By Iris C. Gonzales (The Philippine Star) Updated October 30, 2010 12:00 AM Comments (0)
MANILA, Philippines - The Philippines placed second in a study conducted by the Economic Intelligence Unit dubbed as Global Microscope on microfinance business environment.
The study was conducted among 54 developing countries. Among the different developing countries, Peru retained its position as the global leader on microfinance bureau’s environment.
According to the study, for the second year now, the Philippines and Bolivia top the Economic Intelligence Unit’s Global Microscope index. “The Philippines and Bolivia swapped positions and finished second and third, respectively, this year. Two newcomers, Pakistan and Kenya, joined the top 10, displacing Nicaragua and Uganda,” the study noted.
The three best-performing countries score especially well in two of the main index categories: regulatory framework and institutional development.
“The Philippines enjoys the best overall regulatory environment for microfinance, alongside Cambodia, which does not make the top 10 overall, and Pakistan which does,” it said.
The study noted key changes in the country’s microfinance environment. It noted that microfinance institutions in the Philippines or MFIs are able to offer a variety of services, and many do.
“Regulated MFIs can accept deposits, and those linked to the international payments system can accept remittances,” it said.
In terms of choices, clients in the Philippines have a wide choice of service providers, including local and national institutions.
Furthermore, the study noted that in 2010, the Bangko Sentral ng Pilipinas (BSP) began allowing rural, co-operative, and thrift banks to sell authorized micro-insurance products.
These institutions can be licensed as micro-insurance agents, and can only sell policies up to P190,000 or $4,000 under certain provisions, it noted.
The study also took note of the fact that in April 2010 the BSP issued a circular that set the rules for accrediting microfinance rating agencies, a move seen as encouraging local MFIs to be rated.
“Until recently, it was rare for microfinance banks (MFBs), rural banks, or thrift banks with microfinance operations to become externally rated,” the study said.
In 2010, BSP issued rules on the extension of housing microfinance and eased requirements for micro-lending in agriculture which the study said also contributed to the improvement in the microfinance environment.
At the same time, the study underscored the need to put in place a credit information system.
“The Credit Information System Act signed into law in September 2008 requires all regulated entities to submit positive and negative information to a new credit bureau under the Securities and Exchange Commission (SEC). However, the establishment of the Central Credit Information Corporation (CCIC) has not yet resulted in the operation of a functioning, active credit bureau, despite the fact that implementing rules and regulations (IRR) were approved in May 2009. According to local press, operations are now expected to begin in the third quarter of 2010,” it said
Sunday, October 31, 2010
Thursday, October 28, 2010
6th International Microinsurance Conference - Manila, the Philippines
Munich/Luxembourg – With the growing recognition that providing insurance services for the low-income populations plays a significant role in the achieving the United Nation’s Millennium Development Goals (MGDs), the 6th International Microinsurance Conference will take place this year in Manila, the Philippines. The conference, which will run between 9 – 11 November 2010, will host around 500 participants to discuss the solutions and challenges microinsurance faces in helping to achieve these goals.
The conference, which is organised by the Munich Re Foundation and the Microinsurance Network with support from GTZ/BMZ, the Department of Finance in the Philippines and Georgia State University’s Center for the Economic Analysis of Risk, will bring together representatives from across the microinsurance sector including insurance and reinsurance companies, international organisations, NGOs, development-aid agencies, academics, policymakers, regulators and supervisors.
Secretary of Finance Cesar V. Purisima, is expected to attend the opening of the conference confirming that microinsurance is of great importance to the government of the Philippines. The Secretary affirmed that, “through a strong public-private sector collaboration, microinsurance will be in the forefront of the Philippine Government’s efforts to provide our low-income sector and the poor protection from risks, providing them the means to rebuild their lives when unfortunate and unforeseen events occur.”
The agenda for the conference was put together following a call for proposals in March 2010 by a panel of renown experts and representatives from all corners of the microinsurance world. The focus will be on independent case studies and academic research on innovative and sustainable microinsurance programmes and/or products, focusing on key issues and challenges. These include new distribution channels, claims handling mechanisms, strategies for enabling the environment to develop microinsurance, solutions for natural disasters and finally insurance literacy.
Of the many challenges the sector faces, insurance literacy is currently recognised as one of the most important hurdles to overcome. Educating the clients on the benefits of insurance is an indispensible ingredient to the success of any microinsurance programme and with the publication of a number of recent case studies, most notably a landscape study by the Insurance Education Working Group of the Microinsurance Network; good practices are emerging slowly, some of which will be presented during the conference.
The 6th International Microinsurance Conference, the longest running and most attended microinsurance conference there is, offers an indispensible added value to all those that attend and to the sector as a whole. From the first conference in Munich in 2005 through to the fifth one in Dakar (2009), which was the largest microinsurance conference ever with an attendance of over 450 representatives from 63 countries, the International Microinsurance Conference continues to provide a unique opportunity for attendees to move the sector forward though collaboration and communication.
