Microinsurance in the Philippines could become as successful as microcredit as it is expected to gain ground amid increasing number of providers and rising demand, Finance Undersecretary Gil S. Beltran said Tuesday.
According to a report that Beltran prepared, there has been an increase in the number of microinsurance products, with some coming from established insurance companies.
Other providers of low-premium insurance include cooperative insurance societies, mutual benefit associations, pre-need companies and health maintenance organizations.
Beltran said that in the Philippines—considered to be one of the more developed microinsurance markets in the world—products are being delivered through nontraditional means by partnerships with microfinancing institutions, as well as through microinsurance agents and brokers.
“Compared to commercial (mainstream insurance) products, microinsurance products are affordable, involve simple contracts, have relaxed terms and conditions,” he said. “Some providers even offer policies that are tailor-fit to the buyers’ needs.”
Also, lower capitalization requirements for microinsurance providers as well as relaxed licensing requirements for agents are expected to foster an enabling environment for the business, Beltran said.
“To ensure greater client protection, the government is working with stakeholders toward the formalization of informal insurance providers, institution of mechanisms for redress and grievance, and encouragement of the use of alternative means to resolve disputes,” he added.