German gov't extends microinsurance program
THE GERMAN government's €3-million technical assistance to develop
microinsurance in the Philippines has been extended by another three
years, while another €3-million program, this time, covering other Asian
countries, is in the works.
The German Agency for International Cooperation (GIZ), which represents
the German government in its development cooperation efforts around the
world, pumped in €3 million to the Philippines in 2009 to create the
Microinsurance Innovations Program for Social Security (MIPSS).
The program is due to end this December, but GIZ MIPSS program manager
Antonis Malagardis said an extension has been approved.
"The extension will be budget-neutral. There won't be new public funds.
[The funding] will be taken more from other sources such as the German
private sector or our local partners," Mr. Malagardis told BusinessWorld
at the sidelines of the National Conference on Microinsurance last week.
"Under the extension, we will focus on completing our work on crop
insurance and integrating it with other initiatives of the private and
public sector," he explained.
GIZ is currently piloting a new form of crop insurance in Ormoc, Leyte
with the help of Philippine Crop Insurance Corp. The product will insure
irrigated rice farmers, so that if their harvest for the season drops
below the 10-year average, they will receive a payout covering the
difference in yield.
Meanwhile, a new three-year €3-million technical assistance will fund
the development of microinsurance in Asia, focusing on four to six
countries, including the Philippines, Mr. Malagardis said.
The project will center on regulatory support and regulatory issues, he
explained.
In the Philippines, GIZ MIPSS was able to help the Insurance Commission
create a comprehensive microinsurance regulatory framework: defining
microinsurance products, setting requirements for providers and agents,
launching a nationwide financial literacy campaign and even proposing
consumer protection and dispute settlement procedures.
"As the Philippines is one of the pioneers of microinsurance, we also
hope to create a knowledge hub in Manila. We will be able train
advocates here and make resources available for other people," Mr.
Malagardis said.
The new program still needs approval by the Federal Ministry for
Economic Cooperation and Development but is expected to begin by January
2013.
Mr. Malagardis urged the country to build on the significant gains it
has already reaped since the technical assistance began in 2009, which
has seen microinsurance coverage leap to 7.8 million Filipinos this year
from only 3.1 million in 2008.
The next steps, he said, will be to study the role of technology to
improve microinsurance products. The government and the private sector
should also develop distribution channels so they can reach more people
with less cost.
"The local government, for example, can be one of the conduits so that
microinsurance has a stronger reach within the community," he explained.
Lastly, he added, the Philippines must delve further into microinsurance
for natural catastrophes as the poor are often the most hard-hit.
According to GIZ's 2010 "Study on Demand of Insurance for Natural
Catastrophes," the Philippines is one of the countries most prone to
natural disasters, with an average of 25 typhoons hitting the country
every year. -- Diane Claire J. Jiao
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