The 6th International Microinsurance Conference in Manila, as Dirk Reinhard, Munich Re Foundation and Chairman of the Conference Steering Committee, points out “has taken on even more importance with the G20’s Financial Inclusion Experts Group (FIEG) identifying insurance as one of the fundamental financial services that requires extending in their nine Principles for Innovative Financial Inclusion”.
Over the last few years, microinsurance in the Philippines has been on the increase compared to the rest of world. But with a population of around 92 million and only 13.92 % have life insurance, penetration is still very low. Efforts are ongoing to change this though. The Department of Finance and the Insurance Commission recenltly formulated the National Strategy and Regulatory Framework for Microinsurance. Among others, it promotes greater access by the poor to small, affordable microinsurance products and requires the formalisation of all informal schemes of microinsurance provision by 2012 to ensure that clients are adequately protected. The Philippine Insurers and Reinsurers Association recently pledged to inform some 27 million Filipinos on the merits of securing insurance policies in support of the Government’s financial literacy campaign.
About the International Microinsurance Conference
Initiated and organised by the Munich Re Foundation in collaboration with the Microinsurance Network, the aim of the conference is to be the international platform where experts share information, knowledge and experience in microinsurance in order to overcome existing challenges.
About Munich Re Foundation
The Munich Re Foundation seeks to provide answers to overarching questions from a variety of perspectives in order to find sustainable solutions in the area of risk prevention. Questions concerning development are linked to risk management and poverty reduction.
For more information:
• Contact Dirk Reinhard/Martina Mayerhofer (info@munichre-foundation.org)
• Visit www.munichre-foundation.org
About the Microinsurance Network
The Microinsurance Network is a network of organisations involved in microinsurance. Its mission is to promote the development and proliferation of good-value insurance products for people on low-income by providing a platform for information sharing and stakeholder coordination.
For more information:
• Contact Matthew Genazzini (matthew.ada@microfinance.lu)
Visit www.microinsurancenetwork.org
The conference, which is organised by the Munich Re Foundation and the Microinsurance Network with support from GTZ/BMZ, the Department of Finance in the Philippines and Georgia State University’s Center for the Economic Analysis of Risk, will bring together representatives from across the microinsurance sector including insurance and reinsurance companies, international organisations, NGOs, development-aid agencies, academics, policymakers, regulators and supervisors.
Secretary of Finance Cesar V. Purisima, is expected to attend the opening of the conference confirming that microinsurance is of great importance to the government of the Philippines. The Secretary affirmed that, “through a strong public-private sector collaboration, microinsurance will be in the forefront of the Philippine Government’s efforts to provide our low-income sector and the poor protection from risks, providing them the means to rebuild their lives when unfortunate and unforeseen events occur.”
The agenda for the conference was put together following a call for proposals in March 2010 by a panel of renown experts and representatives from all corners of the microinsurance world. The focus will be on independent case studies and academic research on innovative and sustainable microinsurance programmes and/or products, focusing on key issues and challenges. These include new distribution channels, claims handling mechanisms, strategies for enabling the environment to develop microinsurance, solutions for natural disasters and finally insurance literacy.
Of the many challenges the sector faces, insurance literacy is currently recognised as one of the most important hurdles to overcome. Educating the clients on the benefits of insurance is an indispensible ingredient to the success of any microinsurance programme and with the publication of a number of recent case studies, most notably a landscape study by the Insurance Education Working Group of the Microinsurance Network; good practices are emerging slowly, some of which will be presented during the conference.
The 6th International Microinsurance Conference, the longest running and most attended microinsurance conference there is, offers an indispensible added value to all those that attend and to the sector as a whole. From the first conference in Munich in 2005 through to the fifth one in Dakar (2009), which was the largest microinsurance conference ever with an attendance of over 450 representatives from 63 countries, the International Microinsurance Conference continues to provide a unique opportunity for attendees to move the sector forward though collaboration and communication.
The 6th International Microinsurance Conference in Manila, as Dirk Reinhard, Munich Re Foundation and Chairman of the Conference Steering Committee, points out “has taken on even more importance with the G20’s Financial Inclusion Experts Group (FIEG) identifying insurance as one of the fundamental financial services that requires extending in their nine Principles for Innovative Financial Inclusion”.
Over the last few years, microinsurance in the Philippines has been on the increase compared to the rest of world. But with a population of around 92 million and only 13.92 % have life insurance, penetration is still very low. Efforts are ongoing to change this though. The Department of Finance and the Insurance Commission recenltly formulated the National Strategy and Regulatory Framework for Microinsurance. Among others, it promotes greater access by the poor to small, affordable microinsurance products and requires the formalisation of all informal schemes of microinsurance provision by 2012 to ensure that clients are adequately protected. The Philippine Insurers and Reinsurers Association recently pledged to inform some 27 million Filipinos on the merits of securing insurance policies in support of the Government’s financial literacy campaign.
About the International Microinsurance Conference
Initiated and organised by the Munich Re Foundation in collaboration with the Microinsurance Network, the aim of the conference is to be the international platform where experts share information, knowledge and experience in microinsurance in order to overcome existing challenges.
About Munich Re Foundation
The Munich Re Foundation seeks to provide answers to overarching questions from a variety of perspectives in order to find sustainable solutions in the area of risk prevention. Questions concerning development are linked to risk management and poverty reduction.
