To make agriculture insurance widely available and accessible to farmers, the state-run Philippine Crop Insurance Corp. (PCIC) is eyeing to partner with private nonlife insurers to sell cheap coverage and shoulder risks.
“Insurance is one way to help farmers recover from … calamities. However, the sector is also faced with an insurance protection gap due to the scarcity of insurance products covering their crops and produce,” Insurance Commissioner Dennis Funa noted.
Draft rules released by the Insurance Commission (IC) showed the regulator’s plan to connect the PCIC with the private sector to pilot agriculture insurance this year.
The IC defined agriculture insurance under the planned PCIC-private sector cooperation scheme as coverage for “produce of or assets used in cultivation of crops (such as grains, cereals and other crops as well as fruits and vegetables), livestock (like dairy, cattle, hog and beef), rearing, animal husbandry, poultry farming, dairy farming and fisheries including all value-chain activities like production, transportation, storage, processing, packaging, preservation and marketing.”
Citing PCIC data, Funa said insurance penetration among farmers ranged between 8-14 percent among rice growers and as low as 2-6 percent among corn farmers as of 2017.
Under its charter, the PCIC currently provides small farmers, or those cultivating land smaller than seven hectares, crop insurance covering losses due to bad weather, diseases and pests and natural disasters.
Funa said the PCIC had expressed willingness to “provide and share capacity to private insurance companies that would like to provide agriculture insurance.”
As insurers build their capital per the Amended Insurance Code and develop their technologies, they could “improve cost efficiency in the delivery of agriculture insurance to farmers located in remote areas,” he said.