The Insurance Commission (IC) of the Philippines is reportedly in talks with private sector re/insurers regarding the introduction of mandatory catastrophe insurance protection for private assets, according to Business Mirror.
The regulator has signed a memorandum of understanding (MoU) with the Philippine Insurers and Reinsurance Association (PIRA) and National Reinsurance Corp. of the Philippines (NatRe) to come up with a catastrophe insurance facility.
The facility could be used to cover damage to properties caused by perils such as typhoons, flooding and earthquakes, and could potentially be larger than the planned one trillion pesos (US $19.6 billion) insurance scheme to cover government assets.
PIRA’ Executive Director, Michael F. Rellosa, said the facility would allow the re/insurance industry in the country to further grow its premium base and spread risk among companies.
However, he added that significant reinsurance protection would still be provided for the program by international firms.
Insurance Commissioner Dennis B. Funa explained that the facility would consist of a pool of non-life insurance with reinsurance to be provided by NatRe.
“We want our target crowd to appreciate the importance of property insurance as a risk transfer mechanism in the event of disaster,” Funa was quoted as saying. “And in a country such as ours that is best by a host of disasters, the desired output of the MOU is a most welcome development.”
“The problem here with the private sector, if it’s not compulsory, mandatory; the ordinary citizens will not buy insurance voluntarily, so that’s the missing link,” Funa continued.
