ABOUT half of the Philippine population will be covered by microinsurance products in two to three years, as the government rolls out updated policy frameworks aimed at making cheap policies even more accessible.
Insurance Commissioner Emmanuel F. Dooc told reporters that from the 30 million Filipinos covered by microinsurance policies as of end-2015, microinsurance penetration is expected to reach up to 50 million in the next two to three years. At end-2015, a total of 38 million Filipinos were covered by insurance.
Microinsurance products have lower premiums amounting to a maximum of 7.5 percent of the minimum daily wage of a non-agricultural worker in Metro Manila, usually paid daily to serve those who cannot afford to pay higher premiums, such as farmers and teachers.
Microinsurance contributions are being paid mostly to mutual benefit associations (MBAs) as well as cooperatives, although a number of bigger and more established insurance companies have also ventured into it.
Since microinsurance products are affordable—policies cost only over P30, premiums contributed by MBAs selling microinsurance compose a mere 3 percent of total industry premiums.
But Dooc said the share of MBAs’ total premium income to total industry premiums was expected to inch up to 5 percent over the next two years.
During last Friday’s launch of the “Kasama Lahat” campaign as part of the introduction of the updated microinsurance frameworks, Dooc disclosed that micro-agri, micro-health as well as micro-pre-need products would soon be available in the market.
Dooc said private insurers were now eyeing to gain from the microinsurance boom in the country.
“In the past, traditional insurers saw the poor as beyond the reach of insurance. With microinsurance, they realized that the only thing necessary for the poor people to buy insurance is to make insurance affordable and accessible,” he said.
As for the enhanced regulatory framework for microinsurance, Dooc said it “seeks to broaden the scope and deepen the reach of microinsurance providers without sacrificing their viability and sustainability while protecting the insuring public.”
“In the enhanced regulatory framework, we clarify and delineate the roles and functions of microinsurance regular agents, brokers and distribution channels, while providing guidelines for product bundling and sharing of risks among local and foreign insurance entities,” he added.