For more information:
• Contact Dirk Reinhard/Martina Mayerhofer (info@munichre-foundation.org)
• Visit www.munichre-foundation.org
About the Microinsurance Network
The Microinsurance Network is a network of organisations involved in microinsurance. Its mission is to promote the development and proliferation of good-value insurance products for people on low-income by providing a platform for information sharing and stakeholder coordination.
For more information:
• Contact Matthew Genazzini (matthew.ada@microfinance.lu)
Visit www.microinsurancenetwork.org
Wednesday, October 27, 2010
Insurers focus on microinsurance
(The Philippine Star) Updated October 26, 2010 12:00 AM Comments (0) View comments
MANILA, Philippines - Microinsurance will be one of the key topics of the Insurance Consciousness Week (ICW) from Oct. 26 to 30, to be co-promoted by the Philippine Insurers and Reinsurers Association (PIRA) and the Philippine Insurers Club (PIC).
PIRA chairman Michael Rellosa said microinsurance — or insurance for the poor and the marginalized — would be the main highlight of the ICW, which was declared 10 years ago by then President Joseph Estrada.
“Nature has once again reminded all us of the importance of being insured. Last year it was tropical storm Ondoy that flooded cars and houses. Now it’s typhoon Juan that devastated our farmlands. We really need to develop micro insurance to protect our poor countrymen who are exposed to various risks, including natural calamities,” Rellosa said.
He added that all over the world, insurance groups are looking at microinsurance as a tool to alleviate poverty. German reinsurance firm Munich Reinsurance Gmh (MunichRe), for one, is sponsoring the 6th International Microinsurance Conference which to be held in the Philippines next month.
The event is expected to draw at least 500 participants and over 80 speakers and facilitators from around the world. These participants include representatives from insurance and reinsurance companies, international organizations, non-government organizations (NGOs), development-aid agencies, the academe, policymakers, regulators and supervisors.
Rellosa said microinsurance is still facing various challenges in areas of distribution, claims handling and the lack of insurance literacy among the poor.
“Majority of our countrymen view insurance as an added expense when they should consider it as an investment and as a tool to manage the risks that they cannot handle. We need to educate them and the ICW is one way of reaching out to them,” he said.
Aside from the ICW and the Micro Insurance Conference, PIRA is also co-hosting the ASEAN Insurance Council meetings of insurance regulators and industry leaders from Southeast Asia. The association is also backing the Young ASEAN Managers Awards, which recognize the promising future leaders of the region
MANILA, Philippines - Microinsurance will be one of the key topics of the Insurance Consciousness Week (ICW) from Oct. 26 to 30, to be co-promoted by the Philippine Insurers and Reinsurers Association (PIRA) and the Philippine Insurers Club (PIC).
PIRA chairman Michael Rellosa said microinsurance — or insurance for the poor and the marginalized — would be the main highlight of the ICW, which was declared 10 years ago by then President Joseph Estrada.
“Nature has once again reminded all us of the importance of being insured. Last year it was tropical storm Ondoy that flooded cars and houses. Now it’s typhoon Juan that devastated our farmlands. We really need to develop micro insurance to protect our poor countrymen who are exposed to various risks, including natural calamities,” Rellosa said.
He added that all over the world, insurance groups are looking at microinsurance as a tool to alleviate poverty. German reinsurance firm Munich Reinsurance Gmh (MunichRe), for one, is sponsoring the 6th International Microinsurance Conference which to be held in the Philippines next month.
The event is expected to draw at least 500 participants and over 80 speakers and facilitators from around the world. These participants include representatives from insurance and reinsurance companies, international organizations, non-government organizations (NGOs), development-aid agencies, the academe, policymakers, regulators and supervisors.
Rellosa said microinsurance is still facing various challenges in areas of distribution, claims handling and the lack of insurance literacy among the poor.
“Majority of our countrymen view insurance as an added expense when they should consider it as an investment and as a tool to manage the risks that they cannot handle. We need to educate them and the ICW is one way of reaching out to them,” he said.
Aside from the ICW and the Micro Insurance Conference, PIRA is also co-hosting the ASEAN Insurance Council meetings of insurance regulators and industry leaders from Southeast Asia. The association is also backing the Young ASEAN Managers Awards, which recognize the promising future leaders of the region
Munich Re Launches Its First Microinsurance Product for Cooperatives in the Philippines
October 11, 2010 by Microfinance Africa
Filed under MICROFINANCE AROUND THE WORLD
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By Iris Lai, Insurancenewsnet.com -
Munich Re has rolled out its first microinsurance product in the Philippines to provide protection for the lending capacity of cooperatives to low-income groups against extreme weather events.
The loan protection microinsurance product was developed for Coop Life Insurance & Mutual Services, a cooperative life insurer for local cooperatives and members in the Philippines, in partnership with Deutsche Gesellschaft fur Technische Zusammenarbeit, a German government-owned enterprise for international sustainable development projects.
