Microinsurance now covering 7.8-million poor Pinoys

MANILA, Philippines - There are now 7.8 million Filipinos covered by microinsurance, according to the Insurance Commission (IC).

During the national conference for microinsurance held at the Sofitel Hotel yesterday, the IC said these Filipinos were covered by around five million microinsurance policies.

IC Actuarial Division chief Reynaldo Vergara said the number of microinsurance policies issued covered roughly one-third of the 27 million Filipinos classified as among the poorest in the country.

“They are the market for the microinsurance industry,” Vergara added.

At the end of 2011, outstanding microinsurance policies stood at 3.5 million. The dramatic increase in the number of insured can be attributed to the leap in the number of institutions now selling microinsurance.

There are now 80 microinsurance products, 54 classified as life products while 26 are non-life products. These are sold by commercial private life insurance companies such as Philippine American Life and General Insurance Co. (PhilamLife) and the Philippine Prudential Life Insurance Co. Inc. (Philippine Prudential), which have joined the microinsurance bandwagon.

Aside from insurers, those who can sell microinsurance products are mutual benefit association (MBAs), cooperatives and credit unions.

Assisting in the expansion of the distribution network of the microinsurance industry are microfinance institutions (MFIs) and rural banks.

Vergara pointed out, however, that these institutions must have undergone the required licensure training with the IC before they are allowed to sell microinsurance products.

The microinsurance framework makes it clear that the premiums computed on a daily basis will not exceed five percent of the current minimum wage rate for non-agricultural workers in Metro Manila.

The maximum sum of guaranteed benefits is not more that 500 times the daily minimum wage rate.