Manila Times
Saturday, January 28, 2012 00:00
by : KATRINA MENNEN A. VALDEZ
The country’s microinsurance industry is seen to grow by more than half this year because of the increasing awareness among low-income Filipinos after a series of calamities last year.
Insurance Commission (IC) Commissioner Emmanuel Dooc said that as of December last year, there were about 3.1 million microinsurance policies sold.
Such number are comprised of families, associations, individuals and group policies to cover them and their respective members from contingent events such as death, sickness, accident and environmental calamities.
“With the sheer number of low income populace in the country, the market is definitely huge and that translates to potential profits,” Dooc said.
At present, the Philippines lags behind its regional peers in terms of insurance penetration, which hovers at below 14 percent of the total population.
The country has about eight microinsurance providers from the non-life industry, seven from life and 15 from the mutual benefit association sector.
Under a micro insurance policy, an individual could cover a contingent event such as death for only P1 a day or up to P20 a day, with claims ranging from P500 up to P200,000.
Department of Finance Director Joselito Almario said that the industry starting this year is expecting to sell 5 million more policies or 60 percent more than it has sold from the previous year.
”There is indeed an increasing awareness among low-income Filipinos regarding the need for them to avail of insurance policy. We are seeing that we could make more people buy insurance products and generate an additional 5 million policies this year,” he said.
”The series of calamities made a lot of impact with regard to ordinary people’s awareness of the necessity to have themselves and their properties covered by insurance. Sales of microinsurance policies shot up since last year,” Almario added.
He said that it is only this year that microinsurance companies were required to report every month to the IC the necessary figures that would enable the government to monitor the penetration rate and equivalent value of micro-insurance products they sold.
Almario added said that to further attract low-income earners to avail of insurance, the government in partnership with the private sector will simplify the terms and conditions on the policies, and would hasten the process of approval of claims to not more than 10 days
Monday, January 30, 2012
Saturday, January 28, 2012
REGULATOR TO RECOGNIZE MICROINSURANCE PROVIDERS
To culminate this year’s Microinsurance month celebration, the Insurance Commission (IC) will give due recognition to life and non-life insurance entities actively engaged in the delivery of microinsurance products and services. Microinsurance, as defined by the IC, are insurance products that are affordable, simple and accessible to low-income and informal sectors of society.
Dubbed as the “Gabi ng Parangal at Pasasalamat sa mga Tagapagtaguyod ng Microinsurance”, the awarding ceremony shall be held at the Philippine International Convention Center on 31 January 2012. The month of January of every year was declared as “National Microinsurance Month” through Proclamation No. 1212 issued in 2006.
According to Insurance Commissioner Emmanuel Dooc, this year’s event will highlight “Government’s steadfast commitment, in partnership with the private sector, to uplift the conditions of our poor countrymen by providing them access to simple and low-cost protection against risks and unexpected events.” Microinsurance has been identified as one of the financial inclusion priorities of Government in its 2011-2016 Medium-Term Philippine Development Plan.
To be honored are government’s partners in the promotion and advocacy of microinsurance. These entities are insurance associations, life and non-life insurance commercial companies, mutual benefit associations and cooperative insurance entities licensed by the IC. As part of the criteria, these entities have supported microinsurance through the development of small insurance products approved by the IC and have actually sold these products to the low-income market as of 15 December 2011.
Prior to this year’s culminating event, the IC and the Department of Finance-National Credit Council (DOF-NCC) conducted a Training on Microinsurance Advocacy (TOMA) for various stakeholders on 18-20 January 2012. Participants came from both national agencies and local governments, insurance providers, microfinance institutions, support institutions, donor agencies and non-government organizations. The training is geared towards creating a core mass of advocates in the government and private sectors in increasing awareness of the general public on the importance of insurance for risk protection. Currently, the Philippines lags behind its neighbors in terms of insurance penetration which hovers at below 14 percent of total population.
On 27 January 2012, a public seminar and a press conference was conducted at the Diamond Hotel. The seminar, together with the “Gabi ng Parangal” awards ceremony, is part of the nationwide roadshow “Financial Literacy on Microinsurance” campaign spearheaded by the DOF-NCC and the IC. The financial education drive aims to cascade the knowledge and importance of microinsurance among all sectors of the economy in 16 regions all over the country. So far, two roadshows have been conducted in Tacloban City, Leyte and Butuan City, Agusan del Norte in the last part of 2011.
The government’s microinsurance initiative is provided technical assistance support from various multilateral agencies such as the Japan Fund for Poverty Reduction-Asian Development Bank (JFPR-ADB) and the German Technical Cooperation (GIZ) for its potential to help alleviate poverty in the Philippines. Designed for the low-income group, microinsurance products are priced affordably and require simple documentation for easy access by its target market.