Munich Re is the sole reinsurer for this microinsurance product, distributed through more than 1,800 cooperatives in the Philippines. Coop Life is the composite insurance provider for cooperatives with products offered for life, property and health protection. It is also the primary insurer for local cooperatives and offers them portfolio protection.
The product will enable low-income households in the Philippines to receive benefits through their cooperative after devastating natural events. For the cooperatives, the microinsurance plan will guarantee liquidity of the loan portfolio and will provide quick payout via Coop Life, said Munich Re in a statement.
Munich Re is also looking into development of other new microinsurance products in the Philippines, said Thomas Mahl, business development manager at Munich Re Singapore. The partnership with GTZ is important to promote social responsibility for catastrophe protection in delivering benefits to the target group, he said.
The Philippines is highly exposed to extreme weather events such as typhoons, torrential rain and subsequent floods, creating financial risks to microfinancial institutions. Typhoon Morakot was among the top 10 largest global natural catastrophe in 2009, causing 614 deaths, US$1.6 billion in economic losses and US$110 million in insured losses, according to Munich Re.
Natural disasters interrupt the cash flow of cooperatives as member borrowers often cannot repay their loans, leading to insolvency of the cooperatives. In the Philippines, the cooperatives currently lend money at a higher interest rate, creating an additional financial burden to the low-income borrower.
The microinsurance product “will help cooperatives to spread the risk, secure their liquidity and enhance their micro-lending capacity even in critical times, at the same time making loans affordable to their members,” said Mahl.
In addition to reinsurance coverage, Munich Re will offer support in satellite data monitoring and analysis. There has been a great demand for catastrophe risk protection in Asia. Mahl said the reinsurer is looking to develop this product in other countries.
As extreme weather events induced by climate changes are likely to increase, Munich Re said microinsurance instruments are expected to gain relevance for affected communities as well as insurers’ portfolio.
The partnership with cooperatives could scale up the microinsurance coverage on a group level across the county, said Mahl. Also, these cooperatives offer extensive distribution and administration supports for product penetration.
Filed under MICROFINANCE AROUND THE WORLD
Leave a Comment
By Iris Lai, Insurancenewsnet.com -
Munich Re has rolled out its first microinsurance product in the Philippines to provide protection for the lending capacity of cooperatives to low-income groups against extreme weather events.
The loan protection microinsurance product was developed for Coop Life Insurance & Mutual Services, a cooperative life insurer for local cooperatives and members in the Philippines, in partnership with Deutsche Gesellschaft fur Technische Zusammenarbeit, a German government-owned enterprise for international sustainable development projects.
Munich Re is the sole reinsurer for this microinsurance product, distributed through more than 1,800 cooperatives in the Philippines. Coop Life is the composite insurance provider for cooperatives with products offered for life, property and health protection. It is also the primary insurer for local cooperatives and offers them portfolio protection.
The product will enable low-income households in the Philippines to receive benefits through their cooperative after devastating natural events. For the cooperatives, the microinsurance plan will guarantee liquidity of the loan portfolio and will provide quick payout via Coop Life, said Munich Re in a statement.
Munich Re is also looking into development of other new microinsurance products in the Philippines, said Thomas Mahl, business development manager at Munich Re Singapore. The partnership with GTZ is important to promote social responsibility for catastrophe protection in delivering benefits to the target group, he said.
The Philippines is highly exposed to extreme weather events such as typhoons, torrential rain and subsequent floods, creating financial risks to microfinancial institutions. Typhoon Morakot was among the top 10 largest global natural catastrophe in 2009, causing 614 deaths, US$1.6 billion in economic losses and US$110 million in insured losses, according to Munich Re.
Natural disasters interrupt the cash flow of cooperatives as member borrowers often cannot repay their loans, leading to insolvency of the cooperatives. In the Philippines, the cooperatives currently lend money at a higher interest rate, creating an additional financial burden to the low-income borrower.
The microinsurance product “will help cooperatives to spread the risk, secure their liquidity and enhance their micro-lending capacity even in critical times, at the same time making loans affordable to their members,” said Mahl.
In addition to reinsurance coverage, Munich Re will offer support in satellite data monitoring and analysis. There has been a great demand for catastrophe risk protection in Asia. Mahl said the reinsurer is looking to develop this product in other countries.
As extreme weather events induced by climate changes are likely to increase, Munich Re said microinsurance instruments are expected to gain relevance for affected communities as well as insurers’ portfolio.
The partnership with cooperatives could scale up the microinsurance coverage on a group level across the county, said Mahl. Also, these cooperatives offer extensive distribution and administration supports for product penetration.
Insurers intensify call for microinsurance after ‘Juan’
Insurers intensify call for microinsurance after ‘Juan’
GMANews.TV
GMANews.TV - Monday, October 25
In the aftermath of typhoon Juan (international code: Megi) which devastated northern Luzon last week, insurers have intensified the call for farmers to buy microinsurance.
“Nature has once again reminded all us of the importance of being insured. Last year, it was typhoon Ondoy that flooded cars and houses. Now, it’s typhoon Juan that devastated farm lands," Philippine Insurers and Reinsurers Association (PIRA) chairman Michael Rellosa said this weekend.
