News & Stories

Promoting disaster risk insurance and sharing the Philippines’ experience of creating inclusive insurance markets

RFPI Asia at the 11th International Microinsurance Conference in Casablanca, Morocco. 3-5 November 2015.

Back-to-back Event, Nov 2nd: Roundtable Discussion around the Development of the Diagnostic Toolkit for Insurance against NatCats for MSMEs in the agricultural and mining sector.

The Event: After the launching event of the toolkit development in Manila, October 21st 2015, which engaged the Philippine insurance landscape in two panel discussions, the 11th International Microinsurance Conference (IMC) was an ideal moment to organize a further consultation – back-to-back to the conference. This allowed an international roundtable discussion with microinsurance practitioners from Germany, Canada, the United States and Indonesia. The group was composed of International Donor Organizations, distinguished advisors including the Microinsurance Centre and the Indonesian Financial Services Authority, OJK, represented by the Commissioner for Non-Bank Financial Institutions Firdaus Djaelani, the Deputy Commissioner Dumouly Pardede and Mr. Moch. Muchlasin, Director of the Non-Bank Sharia Financial Institutions Department.

After the consultant for the toolkit development Gaby Ramm had introduced the current Analytical Framework to the participants, a lively discussion emerged around key topics such as the practicability of the diagnostic, the advantages and disadvantages of an Integrated Risk Management Approach and the ownership and institutional coordination and cooperation necessary, when striving for a coordinated approach to MSME’s resilience to NatCats. Furthermore many contributions pointed toward the necessity for continuing the activities with regards to possible trainings, workshops or the development of an IT-based application facilitating the implementation of the Diagnostic Toolkit.

Background: RFPI Asia has been focusing its activities and agenda in the year 2015 on the topics of access to insurance for MSMEs and the role for insurance in strengthening disaster resilience. In this spirit, the newest initiative is related to the development of a “Diagnostic Toolkit for Insurance against Natural Catastrophes for MSMEs in the agricultural and mining sector” – linking the 2 focus areas. Furthermore, funding from the GIZ Challenge Fund allows cooperating with related projects in Ghana and Mongolia.

MSMEs, as entities, are highly vulnerable to the impacts of climate change, since their limited resources often prevent the smooth recovery of business operations following increasingly extreme climate events. Here, insurance is an efficient and effective tool of financial risk management for MSMEs: Smoothing the cash flows of MSMEs when insured risks occur, can minimize the disruptions to business operations, as a precondition for limiting employment effects of NatCats.

Consultant to the project, Gaby Ramm presents the current concept of the toolkit to the participants.

The Commissioner of the Indonesian Insurance Commission OJK, Firdaus Djaelani shares his insights regarding the toolkit from the regulator’s perspective

Strategies for the development of inclusive insurance markets. Senior Adviser Dante Portula shares the Philippine experience of promoting inclusive insurance markets

Once again, RFPI Asia was on the agenda of the annual International Microinsurance Conference. In Session 16: Strategies for the development of inclusive insurance markets, Dante Portula, Senior Adviser at RFPI Asia, presented on the topic of “Promoting an inclusive insurance market: The Philippine’s experience” and discussed with the other panelists on lessons learned and best practices. The other presentations shed light on similar experiences from South Africa and Zambia.

Latest figures provided by the Philippine Insurance Commission illustrated the impressive progress made since Microinsurance regulation became effective: Coverage in 2014 has reached 31.1 Million, starting from only 4.9 Million in 2009. This represents 62% of the integral industry coverage, whereas the contribution to the net premium of the industry remains relatively low (2%).

The key messages of the presentations made clear that this has only been made possible due to the development of an enabling Regulatory Framework for Microinsurance and joint efforts of stakeholders towards the creation of financial literacy. These clear signals have provided sufficient incentives for the private sector to continuously invest in innovative product development and enhancing distribution channels. Other success factors have been to engage in multi-stakeholder dialogues and consultation including the industry – creating a truly inclusive market development process.

Dante Portula presents latest market developments in the Philippine microinsurance market.

Click here to go to the 11th IMC Website