The Philippine government aims to have 50m Filipinos covered by microinsurance by 2022, according to the head of the Insurance Commission (IC).
Citing the unaudited 1Q2020 reports submitted by insurance firms, IC Commissioner Dennis Funa said there were around 48.22m Filipinos covered by microinsurance in the country. This number is around 29% more than the 37.41m recorded a year ago, reported BusinessWorld.
Impact of COVID-19
At the moment, the microinsurance market, as is the case with the overall insurance sector, is facing challenges due to the COVID-19 pandemic.
Mr Funa said, “We are still in the process of gathering pertinent data to have an overview on microinsurance this year in consideration of the events that have transpired… However, we are expecting a significant increase in the number of claims for this year, not only for microinsurance policies but also for entire insurance industry as a whole, considering that 2020 is marred by a series of catastrophes such as the Taal volcano eruption, the COVID-19 outbreak, typhoon Rolly and recently, typhoon Ulysses.”
Mr Jun Jay Perez, executive director at Microinsurance MBA Association of the Philippines (MiMAP), noted the decline in the revenues of the association’s members, even as they continue to pay claims and fixed costs associated with their operations.
He said, “As of September 2020, revenues of 18 microinsurance mutual benefit associations (Mi-MBAs) under the MiMAP network is down by a combined amount of PHP834m ($17.3m) compared with the same period last year.”
“Recruitment of new members is also a challenge given the difficult financial situation of the poor and low-income households, not to mention the restrictions on the mobility of field staff, suspension of mass gatherings and the lack/limited access to the Internet of the target market,” he added.
There has also been a challenge in processing claims. Mr Perez said, “The situation forced the Mi-MBAs to use an alternative medium for gathering claims requirements such as e-copies, validation pictures, and payment of claims through e-wallets and remittance centres, to still pay the claims benefits within one to five days of the date of notice.” contributions and second in terms of persons insured.