The movement for microinsurance

(The Philippine Star) Updated June 13, 2011 12:00 AM Comments (0)

MANILA, Philippines - As microinsurance gains more ground in mainstream banking and finance circles, more and more organizations have now taken strides to provide products that are affordable and accessible to members who need it the most. Pioneer Life, recently the first to be granted approval by the Insurance Commission for their microinsurance programs has found partners in organizations such as NGOs, microfinance associations, banks, cooperatives and direct selling companies for various tailor-fitted needs. Whether it’s accident, life or property coverage — safety and protection is now well within their reach.

“We have always strived to produce savings and insurance products that are affordable and easy to acquire. This is in line with our vision to become a model Filipino enterprise,” shares President and CEO of Pioneer Life Lorenzo Chan, Jr. “In order to do that, we have to go beyond serving the standard A-B and corporate markets. For us, microinsurance is a natural progression to bring a useful product to people who need it most.”

One of the biggest microfinance institutions in the country, GM Bank sealed its partnership with Pioneer Group for the provision of Property Insurance Coverage, including fire, flood, and earthquake assistance, as well as Personal Accident Insurance to its many associates and members. GM Bank, Inc. is composed of two of Nueva Ecija’s most respected rural banks; Munoz Rural Bank, Inc. and Community Rural Bank, Inc. The Protektahan program was specifically designed for the needs of not just GM Bank associates but their clients and members as well.

A direct selling marketing company has gained ground for various products that promote personal health and wellness – the 7-in-1 Vera Coffee, and V7 Grape Seed Oil Extract. It’s only fitting that the officers, staff and members of Vera7 be protected for their financial wellness too. This is the partnership agreement signed between Vera7 and Pioneer where a special savings and wellness program was developed for the coverage of Personal Accident with Accidental Death and Disablement Benefit (ADDB).

Providing insurance coverage for eligible bank borrowers under a Group Credit Life Insurance Policy, Cantilan Bank is another big name in the field of rural banks that have decided to give their trust to Pioneer. The specialization of the bank includes banking and countryside development services in the northern and southern part of Mindanao.

World Kitchen Workers Service Cooperative, made up of some 80 kitchen workers and individuals part of the food service industry and other restaurants, has signed up for protection with Pioneer. Eligible borrowers of the cooperative will automatically be covered under a Group Credit Life Insurance Policy as well as Tr3asure Principle Accumulator Program, another Business Development initiative that implements a savings component, too.

Through these various partnerships, Pioneer Life aims to strengthen its foray into microinsurance and take a step closer in the end goal that is transforming every Filipino into a saver. In partnership with NGOs and institutions offering microfinance, Pioneer’s offerings of microinsurance programs meet the peculiar needs of this market and tailorfit to the requirements of a group. This early, the claims made by beneficiaries have helped keep kids in school and widows get back on their feet. “Microinsurance is an opportunity for us to reach out to more people regardless of where they are or what they do,” says Pioneer Life VP for Microinsurance Geric Laude. “We develop our programs only after we truly understand what their needs are.”

Philippines: Life market to spurt ahead this year

Philippines: Life market to spurt ahead this year
The Philippine life insurance sector expects to grow significantly this year, citing positive economic indicators suggesting an increase in demand for insurance products.

Mr Mayo Jose Ongsingco, President of the Philippine Life Insurance Association (PLIA), says: "In 2010, our first-year premiums grew by 59%, while total premiums grew by 23%. We expect that the growth this year will be close to that." PLIA data show that the industry's total premium income increased by 23.5% to PHP70.7 billion (US$1.7 billion) while first-year premiums rose by 59.4% to PHP34.28 billion last year.

"The economic fundamentals of the country are very strong. Inflation is in check, the fiscal deficit is under control. Despite all the troubles in the Middle East and North Africa, remittances are also strong," he points out. With favourable economic conditions, people have more personal disposable income to purchase insurance, he says.

The debt crises in the United States and Europe have also boosted the Philippine insurance industry by pushing capital to emerging markets. These have buoyed bond and equity markets, increasing insurers' yields on investments. However, Mr Ongsingco also warns that a US default would send ripples to markets across the globe, similar to the global financial crisis in 2008.

Currently, the penetration rate of insurance is still small in the Philippines, Mr Ongsingco says. At present, insurance premiums collected by the industry are equivalent to just 0.75% of the country's gross domestic product. He says that the ratio could substantially increase through the promotion of micro insurance.