Coop Life Insurance and Mutual Benefit Services (CLIMBS), a cooperative group comprising 1,501 local insurers, partnered with German reinsuirer Munich Re and with the Deutsche Gessellschaft fur Technische Zusammenarbeit GmbH (GTZ) to strengthen its reinsurance mechanism which will allow cooperatives in the Philippines offering microinsurance to survive post-disaster microinsurance claims.
Microinsurers have small financial capability and with the Philippines visited by a string of strong typhoons every year, claims from storm damages often result to most small insurers to fold up.
Between October and December this year alone, the Philippine Atmospheric Geophysical and Astronomical Services Administration (Pagasa) forecast between five to eight strong typhoons entering the country.
The GTZ, in tandem with Munich Re and the German government’s Federal Ministry for Economic Cooperation and Development or BMZ, agreed to take on CLIMBS’ reinsurance needs consistent with the global effort to promote microinsurance.
At the sidelines of ceremonies marking the 10th National Cooperative Summit, CLIMBS officials said extreme events as severe typhoons pose great financial risks to micorinsurance-providing copperatives as these ruin their finances as coop borrowers default on their loans.
Loan defaults are common, cooperatives typically charge relatively high interest rates, defeating the very purpose of the microinsurance program itself.
CLIMBS president Fermin Gonzales said the umbrella organization will act as primary insurer of local coops and guarantee clients quick payouts for insurance claims triggered by preagreed weather disturbance parameters such as wind speed and water levels. CL, Daily Tribune
Invoke Article 33 of the ILO constitution
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