THE PHILIPPINES, India and Indonesia offer the biggest opportunities for the fledging microinsurance industry, which has a potential market of 3 billion people, industry officials said on Tuesday.
Microinsurance offers coverage for people with low incomes, including products such as life insurance, and is branching into areas such as offering farmers polices against extreme weather.
Over 140 million people, mostly in Africa and Asia, are now covered by affordable insurance premiums, and studies showed the potential market is up to 3 billion, the Munich Re Foundation and International Labour Organisation said ahead of a three-day microinsurance conference in Manila that began yesterday.
Craig Churchill, head of the global Microinsurance Network and team leader of the International Labour Office’s Microinsurance Innovation Facility, said more than half of microinsurance products were focused on life and health while less than 10% cover farms.
“We’re still at the experimental stage in offering products that could cover agriculture,” he said, adding there was huge potential growth for such products, citing impacts of typhoons Ketsana and Parma in the northern Philippines in late 2009.
Those typhoons, and Typhoon Megi in October, caused deaths, floods, landslides, as well as damage to crops and infrastructure.
Last month, German reinsurer Munich Re said it would launch a reinsurance project in the Philippines to cover cooperative companies against extreme weather events. That will be the first microinsurance product in the country to offer farmers some protection against perennial typhoon and flooding problems. Another three groups offer nonlife products.
Mr. Churchill said the Philippines, Indonesia and India offer the biggest market opportunities due to their regulatory frameworks, strong cooperative system and potential risks from extreme weather and disasters such as earthquake and volcanoes.
About 14% of the Philippines’ 96 million people have insurance, including 2.9 million people covered by microinsurance, mostly as members of cooperatives, said Joselito S. Almario, a director of the Finance department.
He said microinsurance had a potential Philippine market of nearly 35 million people willing to pay a premium of P20-P30 a week for coverage of up to P120,000 in life and nonlife benefits.
“It costs them just a pack of cigarettes a day,” said Mr. Almario, who is also deputy executive director of the National Credit Council.
The government has set a maximum daily premium of P20, 5% of the daily minimum wage in Metro Manila, for life and health insurance products offering payouts of up to P200,000 for more than a dozen insurers, including rural banks and cooperatives. — Reuters
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