PH now a model of microinsurance promotion in Asia
The Philippines emerged on top of emerging economies in Asia in terms of microinsurance promotion, insuring 20.4 percent of its population, or 19.95 million Filipinos, by the end of 2013.
The Department of Finance (DOF) said other emerging economies in the region lagged far behind the Philippines in the area of microinsurance. Now, the country is serving as a model for other emerging economies.
Citing figures from the World Bank, the DOF said that the microinsurance penetration rate in the Philippines last year was ahead of Thailand’s 14.1 percent, India’s 8.9 percent, Bangladesh’s 5.1 percent, Malaysia’s 3.6 percent, and Pakistan’s 3 percent.
The DOF also said other emerging economies covered by the survey performed much worse. The penetration rate of microinsurance in China stood at only 0.9 percent, in Indonesia it was 0.5 percent, while in Vietnam, it was 0.2 percent.
Finance Undersecretary Gil Beltran said the penetration rate of microinsurance in the Philippines grew substantially from only 3.3 percent in 2008.
He said the growth of microinsurance in the country was credited largely to the model involving cooperatives.
Microinsurance products are commonly marketed among members of cooperatives.
Unlike regular insurance, microinsurance caters to low-income earners. Its premium is much cheaper and its benefits smaller.
Also, the microinsurance products sold through cooperatives are hybrid in nature, having the features of both life and non-life insurance. This means the products grant benefits in case of death or loss of property.
In particular, the premium for microinsurance products is not more than 5 percent of the current daily minimum wage, while benefits amount to no more than 500 times the daily minimum wage.
According to Emmanuel Dooc, head of the Insurance Commission, the government has set a goal of further increasing the penetration rate of microinsurance over the medium term.
He said the estimated 27 million poor Filipinos should be covered by microinsurance by 2016.
“We want to attain this goal by the end of President Aquino’s term,” Dooc said.
More partnerships between insurance firms and cooperatives would help the commission attain its goal of further increasing the penetration rate of microinsurance in the country, he said.
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