By Ehda Dagooc (The Freeman) Updated March 12, 2012 12:00 AM
CEBU, Philippines - While only about 11 percent of Filipinos are insured
or have availed of risk protection, the government has moved to
encourage insurance companies to offer micro-insurance products for the
masses, that would have a maximum daily premium not exceeding P20.
The Insurance Commission (IC), together with the Department of
Finance-National Credit Council (DOF-NCC) have started this campaign via
a nationwide Financial Literacy roadshow.
DOF-NCC director Joselito Almario said the promotion of micro-insurance
in the Philippines is expected to heighten awareness of more Filipinos
to take formal insurance to protect their future.
Likewise, insurance companies in partnership with people's
organizations, micro-finance, cooperatives, and community groups will be
able to tap the greater number of people to get insurance premium in an
affordable and attractive product, that premium cost will not exceed P20
per day.
Because of this campaign, there are now about 27 insurance providers
that have partnered with different cooperatives, and community
organizations to offer insurance premiums to the mainstream market.
Because of this campaign, as of January this year, there are already 3.5
million approved policies in the micro-insurance category, in both life
and non-life insurance products.
Micro-insurance is considered to contribute to national poverty
alleviation strategy. Almario said in order to put this strategy into
action, the government has forged a partnership with the German
International Cooperation—Microinsurance Innovations Program for Social
Security (GIZ-MIPSS) and the Asian Development Bank-Japan Fund for
Poverty Reduction (ADB-JFPR) to enhance financial literacy on
micro-insurance, especially of the low-income sector.
Of the total 94 million population in the Philippines, about 25 million
of whom are in the poverty line or 26.5 percent. Only 2.9 million of the
25 million population who are in the poverty line are some kind of risk
protection or covered in insurance products, mostly are the informal
insurance schemes offered by cooperatives, or organizations in the
communities.
Despite the active stance of some insurance companies, and even
cooperatives to provide risk protection or insurance to the mainstream
Filipinos, this is still intimidate the low income sector, because of
the high cost of premiums, and strict requirement process.
This time, through this campaign, the micro-insurance products'
requirements are streamlined, that even a barangay clearance can be
accepted.
The campaign is expected to raise awareness of the majority of Filipinos
to get themselves insured, without sacrificing their daily necessity,
while a P20 daily premium requirement is affordable.
ADB-JFPR chief of party stressed that through this campaign, it is
envisioned that future micro-insurance advocates from will help address
the two causes of low insurance coverage among the low-income sector—the
lack of awareness of insurance and low financial literacy level.
Access to appropriate and affordable risk protection instruments for the
low-income sector faces obstacles: unaffordable and inadequate insurance
products, persistence of informal insurance schemes and low appreciation
of the importance of micro-insurance.
The government, through the initiatives of the IC and its partners,
continues the momentum of opportunities opened by the National Strategy
for Micro-insurance and the Regulatory Framework for Microinsurance
launched in 2010.
Recently, the group held a roadshow in Cebu, which sought to educate
representatives of both the public and the private sector about the
framework and status of micro-insurance in the Philippines, emphasizing
the respective roles each on can take in the advocacy of
micro-insurance. - THE FREEMAN
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CARLOS ANI - International Microfinance Consultant - SEEDFINANCE Corporation Chairman
Mailing address: PO Box 90 UPLB Los Banos Laguna, Philippines 4031
Emails: carlosani@gmail.com , carlosani@seedfinance.net
Landline Phone: +63495010127 (PLDT)
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