“We really need to develop microinsurance — or insurance for the poor and marginalized — to protect our poor countrymen who are exposed to various risks, including natural calamities," Rellosa said in an interview.
He pointed out that some local insurance companies are now developing products for farmers.
An example is the crop insurance of one company that insures the capital used by the farmer in planting his field, Rellosa said.
The insurance company will indemnify the farmer for the capital he used should the area be declared under a state of calamity, he added.
Rellosa said microinsurance is still confronting several challenges in areas of distribution, claims handling, and the lack of insurance literacy among the poor. “Right now, majority of our countrymen view insurance as an added expense when they should consider it as an investment and as a tool to manage the risks that they cannot handle. We need to educate them," he said.
Promoting security
Meanwhile, PIRA has partnered again with the Philippine Insurers Club (PIC) for the Insurance Consciousness Week (ICW), starting Oct. 26-30, 2010, that carries the theme “Promoting Security and Stability through Insurance Awareness."
The week will start with a thanksgiving mass at the Insurance Commission and dialogues with marginalized sectors on their perception of insurance and how the industry can appreciate insurance better, said PIC president Leticia Pagharion.
Charity works have also been lined up, she said.
The ICW will end in Davao City, with the Davao Insurers Club expounding on how people from Mindanao could appreciate insurance, Pagharion added.
Aside from the ICW and the Micro Insurance Conference, PIRA is also co-hosting the Association of Southeast Asian Nations’ (Asean) Insurance Council meetings of insurance regulators and industry leaders from Southeast Asia, she said.
Pagharion said the association is also backing the Young Asean Managers Awards which recognize the promising future leaders of the region.
“We can therefore say that in the four weeks that will follow, all eyes of the insurance industry in the region will be focused on the Philippines. It is PIRA’s privilege to be given this opportunity," Rellosa said. — JE/VS, GMANEws.TV
GMANews.TV
GMANews.TV - Monday, October 25
In the aftermath of typhoon Juan (international code: Megi) which devastated northern Luzon last week, insurers have intensified the call for farmers to buy microinsurance.
“Nature has once again reminded all us of the importance of being insured. Last year, it was typhoon Ondoy that flooded cars and houses. Now, it’s typhoon Juan that devastated farm lands," Philippine Insurers and Reinsurers Association (PIRA) chairman Michael Rellosa said this weekend.
“We really need to develop microinsurance — or insurance for the poor and marginalized — to protect our poor countrymen who are exposed to various risks, including natural calamities," Rellosa said in an interview.
He pointed out that some local insurance companies are now developing products for farmers.
An example is the crop insurance of one company that insures the capital used by the farmer in planting his field, Rellosa said.
The insurance company will indemnify the farmer for the capital he used should the area be declared under a state of calamity, he added.
Rellosa said microinsurance is still confronting several challenges in areas of distribution, claims handling, and the lack of insurance literacy among the poor. “Right now, majority of our countrymen view insurance as an added expense when they should consider it as an investment and as a tool to manage the risks that they cannot handle. We need to educate them," he said.
Promoting security
Meanwhile, PIRA has partnered again with the Philippine Insurers Club (PIC) for the Insurance Consciousness Week (ICW), starting Oct. 26-30, 2010, that carries the theme “Promoting Security and Stability through Insurance Awareness."
The week will start with a thanksgiving mass at the Insurance Commission and dialogues with marginalized sectors on their perception of insurance and how the industry can appreciate insurance better, said PIC president Leticia Pagharion.
Charity works have also been lined up, she said.
The ICW will end in Davao City, with the Davao Insurers Club expounding on how people from Mindanao could appreciate insurance, Pagharion added.
Aside from the ICW and the Micro Insurance Conference, PIRA is also co-hosting the Association of Southeast Asian Nations’ (Asean) Insurance Council meetings of insurance regulators and industry leaders from Southeast Asia, she said.
Pagharion said the association is also backing the Young Asean Managers Awards which recognize the promising future leaders of the region.
“We can therefore say that in the four weeks that will follow, all eyes of the insurance industry in the region will be focused on the Philippines. It is PIRA’s privilege to be given this opportunity," Rellosa said. — JE/VS, GMANEws.TV
Friday, October 15, 2010
Microinsurance Momentum in the Philippines
Microinsurance Momentum in the Philippines
by Kate McKee: Friday, October 8, 2010
CGAP
When hundreds of practitioners from around the world descend on Manila next month for the annual microinsurance conference, they’ll have a chance to observe firsthand a sector on the move. Sure, right now only 13.92 % of Filipinos have life insurance and penetration (premiums to GDP) is only 1.05%. But access is growing. And recent field research shows that once it is explained to them, low-income people say they want insurance and are willing to pay 20-30 pesos (US$.45-.$60) a week for it. As insurance providers begin to target the low-income market, they are offering a range of products: whole life; accident, burial and medical benefits plans; asset protection for microentrepreneurs hit by fire, lightning, flood, typhoon or earthquakes; and weather index crop insurance.
