BAC introduces weather-based insurance

MANILA, Philippines - The Bankers Assurance Corp. (BAC) has rolled-out the country’s newest weather-based insurance product to help ease-out loan defaults by borrowers whenever natural calamities occur. 

Called the Weather Index Insurance-Credit Asenso, this product helps rural banks (RBs), non-government organizations (NGOs) and micro-insurance financial institutions (MFIs) to cope with the effects of typhoons (windspeed) or floods (rainfall) on the low income sector.

BAC president Joel T. Almagro said that the Philippines has been visited by very strong typhoons and floods that have ravaged large tracts of lands all over the country.

These extreme weather conditions caused high loan defaults especially among the low income sector, which Credit Asenso hopes to address. 

“MFIs catering to the low-income sector are the most at risk at experiencing bad loans. As much as 70 percent of these defaults are due to the occurence of natural calamities,” he said. 

Almagro explained that Credit Asenso offers lending institutions security for their operation or loan portfolio especially since the country is visited by typhoons at least 20 times per year.

Credit Asenso uses a state-of-the-art satellite technology that determines event triggers for rainfall and windspeed.

This technology ensures that claims are determined on a real time basis or can be viewed online  thus there is no need for lengthy and time consuming claims investigations and loss adjustments. 

Based on their location in the Philippines, trigger indices for windspeed and rainfall have been developed for each municipality, which makes it an innovative product in the Philippine’s micro-financing sector.

Weather Index Insurance – Credit Asenso is a product developed by BAC, a member of the Malayan Group of Insurance companies, the largest non-life insurance group in the country, and international partners DHI, a leading forecast and real-time modeling of extreme weather events institution as well as Munich Reinsurers (Munich Re), one of the world’s largest risk carriers.