Dubbed as the “Gabi ng Parangal at Pasasalamat sa mga Tagapagtaguyod ng Microinsurance”, the awarding ceremony shall be held at the Philippine International Convention Center on 31 January 2012. The month of January of every year was declared as “National Microinsurance Month” through Proclamation No. 1212 issued in 2006.
According to Insurance Commissioner Emmanuel Dooc, this year’s event will highlight “Government’s steadfast commitment, in partnership with the private sector, to uplift the conditions of our poor countrymen by providing them access to simple and low-cost protection against risks and unexpected events.” Microinsurance has been identified as one of the financial inclusion priorities of Government in its 2011-2016 Medium-Term Philippine Development Plan.
To be honored are government’s partners in the promotion and advocacy of microinsurance. These entities are insurance associations, life and non-life insurance commercial companies, mutual benefit associations and cooperative insurance entities licensed by the IC. As part of the criteria, these entities have supported microinsurance through the development of small insurance products approved by the IC and have actually sold these products to the low-income market as of 15 December 2011.
Prior to this year’s culminating event, the IC and the Department of Finance-National Credit Council (DOF-NCC) conducted a Training on Microinsurance Advocacy (TOMA) for various stakeholders on 18-20 January 2012. Participants came from both national agencies and local governments, insurance providers, microfinance institutions, support institutions, donor agencies and non-government organizations. The training is geared towards creating a core mass of advocates in the government and private sectors in increasing awareness of the general public on the importance of insurance for risk protection. Currently, the Philippines lags behind its neighbors in terms of insurance penetration which hovers at below 14 percent of total population.
On 27 January 2012, a public seminar and a press conference was conducted at the Diamond Hotel. The seminar, together with the “Gabi ng Parangal” awards ceremony, is part of the nationwide roadshow “Financial Literacy on Microinsurance” campaign spearheaded by the DOF-NCC and the IC. The financial education drive aims to cascade the knowledge and importance of microinsurance among all sectors of the economy in 16 regions all over the country. So far, two roadshows have been conducted in Tacloban City, Leyte and Butuan City, Agusan del Norte in the last part of 2011.
The government’s microinsurance initiative is provided technical assistance support from various multilateral agencies such as the Japan Fund for Poverty Reduction-Asian Development Bank (JFPR-ADB) and the German Technical Cooperation (GIZ) for its potential to help alleviate poverty in the Philippines. Designed for the low-income group, microinsurance products are priced affordably and require simple documentation for easy access by its target market.
Microinsurance sales surge as poor see need for protection
Business World
Finance
Posted on January 27, 2012 08:11:34 PM
A TOTAL of 3.5 million microinsurance policies were sold last year after the government and the private sector began promoting the financial protection products for the poor.
"From January up to December 15, 2011, about 3.5 million policies were sold," said National Credit Council Deputy Executive Director Joselito S. Almario during a roundtable discussion with the media on Friday.
"And this number did not even indicate how many people were covered, since some policies were group insurance policies. They could be covering 100 or 200 people," he added.
No comparable data for 2010 is available.
Mr. Almario said the figure could easily rise to 5 million by the end of this year, as the Insurance Commission (IC) and the German Agency for International Cooperation (GIZ) continue their financial literacy campaign until August. The campaign was launched in February 2011.
"That target is attainable," he added, especially since insurers will be required to report progress on their microinsurance efforts to the IC this year.
Microinsurance is one of the key priorities of the IC and the Aquino administration. Insurance Memorandum Circular 1-2010, released in January 2010, set the guidelines for the nascent microinsurance industry. The amount of premiums, computed on a daily basis, should not exceed 5% of the current daily minimum wage rate of non-agricultural workers in Metro Manila. Also, the coverage of microinsurance policies should not be more than 500 times the daily minimum wage rate for non-agricultural workers in Metro Manila.
There are currently eight microinsurance providers from the nonlife industry, seven from the life industry and 15 from mutual benefit associations, Insurance Commissioner Emmanuel F. Dooc said.
"We have diverse microinsurance products. For life we have, among others, the usual basic life and credit life insurance, disability benefits, medical expenses reimbursement and micro-investment products," he pointed out.
Nonlife insurers offer variants of the prototype "Buhay, Bahay, Kabuhayan" designed by GIZ and approved by IC. The product is designed to give a P10,000 coverage against death from accident or damage to property/business from natural calamities. One may buy three units for a total coverage of P30,000. A contract is good for a year.
Despite the progress, Mr. Dooc expressed hope other insurance companies will also offer insurance products for the poor.
