A report undertaken by the International Cooperative and Mutual Insurance Federation (ICMIF) and Microinsurance MBA Association of the Philippines, Inc (RIMANSI) has illustrated massive potential for mutual microinsurance in the Philippines.
The study shows the existence of two types of mutual microinsurance organisations in the country: The Cooperative insurance Societies (CIS), which primarily has an institutional membership, and Microinsurance Mutual Benefit Associations (Mi-MBA) which is a not-for-profit organisations with low-income individuals as members.
Of the 77% microinsurance market share covered by mutual microinsurance, Mi-MBA’s comprise around 51% and CIS’s comprise around 26%.
The report, entitled Mutual and Cooperative Microinsurance in the Philippines: A Landscape Study, underlines the substantial growth witnessed since the local Insurance Commission introduced new regulations in 2006 for Mi-MBA’s. Results show that microinsurance coverage has increased from 3.1 million before 2008 to 31.1 million by the end of 2014, with that number expected to rise to 73.3 million by 2020 (16.3 million households).
Conducted as part of the ICMIF 5-5-5 Mutual Microinsurance Strategy – an initiative which aims to provide mutual microinsurance solutions to 5 million low – income households, in five emerging markets including Colombia, India, Kenya and Sri Lanka over the next five years- the findings of the report demonstrate a number of features unique to mutual and cooperative microinsurers.
Mi-MBA policyholders were shown to have an important role in the governance and management of the organisation (60% of the responses state that the members are involved in the claims approval and settlement process).
Additionally, there was also a high prevalence amongst Mi-MBA’s and CIS’s of offering value-added services, for example 60% of Mi-MBA’s and 100% of CIS’s offered financial literacy training to potential and existing policyholders. Furthermore, 90% of member policyholders of Mi-MBA’s were women according to data compiled by RIMANSI. Findings also showed Mi-MBA’s settling an impressive 88% of claims within 10 days.
Executive Director of RIMANSI, Jun Jay Perez, said, “We are delighted to be able to publish the findings of this report, which highlight the positive outlook for the mutual microinsurance sector in the Philippines. In response, we are pleased to work with the ICMIF Foundation to develop the capacity of the MBA sector. We have already successfully reached out to over 4 million individuals who were previously unprotected with microinsurance as a result of our partnership through the 5-5-5 Strategy.”
