IC urged to allow online shopping apps to sell insurance products

MANILA, Philippines — The Insurance Commission (IC) is being urged to allow online shopping platforms as intermediaries for the sale and distribution of insurance products even without license to broaden Filipinos’ access to social protection.

In the latest policy paper by Romulo Law firm and insurer Pru Life UK, the parties called on the government to look into how online shopping platforms can serve as insurance intermediaries.

The IC has opened up access to insurance, through its regulations allowing electronic commerce, remote selling, digital payments and alternative distribution channels, among others.

But Romulo senior partner Cynthia del Castillo said the full potential of online shopping platforms has yet to be maximized because these apps are not insurance-specific.

The paper emphasized that there are still questions on whether some initiatives in distributing insurance products to the broader population are permissible under current regulations.

Currently, insurers are still seeking regulatory approvals for new initiatives on a case-to-case basis and under a regulatory sandbox framework.

For one, Pru Life is selling electronic vouchers in Shopee, Lazada, and other online selling platforms for consumers of individual life insurance products.

“Insurers see the potential of online selling platforms as a new mode of distributing insurance products. We view these online selling platforms as a new type of insurance intermediary,” the paper said.

Romulo and Pru Life maintained that current regulations could give rise to a regulatory framework that allows online shopping platforms, including electronic wallets that have served as e-commerce platforms, to act as an intermediary for the sale and distribution of insurance products.

As intermediaries, they noted that online shopping platforms and similar enterprises should be allowed to display insurance products in their respective platforms for the purpose of marketing and product information, as well as consumer education.

“If the consumer is interested, the platform should enable the consumer to reach the insurer so that the application process may commence,” the paper said.

“The online platform could also continue to provide a channel for open communication between the insurer and the consumer. This is consistent with a platform function of the intermediary,” it said.

Romulo and Pru Life emphasized that agreements between online platforms and the insurers will be screened by the IC.

However, they argued that online platforms themselves, not being actively engaged in the insurance business, should not be required to register with, or obtain a license from, the IC.

Pru Life UK president and CEO Eng Teng Wong, for his part, said digitalization has been accelerated by the pandemic but insurance penetration remains low at about two percent of gross domestic product, among the lowest in the region.

Wong maintained that harnessing human capital and the power of mobile and online applications and platforms can broaden the reach and accessibility to many affordable life and health insurance solutions.