Southeast Asia. As it weakens the nation’s economic growth, this adds to the burden of ordinary Filipinos in battling higher prices for their basic daily expenses, not to mention the loan interest of those indebted.
These mounting circumstances eventually affect their spending appetite for other needs like insurance premiums if ever they avail of such. With this in mind, insurers are challenged to lower their costs, if not change their pricing, to reach more clients.
“Whether it was about their health, incomes, or properties, Filipinos have battled with different uncertainties in the last three years. This reality has further highlighted the need for insurers to take added measures to bring insurance closer to the average Filipino. This has been the industry’s mission since the beginning,” said Noel Tordesillas, head of e-channel in Etiqa Philippines.
In doing so, the company has taken a cue from the success of the Buy Now, Pay Later (BNPL) scheme, wherein consumers aiming to spread out the cost of big-ticket purchases can get their urgent needs and defer their payments to a later time sans any interest. From only $18 billion in 2020, this business model is seen to grow by 14 percent annually to $44 billion in 2027 worldwide.
“As we join this thrust, we have made it a point to align with partners within and outside the industry who share our vision—to empower more Filipinos to achieve financial security, especially amid inflation, through digital solutions and technology,” he noted.
Through its pioneering “Insure Now, Pay Later” scheme, Etiqa’s policyholders can now settle their premiums on an installment basis in a seamless way thanks to BUx’s end-to-end payment solutions platform and Splix’s transact-now-pay-later platform.
With or without credit cards, clients can break their dues into smaller sums. This is even more convenient with the 60,000 payment channels of BUx that allow them to settle their dues via online banking, e-wallets, or over-the-counter.
“While payment and collections are the primary thrust of this partnership, through UBX we can bridge technologies from different industries—fintech to insurtech—for the benefit of the public. Not only that, we were also able to provide a less intimidating payment plan and an additional smooth and touchless payment platform for consumers. We are positive that this process would further ease the long-standing misconception about insurance as irrelevant, inaccessible and expensive,” Tordesillas said.