In response, George C. Mina, the general manager of the industry group Philippine Life Insurance Association, Inc., said during the roundtable that a number of life insurers are keen to offer microinsurance.
"Nine companies have already gotten approval to offer microinsurance this year. Five are waiting for approval and six are interested," Mr. Mina said.
Finance
Posted on January 27, 2012 08:11:34 PM
A TOTAL of 3.5 million microinsurance policies were sold last year after the government and the private sector began promoting the financial protection products for the poor.
"From January up to December 15, 2011, about 3.5 million policies were sold," said National Credit Council Deputy Executive Director Joselito S. Almario during a roundtable discussion with the media on Friday.
"And this number did not even indicate how many people were covered, since some policies were group insurance policies. They could be covering 100 or 200 people," he added.
No comparable data for 2010 is available.
Mr. Almario said the figure could easily rise to 5 million by the end of this year, as the Insurance Commission (IC) and the German Agency for International Cooperation (GIZ) continue their financial literacy campaign until August. The campaign was launched in February 2011.
"That target is attainable," he added, especially since insurers will be required to report progress on their microinsurance efforts to the IC this year.
Microinsurance is one of the key priorities of the IC and the Aquino administration. Insurance Memorandum Circular 1-2010, released in January 2010, set the guidelines for the nascent microinsurance industry. The amount of premiums, computed on a daily basis, should not exceed 5% of the current daily minimum wage rate of non-agricultural workers in Metro Manila. Also, the coverage of microinsurance policies should not be more than 500 times the daily minimum wage rate for non-agricultural workers in Metro Manila.
There are currently eight microinsurance providers from the nonlife industry, seven from the life industry and 15 from mutual benefit associations, Insurance Commissioner Emmanuel F. Dooc said.
"We have diverse microinsurance products. For life we have, among others, the usual basic life and credit life insurance, disability benefits, medical expenses reimbursement and micro-investment products," he pointed out.
Nonlife insurers offer variants of the prototype "Buhay, Bahay, Kabuhayan" designed by GIZ and approved by IC. The product is designed to give a P10,000 coverage against death from accident or damage to property/business from natural calamities. One may buy three units for a total coverage of P30,000. A contract is good for a year.
Despite the progress, Mr. Dooc expressed hope other insurance companies will also offer insurance products for the poor.
In response, George C. Mina, the general manager of the industry group Philippine Life Insurance Association, Inc., said during the roundtable that a number of life insurers are keen to offer microinsurance.
"Nine companies have already gotten approval to offer microinsurance this year. Five are waiting for approval and six are interested," Mr. Mina said.
Tuesday, January 24, 2012
Life insurance to sustain double-digit growth
Malaya Business Insight
Tuesday, January 24, 2012
BY ANGELA LORRAINE CELIS
The life insurance industry is expected to sustain last year’s double-digit growth this year, an industry official said.
"Barring any external catastrophic events such as a euro zone meltdown with its contagion effects on the US and Asia, we are optimistic regarding the continuing growth of the life insurance industry in 2012," Mayo Jose Ongsingco, Philippine Life Insurance Association (PLIA) immediate past president, said.
"We are projecting to sustain the 2011 growth in 2012," Ongsingco, who is also Insular Life president and chief operating officer, said.
Ongsingco said that total premiums could have grown to around 20 percent in 2011 compared with the previous year.
"This will be driven by an estimated growth in new business premiums of around 40 percent year on year," Ongsingco said.
The official 2011 figures are yet to be disclosed.
Ongsingco said that some of the factors that would influence the industry’s growth this year would include the same macroeconomic drivers last year. In 2011, the services sector was the main driver of growth.
He added that the Public-Private Partnership program’s "trickle-down effects," benign inflation, and a possible credit upgrade for the Philippines later this year will also positively affect the industry’s growth.
"Micro insurance, the expansion of the mandatory migrant workers insurance and the implementation of the PERA (Personal Equity and Retirement Account) initiative will add to the growth of the life industry," Ongsingco said.
"Other external events that should be watched would be the resolution of the US debt ceiling issue, the pending bill in the US congress that would curtail BPO outsourcing, and tensions in the Middle East that could disrupt oil supplies and increase prices," he said.
"Clearly, for the Philippine life insurance industry, the growth in new premiums will be mostly attributed to investment-linked product sales and will be exemplified by bank-generated production," Ongsingco said.
Ongsingco also said that one of the drivers of industry growth last year was overall economic growth.
