UnionBank, partners push microinsurance to cover untapped $4.2-B PH market
Union Bank of the Philippines has entered into a partnership with a Singapore-based “insurtech” firm and a regional e-commerce platform in a bid to provide micr0insurance products to uninsured Filipinos—a market estimated to be worth $4.2 billion.
In a statement, insurance service provider Igloo, UnionBank and Akulaku said an entire range of personal accident insurance products are now available on the digital platform of the Aboitiz-controlled bank.
These products include those that are tailored for local families and households, and customized solutions dubbed “Kasambahay” and “Panatag Ako.”
“Through the partnership, Igloo’s microinsurance products are now made available on UnionBank’s API Marketplace,” UnionBank senior vice president and fintech group head Arvie de Vera said. “This plays a vital role in enabling and boosting insurance penetration rates in the Philippines through innovative means, and contributes to our shared goal of financial inclusion as Filipinos will gain greater access to affordable insurance solutions.”
Igloo employs big data, dynamic risk assessment, and expedited claims management, to provide partners with widened distribution networks and insurance products. Since the company was founded in 2016, Igloo has already benefited over 15 million customers in Singapore, the Philippines, Thailand, Vietnam and Indonesia.
Through UnionBank and Akulaku partnerships, Igloo provides unique products that have been specially designed for the underserved population in lower-income households. These microinsurance products are easy to purchase, simple to understand and highly affordable with three-, six-, nine-, and 12-month payment plans.
The company noted that the Philippines continues to have one of the widest “insurance gaps” in the world.
In 2018, the insurance penetration rate in the country stood at less than 1 percent, and the relative cost of the insurance gap represented 1.3 percent (equivalent to $4.2 billion) of gross domestic product .
To close this gap, the market for microinsurance products is getting renewed focus, with the penetration rate of these “sachet” products in the Philippines now being one of the highest globally, making up to 25 percent of its population last year, and expected to reach 48 percent by 2022.
“In this technology-driven era, Igloo sees the need for the transition from a traditional insurance industry into a digital-driven insurance ecosystem,” Igloo chief commercial officer Raunak Mehta said. “People today are exposed to highly personalized experiences driven by data, and their experience with insurance products should be no different. Our digital-first approach, growing product portfolio and best of practice learnings from the region can help to increase insurance awareness and provide Filipinos with access to affordable insurance that addresses their needs and bridges the insurance gap in the country.”
Ian Chan, merchandising department head of fintech startup Akulaku said that, with over 6 million users on the platform, the company sees “a huge income disparity in the Philippines.”
“Insurance is important for every Filipino and it has proven its worth during the COVID-19 pandemic,” he said. “By partnering with Igloo, we could make insurance possible for every Filipino across all income brackets.”
