Philippine nonlife firms are looking to microinsurance to drive up business amid promising opportunities in the segment as well as industry concerns on capitalization requirements.
Pedro P. Benedicto Jr., chairman of the Philippine Insurers and Reinsurers Association (PIRA), said in a statement that the group is promoting the development of microinsurance among its 84 member companies.
“Microinsurance is one of the growth areas the industry is seriously looking into,” Benedicto said. “And [beyond the] business potential, PIRA is looking at microinsurance as a tool to alleviate poverty and help poor Filipinos protect themselves from the risks they are facing.”
According to the United Nations, microinsurance is intended to protect the working poor, particularly those working in the informal economy, thus premiums are priced accordingly.
On Tuesday, Benedicto said that PIRA supports the holding in Makati City of the 6th Asia Microinsurance Conference on July 24-25.
The conference gathers microinsurance experts from all over Asia to expound on the theme “microinsurance as a growth catalyst for insurance to reach out to the masses.”
In an invitation for participants, event organizer Asia Insurance Review (AIR) said microinsurance has been growing rapidly in Asia over the recent years.
The Singapore-based trade publication said the region accounts for 80 percent of current microinsurance initiatives all over the world.
AIR expects “exponential growth” for microinsurance as many companies are already rapidly moving to capitalize on the emerging opportunities in this market segment.
“New products covering a variety of risks have been piloted and distributed to poor households through an increasing diversity of channels,” the magazine said.
“More commercial insurers have also entered the low-income market, thus creating significant capacity for scale,” it added.
At least 33 of the 50 largest commercial insurance companies in the world now offer microinsurance, up from only seven in 2005.”
Last April, the Switzerland-based Microinsurance Innovation Facility (MIF) reported that microinsurance covers some 500 million of the poor across the globe, thanks to the increase in low-premium products in Asian markets, especially the Philippines.
The MIF said innovations in microinsurance include new products that cover a variety of risks and that are distributed to poor households through an increasing diversity of channels such as banks, retailers and cell phone companies.