"There is a positive correlation between GDP (gross domestic product) growth and life insurance premium growth. Despite the lingering euro zone and the US debt ceiling crisis, the Philippine GDP is expected to still grow by around 4.7 percent in 2011 although lower than 2010’s 7.6 percent GDP growth," Ongsingco said.
The Philippines’ GDP growth rate for 2011 is yet to be announced by the National Statistical Coordination Board.
The latest data from the NSCB shows, however, that the Philippine economy grew 3.6 percent in the first three quarters of the previous year.
This is less than half the 8.2 percent growth in the first nine months of 2010 and also below the government’s 4.5 to 5.5 percent growth outlook for 2011.
This year, the government expects the Philippine economy to grow 5 to 6 percent.
"The system was also very liquid with P1.6 trillion in SDAs (special deposit accounts). Some of this excess liquidity was channeled to investment-linked life insurance products," he said.
Ongsingco said that other notable drivers last year were overseas Filipino workers’ remittances, the growing BPO industry, and low inflation.
Earlier, Bangko Sentral governor Amando Tetangco said that remittances of OFWs for January to October 2011 reached $16.5 billion, a year-on-year growth of 7 percent.
Tetangco expects full-year remittances in 2011 to amount to $20.1 billion.
"For 2012, the forecast is $21.1 (billion), there will be a 5 percent growth," Tetangco said.
Inflation in 2011 was 4.8 percent, which is within the government’s 3 percent to 5 percent target.
In 2010, total life insurance premiums grew 23.56 percent to P70.727 billion. The first-year premiums, meanwhile, grew 59.38 percent to P34.28 billion.
The top five insurance companies in 2010 in terms of premium income performance were Philam Life, P11.255 billion, 16 percent of total; Sun Life, P10.63 billion, 15 percent; Philippine AXA Life, P8.36 billion, 11.8 percent; Pru Life UK, P7.36 billion, 10.4 percent; and Insular Life, P7.13 billion, 10.1 percent.
In terms of first-year premiums, the top five were Philippine AXA, P6.64 billion, 19.4 percent of total; Pru Life UK, P5.23 billion, 15.3 percent; BPI-Philam, P4.56 billion, 13.3 percent; Insular Life, P3.27 billion, 9.5 percent; and Philam Life, P2.7 billion, 7.8 percent.
The industry’s penetration rate in 2010 was only 13 percent, but Ongsingco expects this to increase as more policies are sold.
Of this rate, 10 percentage points is covered by group life insurance, while only 3 percentage points is covered by individual life insurance.
"Micro insurance, compulsory migrant workers insurance and the sale of life insurance policies as a PERA-qualified product will definitely increase the penetration rate," he said.
Ongsingco noted that micro insurance in particular will definitely improve the penetration rate as more persons will be covered by life insurance.
Micro insurance is defined by the Insurance Commission as an activity providing specific insurance, insurance-like and other similar products and services that meet the needs of the low-income sector for risk protection and relief against distress, misfortune and other contingent events.
With most of the banks and other financial institutions centered in key areas, the Philippines is a prime spot for micro insurance and microfinance.
"The natural target markets of micro insurance are the lower-income and small individual entrepreneurs who are normally unable to access regular life insurance," Ongsingco said.
Ongsingco said that there are some life insurance companies already selling or considering micro insurance products, although the number of companies was not disclosed.
"There are however some issues to be threshed out such as in underwriting, selling and eventually, claims evaluation/settlement," he said.
"Micro insurance has been launched successfully in South America and we are studying the use of similar models for the Philippines. Moreover, BSP has allowed thrift, cooperative, and rural banks as distribution channels for micro insurance," he said.
The BSP, aiming to increase public access to needed financial services, approved in 2010 the marketing, sale and servicing of micro insurance products by rural, cooperative and thrift banks as well as other financial institutions.
Tuesday, January 24, 2012
BY ANGELA LORRAINE CELIS
The life insurance industry is expected to sustain last year’s double-digit growth this year, an industry official said.
"Barring any external catastrophic events such as a euro zone meltdown with its contagion effects on the US and Asia, we are optimistic regarding the continuing growth of the life insurance industry in 2012," Mayo Jose Ongsingco, Philippine Life Insurance Association (PLIA) immediate past president, said.
"We are projecting to sustain the 2011 growth in 2012," Ongsingco, who is also Insular Life president and chief operating officer, said.
Ongsingco said that total premiums could have grown to around 20 percent in 2011 compared with the previous year.
"This will be driven by an estimated growth in new business premiums of around 40 percent year on year," Ongsingco said.
The official 2011 figures are yet to be disclosed.
Ongsingco said that some of the factors that would influence the industry’s growth this year would include the same macroeconomic drivers last year. In 2011, the services sector was the main driver of growth.
