Five years since the launch of the National Strategy for Microinsurance in 2010, the microinsurance industry in the country has grown to be one of the most mature in terms of regulation.
According to The Landscape of Microinsurance in Asia and Oceania 2013 study, Asia is the most successful in terms of penetration rate with India, Thailand and Philippines included in the top 10 countries with highest coverage ratios.
This growth trajectory is likely to continue as the industry is poised to develop more products, expand delivery channels and cover more segments of the population that are vulnerable to financial downfall when death, illness or calamity occur.
Two potential areas for product development are health and agriculture. There has always been an expressed demand for more affordable health insurance products in the market that are suitable to the needs of the low-income sector and which shall complement the government-supported PhilHealth program.
For the health insurance providers, it would mean an expansion of their traditional market while for the informal, low-income sector, this would spell better access to healthcare facilities and services.
The agriculture sector remains to be the most vulnerable when natural calamities strike.
The El Niño phenomenon and the devastation brought by typhoons have been affecting agricultural productivity and their effects are immediately felt by farmers, fisherfolk and other players in the sector.
Exposure to risks brought by these events would have been mitigated by insurance. The sector would benefit from the development of agricultural insurance products that would address specific risks and designed to be more affordable for the farmers.
Non-traditional channels like rural banks, pawnshops, non-government organizations and microfinance institutions are conduits that broaden the public’s access to microinsurance.
Rural banks alone, with its more than 2,000 offices and branches nationwide, can efficiently service a potentially large number of the population. A rural bank’s microinsurance program is not limited to its loan clients alone. Micro-depositors and other existing low-income clients can avail of a rural bank’s microinsurance product.
There are now 49 rural banks with strategic presence in Luzon, Visayas and Mindanao.
They are approved to market and sell microinsurance to their clients and the number continues to increase, albeit gradually, as a number of these banks are still in the process of getting approval from the regulators.
As growth in the sector continues, with more products developed and more players engaged in delivering the service, access to protection is guaranteed and made available for every Juan.