MANILA, Philippines—International experts cited Philippine achievements in promoting microinsurance, even as they called for global efforts to protect consumers as the industry continues to develop.
According to a report on the 8th International Microinsurance Conference held in Tanzania last November, the high illiteracy rate among potential customers makes them vulnerable to fraud.
“A main concern of regulators…is consumer protection,” said the 98-page report that the Germany-based Munich Re Foundation released in March.
“Some clients do not even know they are buying insurance, as it is known, with credit life,” the report said. “Those who know they have it often do not understand it.”
Credit life is a policy meant to ensure that a borrower’s debt, such as a mortgage, is paid off if he or she dies.
During the forum, the Insurance Commission—represented by Evelyn Singun, head of the IC’s investment division—shared the Philippines’ experiences in promoting microinsurance.
The IC defines microinsurance as insurance with premiums of not more than 5 percent of the daily minimum wage for non-agricultural workers in Metro Manila. Also, the insured amount should not be more than 500 times this minimum wage.
With such wage currently set at P456, microinsurance premium should not exceed P22.80 and the amount insured should not exceed P228,000.
According to the IC, there are 93 insurance products and more than four million policies that comply with this definition.
The government has set a goal of every Filipino having insurance protection by 2020.
In the Philippines, “the main delivery channels for microinsurance are brokers, insurance agents, microfinance institutions, rural banks and cooperative banks,” Munich Re said.