He added that the Public-Private Partnership program’s "trickle-down effects," benign inflation, and a possible credit upgrade for the Philippines later this year will also positively affect the industry’s growth.
"Micro insurance, the expansion of the mandatory migrant workers insurance and the implementation of the PERA (Personal Equity and Retirement Account) initiative will add to the growth of the life industry," Ongsingco said.
"Other external events that should be watched would be the resolution of the US debt ceiling issue, the pending bill in the US congress that would curtail BPO outsourcing, and tensions in the Middle East that could disrupt oil supplies and increase prices," he said.
"Clearly, for the Philippine life insurance industry, the growth in new premiums will be mostly attributed to investment-linked product sales and will be exemplified by bank-generated production," Ongsingco said.
Ongsingco also said that one of the drivers of industry growth last year was overall economic growth.
"There is a positive correlation between GDP (gross domestic product) growth and life insurance premium growth. Despite the lingering euro zone and the US debt ceiling crisis, the Philippine GDP is expected to still grow by around 4.7 percent in 2011 although lower than 2010’s 7.6 percent GDP growth," Ongsingco said.
The Philippines’ GDP growth rate for 2011 is yet to be announced by the National Statistical Coordination Board.
The latest data from the NSCB shows, however, that the Philippine economy grew 3.6 percent in the first three quarters of the previous year.
This is less than half the 8.2 percent growth in the first nine months of 2010 and also below the government’s 4.5 to 5.5 percent growth outlook for 2011.
This year, the government expects the Philippine economy to grow 5 to 6 percent.
"The system was also very liquid with P1.6 trillion in SDAs (special deposit accounts). Some of this excess liquidity was channeled to investment-linked life insurance products," he said.
Ongsingco said that other notable drivers last year were overseas Filipino workers’ remittances, the growing BPO industry, and low inflation.
Earlier, Bangko Sentral governor Amando Tetangco said that remittances of OFWs for January to October 2011 reached $16.5 billion, a year-on-year growth of 7 percent.
Tetangco expects full-year remittances in 2011 to amount to $20.1 billion.
"For 2012, the forecast is $21.1 (billion), there will be a 5 percent growth," Tetangco said.
Inflation in 2011 was 4.8 percent, which is within the government’s 3 percent to 5 percent target.
In 2010, total life insurance premiums grew 23.56 percent to P70.727 billion. The first-year premiums, meanwhile, grew 59.38 percent to P34.28 billion.
The top five insurance companies in 2010 in terms of premium income performance were Philam Life, P11.255 billion, 16 percent of total; Sun Life, P10.63 billion, 15 percent; Philippine AXA Life, P8.36 billion, 11.8 percent; Pru Life UK, P7.36 billion, 10.4 percent; and Insular Life, P7.13 billion, 10.1 percent.
In terms of first-year premiums, the top five were Philippine AXA, P6.64 billion, 19.4 percent of total; Pru Life UK, P5.23 billion, 15.3 percent; BPI-Philam, P4.56 billion, 13.3 percent; Insular Life, P3.27 billion, 9.5 percent; and Philam Life, P2.7 billion, 7.8 percent.
The industry’s penetration rate in 2010 was only 13 percent, but Ongsingco expects this to increase as more policies are sold.
Of this rate, 10 percentage points is covered by group life insurance, while only 3 percentage points is covered by individual life insurance.
"Micro insurance, compulsory migrant workers insurance and the sale of life insurance policies as a PERA-qualified product will definitely increase the penetration rate," he said.
Ongsingco noted that micro insurance in particular will definitely improve the penetration rate as more persons will be covered by life insurance.
Micro insurance is defined by the Insurance Commission as an activity providing specific insurance, insurance-like and other similar products and services that meet the needs of the low-income sector for risk protection and relief against distress, misfortune and other contingent events.
With most of the banks and other financial institutions centered in key areas, the Philippines is a prime spot for micro insurance and microfinance.
"The natural target markets of micro insurance are the lower-income and small individual entrepreneurs who are normally unable to access regular life insurance," Ongsingco said.
Ongsingco said that there are some life insurance companies already selling or considering micro insurance products, although the number of companies was not disclosed.
"There are however some issues to be threshed out such as in underwriting, selling and eventually, claims evaluation/settlement," he said.
"Micro insurance has been launched successfully in South America and we are studying the use of similar models for the Philippines. Moreover, BSP has allowed thrift, cooperative, and rural banks as distribution channels for micro insurance," he said.
The BSP, aiming to increase public access to needed financial services, approved in 2010 the marketing, sale and servicing of micro insurance products by rural, cooperative and thrift banks as well as other financial institutions.
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