CEBU, Philippines - The Philippines is targeting to raise its insurance penetration rate to at least 3% within the next three years, an Insurance Commission (IC) official said.
Insurance Commissioner Emmanuel Dooc said the Philippines has one of the lowest insurance penetration rates in South East Asia, ranging at 0.9%-1.02% in the last five years.
Dooc said the country's penetration rate stood at 1.84% in the first half of 2015, lower than ASEAN's average. In South East Asia, Singapore has the highest penetration rate at close to 6%, Dooc said.
“The ASEAN average is about 3.4%, so our target is to approximate that number,” Dooc told a press briefing late Thursday at the sidelines of a meeting of finance ministry officials from the Asia-Pacific Economic Cooperation (APEC) group in Mactan Island, Cebu.
Dooc, however, claimed that such goal is “difficult to achieve” because the penetration rate highly depends on the percentage of premiums to the country's gross domestic product (GDP). A premium is the amount paid for an insurance policy.
"We need to outpace the GDP in order to improve in our penetration rate," Dooc said, adding the rate, however, has improved with the presence of microinsurance in the country. "Although the premiums collected by microinsurance businesses is not that significant," he said.
Dooc cited the financial road map Cebu Action Plan (CAP) the Philippines drafted for APEC as a means to help the country improve in insurance coverage.
One of CAP's goals is financial resilience which pushes for accessible and affordable insurance products for low-income citizens who are mostly vulnerable to disasters.
Dooc believed if the poor will have access to affordable insurance, the country will definitely improve in its penetration rate.
Dooc added that a proposed mandatory calamity insurance coverage for households and small and medium enterprises is now being studied by the Department of Finance.
The IC official hopes to get DoF's support and that President Aquino will sign an Executive Order for the proposed law.
In the same briefing, Bangko Sentral ng Pilipinas Deputy Governor Nestor Espenilla Jr. said financial inclusion pertains to bringing financial services -- including bank and insurance -- to all citizens.
"Financial inclusion is one of the many paths leading to inclusive growth," Espenilla said.
Dooc explained inclusive insurance has been the country's top agenda even before the CAP was created. He added the microinsurance strategy is a regulatory framework and a way to financial inclusion.
Dooc said IC want to integrate that strategy into the BSP's National Strategy for Financial Inclusion which was launched last July. — Carlo S. Lorenciana (FREEMAN)