IC gearing for adoption of catastrophe insurance
MANILA – The Insurance Commission seeks greater cooperation between regulators and the privately-owned insurers in gathering data that will form the basis for the adoption of so-called indexed insurance products that are already popular in countries in the region.
IC chief Vida Chiong called on private insurers to help government gather the necessary data that will become the basis for this type of risk protection alternately called catastrophe insurance.
“There is a need for us to gather enough data in a cooperative endeavor. This is an area where public-private cooperation is needed,” Chiong said.
There is a parallel effort by countries under the Association of South East Asian Nations (ASEAN) to gather catastrophe data on a regional scale as part of the larger goal of popularizing insurance as protection for any contingent event.
The so-called insurance penetration rate in ASEAN pales in comparison to rates prevalent in more advanced economies in Europe, the United States and Japan, for instance.
With the introduction of catastrophe insurance in the Philippines as one more commercially available risk cover, its entry will help widen the popularity of insurance and boost further the country’s low insurance penetration rate of only around 13 percent, Chiong said.
According to Chiong, the IC will seek the help of the local weather bureau to help regulators and industry players craft a commercially viable catastrophe insurance product down the line.
She said that both the Asian Development Bank and the World Bank are interested in individual initiatives across ASEAN seeking to develop just such a product at a larger scale than is possible at present.
Earlier, the German government’s Gesellschaft fur Technische Zusammenarbeit (GTZ), in association with Coop Life Insurance and Mutual Benefit Services (CLIMBS), launched its own indexed insurance or catastrophe insurance product that it markets as a micro-insurance policy for millions of uninsured Filipino farmers.
GTZ has started gathering weather-related data in Leyte province where the program is piloted in hopes of applying that they learned there in crafting an indexed insurance product that can be sold across the country eventually.
GTZ had been struck by the ferocity with which typhoons lash on the often uninsured crops of hapless Filipino farmers, destroying not just their crops but their very lives as well.
Indexed or catastrophe insurance was one of the key issues that was discussed at the recently concluded Sixth International Microinsurance Conference the Philippines hosted two weeks ago.*PNA