Over a hundred practitioners gathered in Manila on Friday, October 1 for a consultation on the new “Roadmap for Financial Literacy on Microinsurance,” an action plan prepared by a Technical Working Group comprised of all the key stakeholders from government, the microfinance and cooperative sectors and the insurance industry. This work has been supported by ambitious sector-building programs of the Asian Development Bank and GTZ that aim to institutionalize industry standards, develop products and carry out a nationwide microinsurance literacy and advocacy campaign.
The Roadmap is accompanied by a new “National Strategy and Regulatory Framework for Microinsurance” that aims to promote orderly growth in the sector while protecting consumers by requiring retail sellers of insurance policies to either register a Mutual Benefit Association (MBA) or team up with a regulated insurer. The focus is strictly on sustainable insurance provided by private providers, distributed by financial institutions who are close to the poor, and paid for by low-income people who see insurance as a good value proposition (referred to as “the paying poor”). The day before, the Financial Monetary Board had authorized mini-branches to widen financial access points, with microinsurance mentioned specifically as a permissible product.
The new rules are being rolled out through these road shows along with a broad financial literacy campaign. Itoy Almario (National Credit Council – Department of Finance), who has spearheaded the Roadmap process, pointed out that it is not just clients but also regulators and those in the industry who need a different mind-set – “Insurance is not just for the rich.”
One aspect of the whole process that stands out is the integration of client protection right from the beginning. Almario was quick to remind the audience that the current problem is not just misunderstanding of insurance by poorer Filipinos, but outright mistrust. Simple, plain-language contracts and claims settlement within 10 days would be a good starting point to building more trust. Consumer protection and client rights and benefits are central messages in the campaign.
This focus mirrors similar work in other countries and at the global level. For example, CGAP is commissioning a chapter for the forthcoming new version of the Micro-insurance Compendium (the first was co-published by the International Labor Organization and the Munich Re Foundation on nascent approaches to consumer protection regulation. While we tend to fear that regulation will increase costs and price poor people out of the market, this may be a case where basic rules of the game actually build trust and hence help build the market, rather than stifling innovation. The Smart Campaign is working on guidelines that apply the core client protection principles to micro-insurance, and the MicroInsurance Network is launching a task force on how to promote transparency and fair treatment as the sector expands.
In the Philippines, it looks like the three essential ingredients of responsible finance – industry standards, access-friendly regulation, and financial capability initiatives – are coming together in the microinsurance sector.
–Kate McKee
by Kate McKee: Friday, October 8, 2010
CGAP
When hundreds of practitioners from around the world descend on Manila next month for the annual microinsurance conference, they’ll have a chance to observe firsthand a sector on the move. Sure, right now only 13.92 % of Filipinos have life insurance and penetration (premiums to GDP) is only 1.05%. But access is growing. And recent field research shows that once it is explained to them, low-income people say they want insurance and are willing to pay 20-30 pesos (US$.45-.$60) a week for it. As insurance providers begin to target the low-income market, they are offering a range of products: whole life; accident, burial and medical benefits plans; asset protection for microentrepreneurs hit by fire, lightning, flood, typhoon or earthquakes; and weather index crop insurance.
Over a hundred practitioners gathered in Manila on Friday, October 1 for a consultation on the new “Roadmap for Financial Literacy on Microinsurance,” an action plan prepared by a Technical Working Group comprised of all the key stakeholders from government, the microfinance and cooperative sectors and the insurance industry. This work has been supported by ambitious sector-building programs of the Asian Development Bank and GTZ that aim to institutionalize industry standards, develop products and carry out a nationwide microinsurance literacy and advocacy campaign.
The Roadmap is accompanied by a new “National Strategy and Regulatory Framework for Microinsurance” that aims to promote orderly growth in the sector while protecting consumers by requiring retail sellers of insurance policies to either register a Mutual Benefit Association (MBA) or team up with a regulated insurer. The focus is strictly on sustainable insurance provided by private providers, distributed by financial institutions who are close to the poor, and paid for by low-income people who see insurance as a good value proposition (referred to as “the paying poor”). The day before, the Financial Monetary Board had authorized mini-branches to widen financial access points, with microinsurance mentioned specifically as a permissible product.
The new rules are being rolled out through these road shows along with a broad financial literacy campaign. Itoy Almario (National Credit Council – Department of Finance), who has spearheaded the Roadmap process, pointed out that it is not just clients but also regulators and those in the industry who need a different mind-set – “Insurance is not just for the rich.”
One aspect of the whole process that stands out is the integration of client protection right from the beginning. Almario was quick to remind the audience that the current problem is not just misunderstanding of insurance by poorer Filipinos, but outright mistrust. Simple, plain-language contracts and claims settlement within 10 days would be a good starting point to building more trust. Consumer protection and client rights and benefits are central messages in the campaign.
This focus mirrors similar work in other countries and at the global level. For example, CGAP is commissioning a chapter for the forthcoming new version of the Micro-insurance Compendium (the first was co-published by the International Labor Organization and the Munich Re Foundation on nascent approaches to consumer protection regulation. While we tend to fear that regulation will increase costs and price poor people out of the market, this may be a case where basic rules of the game actually build trust and hence help build the market, rather than stifling innovation. The Smart Campaign is working on guidelines that apply the core client protection principles to micro-insurance, and the MicroInsurance Network is launching a task force on how to promote transparency and fair treatment as the sector expands.
