News & Stories

Championing Microinsurance in Typhoon-ravaged Philippines

The devastation that typhoon Haiyan wrought in the central region of the Philippines in early November is beyond belief. Nothing could have braced the more than 10 million affected Filipinos for the force and reach of the destruction. Indeed the typhoon has underscored the helplessness of man against nature, but it has also emphasized the importance of financial risk protection amidst the growing unpredictability of climactic disasters. Typhoon Haiyan has reinforced the case for microinsurance.

In the Philippines, the Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ) has been a strong contributor to microinsurance growth. Together with the Insurance Commission and the Department of Finance, GIZ implemented the Microinsurance Innovations Program for Social Security from 2009 – 2012 to enhance the regulatory environment of the sector which would spur innovative product developments and utlizie public-private partnerships financial literacy campaigns. Continuing these first initiatives is the regional program Regulatory Framework Promotion of Pro-poor Insurance Markets (RFPI Asia) which will showcase the Philippine microinsurance experience in selected Asian countries, hoping the replication of the good practices by other insurance regulatory authorities.

In the aftermath of typhoon Haiyan, GIZ partners are showcasing microinsurance in action. Even with their respective distribution points and personnel affected by the typhoon, these organizations are championing microinsurance.

Beyond the promise of microinsurance

Cebuana Lhuillier Insurance Solutions (CLIS) is the country’s largest network of pawnshops and remittance pick up centers, with more than 1,500 branches nationwide offering its microinsurance product, Alagang Cebuana Plus (ACP). At 25 pesos (USD.26 cents for a four-month coverage, clients can claim personal accident benefits of up to PhP20,000 (USD 460) and up to PhP5,000 (USD 115) cash aid for fire victims.

Calamities such as typhoons, however, are exclusions of ACP. Still, CLIS is bent on providing cash assistance to its clients affected by typhoon Haiyan as a sign of solidarity. CLIS also implemented this same practice in 2012, giving out cash assistance to more than 130 households displaced by floods in the Southern part of the country.

CLIS branches and personnel have also been badly affected by the recent supertyphoon. Still, to prove itself as a credible microinsurance partner, the committed personnel will be working with colleagues coming in from outside the region to dispatch Mobile Claims Kiosks and grant financial assistance to the victims. The deployment of CLIS Microinsurance-on-Wheels vans will also be intensified to support the operations and further increase awareness on microinsurance.

Climate-induced catastrophes are now an urgent agenda for innovations in insurance solutions, especially those that are accessible to the low-income sector. Cooperation between insurance regulators, providers and distributors is crucial for these solutions and GIZ RFPI Asia aims to catalyze cooperation throughout Asia.

In solidarity with partners

Pioneer Insurance is one of the first accredited microinsurance providers in the Philippines. It partners with different institutions and organizations as its microinsurance distribution channels.

Offering microinsurance programs that are comprised of life and non-life components, Pioneer works closely with its partner organizations to design products that are affordable and that meet the specific needs of their members. In the typhoon-affected regions, Pioneer underwrites the risk for more than 14 partner organizations with an estimated 30,000 clients affected.

As is to be expected, the recent typhoon will place stress on the partner organizations due to the onslaught of claims to be processed. Pioneer, emphatic of the value of after-sales services, has a dedicated Claims Team that is set to travel from its central Manila office to the typhoon affected provinces to help in speeding up claims processing.

Pioneer hopes to expedite the claims of as many typhoon victims as possible. The benefits are expected to provide the victims with the cash that is necessary to help them rebuild their lives.

**Image source: Copernicus: European Earth Observation Programme