Microinsurance coverage in the Philippines is expected to rise to 73.3 million individuals or 16.3 million households by 2020, a study by the the International Cooperative and Mutual Insurance Federation (ICMIF) and Microinsurance MBA Association of the Philippines (RIMANSI) has revealed.
It shows that there are two types of mutual microinsurance organisations in the Philippines: cooperative insurance societies (CIS) which primarily have an institutional membership; and microinsurance mutual benefit associations (Mi-MBAs) which are not-for-profit organisations with low-income individuals as members. Of the 77 percent, microinsurance market share covered by mutual microinsurance Mi-MBAs comprise around 51 percent and CISs comprise around 26 percent.
The report, entitled Mutual and Cooperative Microinsurance in the Philippines: A Landscape Study, highlights the substantial growth witnessed since the local insurance commission introduced new regulations in 2006 for Mi-MBAs, stating that that microinsurance coverage expanded from 3.1 million before 2008 to 31.1 million by the end of 2014.
The study underlines the potential role that mutual microinsurance can play in closing the protection gap in the Philippines.
Conducted as part of the ICMIF 5-5-5 Mutual Microinsurance Strategy – an initiative which aims to provide mutual microinsurance solutions to 5 million low – income households, in five emerging markets including Colombia, India, Kenya and Sri Lanka over the next five years- the findings of the report demonstrate a number of features unique to mutual and cooperative microinsurers.
Mi-MBA policyholders were shown to have an important role in the governance and management of the organisation (60 percent of the responses state that the members are involved in the claims approval and settlement process).
Additionally, there was also a high prevalence amongst Mi-MBA’s and CIS’s of offering value-added services, for example 60 percent of Mi-MBA’s and 100 percent of CIS’s offered financial literacy training to potential and existing policyholders. Furthermore, 90 percent of member policyholders of Mi-MBA’s were women according to data compiled by RIMANSI. Findings also showed Mi-MBA’s settling an impressive 88 percent of claims within 10 days.
RIMANSI executive director Jun Jay Perez said: “We are delighted to be able to publish the findings of this report, which highlight the positive outlook for the mutual microinsurance sector in the Philippines.
“In response, we are pleased to work with the ICMIF Foundation to develop the capacity of the MBA sector. We have already successfully reached out to over 4 million individuals who were previously unprotected with microinsurance as a result of our partnership through the 5-5-5 Strategy.”