In the Philippines, it looks like the three essential ingredients of responsible finance – industry standards, access-friendly regulation, and financial capability initiatives – are coming together in the microinsurance sector.
–Kate McKee
Sunday, October 3, 2010
IC, Pira to entice poor Pinoys to get insurance
Business Mirror
Written by Jun Vallecera / Reporter
Sunday, 03 October 2010 10:40
POLICY crafters, regulators and industry players vowed on Friday to enlighten poor, but enterprising Filipinos, whether rural- or urban-based, on the merits of acquiring some form of protection against financial reverses and other forms of misfortune.
The Insurance Commission (IC), the Philippine Insurers and Reinsurers Association, the various small units engaged in microinsurance, and technocrats from the Department of Finance met at the Century Park Hotel in Manila and committed to inform as many of the estimated 27 million poor Filipinos who do not have any kind of risk protection at all.
Less than 3 million of these very poor Filipinos have purchased an insurance policy against sickness, dismemberment, property loss, natural perils or even death, and all because an overwhelming number of them are uninformed, said Joselito Almario, deputy executive director of the National Credit Council.
The event formalized the pursuit of what has always been an informal approach to microinsurance and, at the same time, marked the start of a literacy campaign and road show meant to mainstream the microinsurance program.
Almario said only about half of the less than 3 million Filipinos that bought microinsurance policies obtained them from the formal insurance providers, potentially exposing them to many more risks than just the loss of a house or limb.
He would not blame the formal sources of risk protection for not coming down to where their services are sorely needed on account of the high transaction costs, actuarial difficulties and other factors the microinsurance program faces.
Nevertheless, Almario said, the government recognized the need to bring the large swathe of the unprotected population in from the cold and provide them with a measure of risk-mitigating programs like microinsurance.
This was the reason the IC issued a circular in March that laid down policies on what was up to then informal microinsurance activities.
The IC followed up with another circular that set guidelines on the treatment of funds collected from informal microinsurance activities.
Right now, Almario said, performance standards are being set and some fine-tuning is done on the risk-based regulatory framework the IC implements to suit the microinsurance business.
Industry players are also being urged to come up with innovative products so more Filipinos are encouraged to take risk protection for contingent events.
In essence, microinsurance is all about policies written costing as small as P300 a year yielding benefits as large a P200,000, Almario said.
Written by Jun Vallecera / Reporter
Sunday, 03 October 2010 10:40
POLICY crafters, regulators and industry players vowed on Friday to enlighten poor, but enterprising Filipinos, whether rural- or urban-based, on the merits of acquiring some form of protection against financial reverses and other forms of misfortune.
The Insurance Commission (IC), the Philippine Insurers and Reinsurers Association, the various small units engaged in microinsurance, and technocrats from the Department of Finance met at the Century Park Hotel in Manila and committed to inform as many of the estimated 27 million poor Filipinos who do not have any kind of risk protection at all.
Less than 3 million of these very poor Filipinos have purchased an insurance policy against sickness, dismemberment, property loss, natural perils or even death, and all because an overwhelming number of them are uninformed, said Joselito Almario, deputy executive director of the National Credit Council.
The event formalized the pursuit of what has always been an informal approach to microinsurance and, at the same time, marked the start of a literacy campaign and road show meant to mainstream the microinsurance program.
Almario said only about half of the less than 3 million Filipinos that bought microinsurance policies obtained them from the formal insurance providers, potentially exposing them to many more risks than just the loss of a house or limb.
He would not blame the formal sources of risk protection for not coming down to where their services are sorely needed on account of the high transaction costs, actuarial difficulties and other factors the microinsurance program faces.
Nevertheless, Almario said, the government recognized the need to bring the large swathe of the unprotected population in from the cold and provide them with a measure of risk-mitigating programs like microinsurance.
This was the reason the IC issued a circular in March that laid down policies on what was up to then informal microinsurance activities.
The IC followed up with another circular that set guidelines on the treatment of funds collected from informal microinsurance activities.
Right now, Almario said, performance standards are being set and some fine-tuning is done on the risk-based regulatory framework the IC implements to suit the microinsurance business.
Industry players are also being urged to come up with innovative products so more Filipinos are encouraged to take risk protection for contingent events.
In essence, microinsurance is all about policies written costing as small as P300 a year yielding benefits as large a P200,000, Almario said.
Gov’t eyes micro-insurance regulation next year
Business World
Finance
Posted on 06:36 PM, October 01, 2010
Gov’t eyes micro-insurance regulation next year
THE FINANCE Department is aiming to regulate all micro-insurance institutions by next year, with a technical working group finalizing a roadmap toward literacy in an indemnity targeting the low-income sector.
Finance Undersecretary Gil S. Beltran said the roadmap will help the government regulate micro-insurance companies, noting that there are many "fly-by-night" insurers without citing data.
"They are not exactly illegal. They are legitimate. It’s just that we have to move them all to the regulatory net," Mr. Beltran said at the sidelines of a micro-finance forum yesterday at the Century Park Hotel in Manila.
