BACOLOD CITY: The Philippines is one of the best examples of microfinance insurance markets globally, but insurers and the government must make sure that these kinds of insurance products reach more low-income people.
This was the challenge issued by global organization Microinsurance Network during an Asia Pacific Economic Cooperation (APEC) meet here on Wednesday which discussed the microfinance landscape in the Asia-Pacific region.
According to Microinsurance Network, a global multi-stakeholder platform focusing on insurance services for low-income populations in emerging markets, 27.9 million people in the Philippine were covered by microfinance products as of end-2014.
This is out of the total 66 million people covered by microinsurance in APEC countries, said Microinsurance Network chair Michael McCord during a press briefing on the APEC meeting on disaster risk finance.
“The Philippines itself has been a tremendous case study for microinsurance. It is really one of the best examples across the globe for microinsurance. Here, you have almost 30 percent of people covered by microinsurance for various kinds of products,” he said.
McCord pointed out that what made the Philippines one of the best markets for microinsurance was the fact that insurers here recognize low-income people as an important market.
Regulators such as the Department of Finance, Insurance Commission, and the Bangko Sentral ng Pilipinas also play vital roles in the insurance market, he added.
“You also have people who are interested in trying to help how low-income people protect themselves and provide the products that they need. So the coordination of all these groups together has really provided a tremendous result here in the Philippines,” he said.
Nevertheless, McCord noted that insurers and government must work together to expand distribution channels to promote microinsurance to more people.
“Insurers have to be flexible. They have to work better on distribution. Expand the market with good products that help address poverty, particularly those that help address businesses,” he said.
McCord further said the government should continue to expand the potential of distributio channels, he added.
“Over the years, the government opened up insurance sales to mutual benefit associations. More recently, the government opened up to rural banks. So the broader the potential distributors, the easier for them to expand,” he concluded.