51.7M Filipinos covered by micro-insurance as of Q1 2023, IC says
MANILA -The number of Filipinos covered by micro-insurance jumped by 15.4 percent to reach 51.7 million in the first quarter of 2023 from 44.8 million in the same period last year, according to the Insurance Commission (IC).
Such a significant increase was observed as the IC pushed for micro-insurance as a platform for broadening access to financial services among Filipinos.
Micro-insurance products include micro-life and health insurance, and micro-agricultural insurance.
There are also micro pre-need products available, such as micro-memorial, educational, and pension plans.
Data from IC show that out of the lives insured under micro-insurance policies, 28.82 million or 55.7 percent are insured by policies issued by mutual benefit associations (MBAs).
The remainder, 22.9 million lives, are insured by the big players or insurance companies.
Among MBAs alone, the number of lives covered through micro-insurance increased by 12 percent from 25.7 million in the first quarter of 2022.
In terms of premiums collected, micro-insurance policies turned in P3.25 billion, surging by 22.5 percent from P2.65 billion.
MBA alone accounted for P1.78 billion in premiums, rising 13.4 percent from P1.57 billion.
There were 48 regulated entities that were actively engaged in the sale of micro-insurance as of the first quarter this year.
Among them, 23 were MBAs, 12 were life insurance companies; and 13 were non-life insurance companies.
The IC actively promotes micro-insurance as a means for financial inclusion by allowing low-income earners to hedge against various risks such as death, injury and damage to livelihood or property.
Micro-insurance refers to insurance products that can be purchased for premiums which should not be more than 7.5 percent of the minimum wage in Metro Manila, computed daily.
In this light, Insurance Commissioner Reynaldo A. Regalado urged professional financial advisors to continue crafting insurance and financial solutions that will be more responsive to the needs of Filipino consumers in order to promote financial inclusion in the country.
In a related development, Malayan Insurance Co. Inc. said the price of premiums for non-life insurance products have been rising due to the hardening reinsurance rate and the country’s poor risk rating.
In a press briefing, Malayan Insurance senior vice president Eden R. Tesoro said that although reinsurance drove up the cost of premiums, this has enabled insurers like Malayan to continue to offer products, such as those that cover natural disasters, which they will not be able to sustain on their own.
Reinsurance coverage, the insurance of insurers, keeps companies solvent and operational despite paying for large losses.
Despite reinsurance’s impact on premiums, Tesoro emphasized that Filipinos should be more vigilant in protecting their hard-earned assets.
She said that with the rising frequency and severity of natural disasters as well as increasing costs of living, Filipinos should prepare for hard times by safeguarding themselves from insurable perils.
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