The Philippine microinsurance sector is estimated to expand to 16.3 million households (73.3 million Filipinos) by 2020, according to a study on mutual and cooperative microinsurance in the country published by the International Cooperative and Mutual Insurance Federation (ICMIF) and Microinsurance MBA Association of the Philippines, Inc (also known as RIMANSI).
The results of the ICMIF study state that microinsurance coverage expanded from a mere 3.1 million before 2008 to 31.1 million by the end of 2014.
The report, entitled Mutual and Cooperative Microinsurance in the Philippines: A Landscape Study, was conducted as part of the ICMIF 5-5-5 Mutual Microinsurance Strategy. The Strategy aims to provide mutual microinsurance solutions to five million low-income households, in five emerging markets over the next five years. The Philippines is one of the five selected countries, along with Colombia, India, Kenya and Sri Lanka.
The study highlights the potential role that mutual microinsurance can play in closing the protection gap in the Philippines.
There are two types of mutual microinsurance organisations in the Philippines: cooperative insurance societies (CIS) which primarily have an institutional membership; and microinsurance mutual benefit associations (Mi-MBAs) which are not-for-profit organisations with low-income individuals as members. Of the 77% microinsurance market share covered by mutual microinsurance, Mi-MBAs comprise around 51% and CISs comprise around 26%.
Further findings from the report demonstrate some of the features unique to mutual and cooperative microinsurers, which are:
- Mi-MBA policyholders have an important role in governance and management of the organisation (60% of the responses state that the members are involved in the claims approval and settlement process)
- There was also a high prevalence amongst Mi-MBAs and CISs of offering value-added services, for example, 60% of Mi-MBAs and 100% of CISs offered financial literacy training to potential and existing policyholders
- 90% of member policyholders of Mi-MBAs were women according to data compiled by RIMANSI
- Mi-MBAs settled an impressive 88% of claims within 10 days.
With its global headquarters in the UK and regional offices in Washington DC, USA; Tokyo, Japan and Brussels, Belgium, ICMIF represents 220+ values-based insurers in 70 countries with over $250 billion in premium income and $1.6 trillion in total assets held. ICMIF is also active in the microinsurance and takaful sectors