The Government of the Philippines has failed to secure reinsurance protection in a recent bid to protect state assets and infrastructure from natural catastrophes, according to reports from The Philippine Daily Inquirer.
National Treasurer Rosalia de Leon told the Inquirer there was a “failed bidding” for the insurance program of the state-run Government Service Insurance System (GSIS).
Earlier this month our sister website, Artemis, reported that the Philippines had entered into a 1 trillion pesos (US $19.6 billion) insurance cover with GSIS, which had subsequently put out to tender the reinsurance of the program.
GSIS had been seeking a one-year source of indemnity to cover largely catastrophe exposures, as well as some other property risks.
The contract, which would have covered a one-year period starting December 19, 2019, allowed interested reinsurers to submit bids until December 11.
The so-called National Indemnity Insurance Program was hoped to provide the government with insurance covering a range of state assets, including schools, roads and bridges, across parts of its eastern seaboard.
Included under the program were roads and bridges across 25 named provinces of the Philippines, as well as schools in 32 provinces, cities or municipalities.
Assets would have been insured against damages from fire, lightning and natural catastrophe events including typhoons, floods, earthquakes, volcanic eruptions and storm surges.
For the Philippines, this latest protection would have greatly extended the disaster coverage it already has in place, following the issuance of the country’s first catastrophe bond in November 2019.
“The reinsurance broker shall structure an indemnity insurance policy and secure reinsurance placement,” stated bid documents from the new program.
“The indemnity insurance policy shall be backed by catastrophe modeling and risk analysis for the government’s strategically important assets.”
“The reinsurance broker shall also help in accessing the reinsurance market, secure the best reinsurance arrangement and rate, and ensure prompt claims handling and settlement and loss recoveries from the reinsurer for the national government’s strategically important assets and its subsequent reinsurance.”
