AS of 2014, 28 million Filipinos have micro-insurance coverage, according to the Insurance Commission (IC).
The agency sees a continued growth in this segment as more Filipinos turn to micro-insurance for protection and financial security, especially for calamities.
“Micro-insurance has expanded as low-income Filipinos in the countryside realized that micro-insurance products can empower them. It can provide them protection and financial security especially in time of calamities and this was tested during typhoon Yolanda,” said IC Commissioner Emmanuel Dooc at the sidelines of Cebu Insurer’s Club Inc. (CIC) induction of officers last Friday.
Dooc noted over 140,000 household in the affected provinces in the Visayas were paid from their micro-insurance coverage. Although, the amount paid was meager at the range of P5,000 to P10,000, Dooc said this enabled the typhoon victims to buy light housing materials to replace their damaged houses.
“It is a lot better than receiving a bag of relief worth P500. More importantly, getting insurance proceeds preserve the dignity of an individual because insurance benefits don’t come as dole outs,” he said.
Micro-insurance is an insurance product priced at between five to 7.5 percent of the minimum daily wage, while benefits amount to no more than 500 times the daily minimum wage.
CIC’s new president Rosario Gejon said the organization will be a staunch advocate of micro-insurance by holding activities like basic non-life insurance seminar, symposium to universities, and tapping local government and non-government organizations in conducting insurance literacy programs to the grassroots level.
According to Dooc, the insurance industry did well last year despite a slight slowdown in the performance of life insurance.
Non-life insurance grew by 15 percent from P26 billion in total premium income to P31 billion in 2014. Life insurance, however, slightly dipped by seven percent to P188 billion premium income from P198 billion in 2013 due to lower sales performance.
The insurance industry is dominated by life and non-life sectors, but also includes the reinsurance, pre-need and mutual benefit associations (MBA).
This year, Dooc sees the non-life sector to continue growing while he remains hopeful that the life insurance sector will recover this year from the slow sales in 2014.
“Overall, I foresee a better year for the entire industry. We expect to generate P200 billion in total premium production for both life and non-life sectors,” said Dooc.
IC’s goal is to bring financial inclusion to more Filipinos, especially those in remote parts of the country, through financial literacy programs and expanded media exposure to reach as many Filipinos across the country.
Asked about the factors that hinder most Filipinos from getting insured, Dooc said buying insurance is still not a priority in many households because for them to get insured they must have enough savings. However, he believes that with the improving economy, better savings rate and extra disposable income, more Filipinos will now be aware of getting insurance for protection.
Dooc said the IC is not just eyeing the low-income Filipinos in the countryside as target market but also the overseas Filipino workers (OFW) and the ballooning business process management (BPM) workers, which they considered the “sweet spot” for the insurance industry.
The OFW and BPM markets have combined funds of $40 billion which if IC can tap will improve the insurance penetration of the country and the performance of the insurance industry, said Dooc.
He said the IC is also gearing up for the full Asean integration and said that the opening of the southeast asian markets will allow domestic players to seize more opportunities.
He also expects continued consolidations and mergers with the integration.
From 130 companies, the total number of industry players dropped to 99 this year amid mergers and consolidation as a result of capital buildup and strict implementation of law.