THE number of Filipinos with some form of insurance has increased to 28 million, the majority of whom are covered by microinsurance policies that pay out benefits for contingent events resulting to loss of income.
At a joint news conference on Thursday by the Insurance Commission and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) of the German government, Insurance Commissioner Emmanuel F. Dooc said the so-called market penetration of insurance products in the Philippines has increased tremendously, from only 14 percent in 2009 to 28 percent in 2014.
Of the total, around 19 million, or 68 percent, have been sold to low-income Filipinos who wish to have some form of risk cover against natural disaster and such other contingencies that result to loss of income.
Dr. Antonis Malagardis, program director of the Regulatory Framework Promotion of Pro-poor Insurance Markets in Asia (RFPI-Asia), said that microinsurance is one of the measures that promote financial inclusion in a country like the Philippines that has enjoyed high economic growth in recent years. This was why the German government is helping to improve the regulatory and supervisory framework of the pertinent agencies in Asia to promote microinsurance coverage among the poor through RFPI-Asia which has a €3-million budget.
Malagardis said microinsurance has shifted focus and now provides cover for contingencies that result in the loss of income of the policyholder. As an example, he cited crop insurance where insurance coverage has shifted to focus on specific business losses like the lack of rain and other weather-related risks.
Dooc said the microinsurance policy focus on providing insurance benefits to the poor for contingent events make it a major initiative in promoting financial inclusion and comes at a time when the Philippines enjoys high economic growth.
According to the new Insurance Code, premium payment for microinsurance cover, computed on a daily basis, should not exceed 7.5 percent of the current daily minimum wage rate, and the maximum sum of benefits should not be more than 1,000 times the current daily minimum wage rate for nonagricultural workers in Metro Manila.