Mario C. Valdes, general manager of the Philippine Insurers and Reinsurers Association (PIRA) and member of the working group, said about 17,000 cooperatives offering insurance to their members should register with the Insurance Commission pursuant to its circular last January.
Memorandum Circular (MC) 1-2010 has laid out regulations covering micro-insurance, among them, that premiums to be paid by policy holders should not exceed 5% of the daily minimum wage in Metro Manila, and that insurance coverage should not be more than 500 times of it.
At current rates, micro-insurers should not charged policy holders more than P20 a day with coverage not exceeding P200,000 a year.
"We are targeting that by next year, all companies [offering micro-insurance] and their agents should be registered with the Insurance Commission," Mr. Valdes said by phone.
To do this, information dissemination about micro-insurance is ongoing nationwide. This is being facilitated by the working group composed of representatives from the Finance department-National Credit Council (NCC), Insurance Commission, Securities and Exchange Commission, and the National Anti-Poverty Commission, PIRA and other insurance associations, among others.
In the forum on Friday, NCC Executive Director Joselito S. Almario also said the working group would also distribute modules by the second quarter of next year to "increase knowledge" of different sectors such as the local government units and "potential clients" about micro-insurance.
"The problem is that companies offering micro-insurance do not know how to go down to the level of the informal sector, while informal sector is not even familiar about micro-insurance," Mr. Almario said in a separate interview.
He noted micro-insurance "had long been offered by insurance companies" only that the term was only coined by the government last January.
Michael F. Rellosa, president of the Fortune General Insurance Corp., cited an example. He said his company has been offering for five years now a one-time travel insurance, wherein policy holders who would travel in the future may pay only P50 for a coverage worth P100,000.
"If for example you would go to Baguio, you can avail yourself of this travel insurance. Para siyang tinge na insurance," Mr. Rellosa said in a separate interview.
Under MC 1-2010, micro-insurance is defined as "an activity providing specific insurance [and] insurance-like... products and services that meet the needs of the low-income sector for risk protection... and other contingent events."
Mr. Almario said they would call on insurance companies to have their agents attend trainings on micro-insurance later next year. "LGUs may also help us in promoting trainings for agents," he added. -- Prinz P. Magtulis
Finance
Posted on 06:36 PM, October 01, 2010
Gov’t eyes micro-insurance regulation next year
THE FINANCE Department is aiming to regulate all micro-insurance institutions by next year, with a technical working group finalizing a roadmap toward literacy in an indemnity targeting the low-income sector.
Finance Undersecretary Gil S. Beltran said the roadmap will help the government regulate micro-insurance companies, noting that there are many "fly-by-night" insurers without citing data.
"They are not exactly illegal. They are legitimate. It’s just that we have to move them all to the regulatory net," Mr. Beltran said at the sidelines of a micro-finance forum yesterday at the Century Park Hotel in Manila.
Mario C. Valdes, general manager of the Philippine Insurers and Reinsurers Association (PIRA) and member of the working group, said about 17,000 cooperatives offering insurance to their members should register with the Insurance Commission pursuant to its circular last January.
Memorandum Circular (MC) 1-2010 has laid out regulations covering micro-insurance, among them, that premiums to be paid by policy holders should not exceed 5% of the daily minimum wage in Metro Manila, and that insurance coverage should not be more than 500 times of it.
At current rates, micro-insurers should not charged policy holders more than P20 a day with coverage not exceeding P200,000 a year.
"We are targeting that by next year, all companies [offering micro-insurance] and their agents should be registered with the Insurance Commission," Mr. Valdes said by phone.
To do this, information dissemination about micro-insurance is ongoing nationwide. This is being facilitated by the working group composed of representatives from the Finance department-National Credit Council (NCC), Insurance Commission, Securities and Exchange Commission, and the National Anti-Poverty Commission, PIRA and other insurance associations, among others.
In the forum on Friday, NCC Executive Director Joselito S. Almario also said the working group would also distribute modules by the second quarter of next year to "increase knowledge" of different sectors such as the local government units and "potential clients" about micro-insurance.
"The problem is that companies offering micro-insurance do not know how to go down to the level of the informal sector, while informal sector is not even familiar about micro-insurance," Mr. Almario said in a separate interview.
He noted micro-insurance "had long been offered by insurance companies" only that the term was only coined by the government last January.
Michael F. Rellosa, president of the Fortune General Insurance Corp., cited an example. He said his company has been offering for five years now a one-time travel insurance, wherein policy holders who would travel in the future may pay only P50 for a coverage worth P100,000.
"If for example you would go to Baguio, you can avail yourself of this travel insurance. Para siyang tinge na insurance," Mr. Rellosa said in a separate interview.
Under MC 1-2010, micro-insurance is defined as "an activity providing specific insurance [and] insurance-like... products and services that meet the needs of the low-income sector for risk protection... and other contingent events."
Mr. Almario said they would call on insurance companies to have their agents attend trainings on micro-insurance later next year. "LGUs may also help us in promoting trainings for agents," he added. -- Prinz P. Magtulis
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