Microinsurance premiums climb despite pandemic

MANILA, Philippines — The adverse economic effects of the pandemic and increased awareness of Filipinos have boosted the insurance contributions from low-income people to P8.5 billion as of the third quarter of 2022.

Latest data released by the Insurance Commission (IC) showed that total premium from microinsurance providers rose by 15.5 percent to P8.49 billion in the first nine months of 2022.

Microinsurance is specifically targeted to help low-income households or those who have limited savings. It covers compensation for illness, accidents, and death.

IC commissioner Dennis Funa noted that the sustained recovery from the effects of the pandemic contributed to the increase in microinsurance premiums.

Funa said there is also an increasing awareness of the public in terms of the importance of having affordable insurance products.

“Nevertheless, the lingering adverse economic impact of the pandemic at the micro level may have contributed to this increase, as those who availed microfinance or credit transactions were able to avail of the bundled microinsurance products,” Funa said.

Of the P8.49 billion in the third quarter, mutual benefit associations (MBAs) covered the bulk at 60 percent of the total premiums at P5.07 billion. This represents a 14.2 percent growth from the P4.44 billion recorded in 2021.

Life insurers also saw contributions improve by nine percent to P2.35 billion, covering 28 percent of the total.

Non-life insurers, on the other hand, cornered 13 percent at P1.07 billion, jumping by over 43 percent from P749.44 million in 2021.

Funa said the growth of the microinsurance industry shows that the product is a viable option for Filipinos with lower income that are seeking risk protection.

“Microinsurance, in its present state, plays a great role in complementing other microfinance services available, allowing for a more inclusive financial market,” Funa said.

As of the third quarter last year, 50 entities actively engaged in providing microinsurance products, of which 23 are MBAs, 15 non-life, and 12 life insurers.