Phl leads East Asia in microinsurance

By Ted P. Torres
The Philippine Star
Updated November 25, 2014

MANILA, Philippines - Roughly 27.96 million Filipinos had microinsurance coverage in 2013, among the highest in the East Asian region, according to the Insurance Commission (IC).

Likewise, the penetration ratio (as a percentage of population) rose from 7.22 percent in 2009 to 28.62 percent last year.

The Philippines had the highest microinsurance penetration ratio and the second highest penetration, based on a 2013 study commissioned by the Munich Re Foundation.

The Philippines recorded a 20.6-percent penetration ratio or the highest among the top 10 nations covered by the study.

It was followed by the 13.9 percent in Thailand, nine percent for India, 6.1 percent for Bangladesh, and 3.7 percent for Malaysia. The rest of the countries based on ranking are Pakistan, Cambodia, East Timor, Jordan and Nepal.

In terms of penetration, India was tops with 111.1 million with microinsurance policies followed by the Philippines with 19.9 million policies.

China came in third with 11.9 million, Bangladesh with 9.4 million, and Thailand with 9.3 million. The rest of the field are: Pakistan, Indonesia, Malaysia, Nepal and Cambodia.

Before 2010, mutual benefit associations (MBAs), with a few exceptions among the larger life insurers, sold the low-cost informal insurance products.

But the government’s microinsurance program, with all its regulatory and actuarial improvements, changed all that.

At the start of 2013, there were 80 microinsurance products – 54 are classified as life products and 26 as non-life products – approved by the IC.

Offering microinsurance products are 19 insurance companies and 17 MBAs with approved microinsurance products.

In fact, 14 of the 17 MBAs are focused solely on IC-approved microinsurance products. About two million MBA members have microinsurance products.

Already, the program benefited more than 95,000 clients/beneficiaries, with payments reaching P1.87 billion in death and disability benefits.

IC commissioner Emmanuel F. Dooc said that the numbers are expected to be greater this year, with the increase in the number of participants coming the private sector.

Dooc said that the rapid entry of financial but non-insurance institutions, such Cebuana Lhuillier, in the microinsurance environment would dramatically increase the number of individual coverage.

‘They have one of the largest distribution networks today,” he added.

Philippines ranks 3rd in global EIU financial inclusion ranking

Business, Manila Bulleting
Lee C. Chipongian
November 13, 2014

The Philippines is one of the top three countries in the world that have the most effective financial inclusion programs, based on the “Global Microscope 2014” index of the Economist Intelligence Unit (EIU) which assessed the “enabling environment” of 55 countries.

It is an improvement from the 2013’s ranking which listed the country as fourth in the world.

“Peru, Colombia and the Philippines demonstrate the most conducive environments for financial inclusion,” the report said. The Philippines improved its score to 79 (out of 100) from last year’s 67.9, trailing behind to Peru’s 87 and Colombia’s 85.

EIU highlighted the Philippines’ leadership in the micro-insurance regulation and the government’s committed and documented financial-inclusion strategy or programs. “The Philippines government’s multi-year development plan includes a financial-inclusion strategy with specific commitments, many of which have been implemented, including financial-education initiatives,” said EIU.

The report also discussed the country’s challenges to ensure long-term success such as in implementation. “While the Philippines is at the forefront of promoting and creating an enabling environment for financial inclusion, some sector experts believe that delivery and implementation are weak.”

The fragmented economic sectors are a significant financial, security and logistical challenges, in a country of 7,000 islands. The EIU said the concentration of microfinance institutions (MFIs) in urban and semi-urban areas with larger populations leads to banks charging higher interest rates on loans. “Non-regulated financial institutions, namely, co-operatives, are not well supervised and engage in deceptive practices and charge high interest rates.”

There are also areas that MFIs are too few and scarce, specifically in Mindanao where EIU said coverage for microfinance is “negligible.” The report also pointed out the multiple financing problems or over-indebtedness, however they also acknowledged efforts to improve on this with the establishment of a credit data bureau or the Credit Information  Corp. which should be in place by the end of this year. The Credit Information System Act was legislated in 2008.

“Lastly, financial literacy continues to be a problem, as many Filipinos do not understand or value the importance of savings,” said EIU. The report cited a World Bank data that only 26.6 percent of the adult population has a deposit account.

The EIU said the Bangko Sentral ng Pilipinas’ (BSP) efforts to improve and promote financial literacy as part of its financial inclusion agenda have gained traction over the years.

It noted that the BSP was the first central bank in the world to have an “Inclusive Finance Advocacy Staff” for financial inclusion.

“The BSP continues to promote an enabling environment for financial inclusion through the issuance of various regulations and circulars, which seek to encourage new entrants of financial-services providers and products that serve the poor, while also ensuring the safe provision of such services,” said EIU.

In May this year, the central bank approved a stronger consumer protection framework which includes a separate system that will be implemented by 2016.

PHILIPPINE MICROHEALTH LOGO

Gov’t. body seeks public views on health insurance

Sunstar
November 21, 2014

THE government’s Technical Working Group (TWG) on MicroHealth yesterday conducted the first of its series of public consultations on the Health Microinsurance (HMI) Framework, which will cover all people, most especially the poorest among the poor.

Joselito S. Almario, deputy executive director of the Department of Finance-National Credit Council(DOF-NCC), said the proposed HMI framework is intended to encourage private sector support to the Universal Health Care (UHC) outlined in the Philippine Development Plan (PDP 2011-2016), which safeguards equitable access to health care for all Filipinos, particularly the poor.

Almario, the TWG chairman, said the PDP envisions a National Health Insurance Program (NHIP) that encourages public-private partnerships (PPP) to respond to the current gaps in healthcare risk protection in the country.

The joint press release distributed during the press conference that followed after the morning session stated that the private sector under the proposed Microhealth Framework is expected to complement and supplement Philhealth’s social health insurance packages especially for the low income and informal sectors.

Stats

Although 82 percent of the 100 million Filipinos have some form of health coverage, the gap remains wide for healthcare financial risk protection, particularly to the most vulnerable low-income sectors.

Philhealth Chief Social Insurance Officer Maria Cristina C. Ramos said Philhealth provides basic health care packages, but has not covered medical transport, drugs and medical supplies.

Ramos said that with microinsurance, they hope all Filipinos, rich and poor, will be covered.

Almario said microinsurance offers a maximum benefit of P500,000 for a maximum coverage of P40.

The consultations aim to draw together views, concerns and support of public and private providers and practitioners in health and insurance sectors on the draft framework.

The TWG on MicroHealth is composed of IC, DOF-NCC, Philhealth, Department of Health (DOH), the insurance industry and the Association of Health Maintenance Organization in the Philippines (AHMOPI), with the support from German Development Cooperation (GIZ).

Support

The GIZ, through its regional program on microinsurance, the Regulatory Framework Promotion on Pro-poor Insurance Markets in Asia (GIZ-RFPI), is providing technical and financial support.

Almario said microinsurance responds to the financial risk protection needs of the low-income and informal sectors. While the products have affordable premiums, the benefits that correspond to the risks and claims settlement is fast.

Ferrer said the MicroHealth framework is envisioned to augment the UHC program through a viable and sustainable private sector microinsurance industry.

Ferrer said Microhealth is expected to provide every Filipino greater coverage and wider access to simple, affordable, appropriate and effective health microinsurance products and services.

Source: Sunstar