By Rizal Raoul Reyes
British life insurer Pru Like UK, in partnership with German development agency GIZ and CommLinked, launched on May 23 ?the Micro-insurance distribution through online communities (MicroComm),? a program aimed at boosting the coverage of micro insurance for the marginalized sector in the Philippines.GIZ and embark on the noble mission of reaching out to the less privileged members of our country,? said Pru Life UK president and chief executive officer Antonio De Rosas during the launch held in Makati City.
?Pru Life UK carries this commitment of advocating financial literacy whenever we launch products, and we are nothing but elated to be directly working with the communities this time to convey knowledge on protection and savings especially to the industry?s untapped market,? de Roxas added.
The project will distribute micro-insurance products to the rural communities of GIZ in the Philippines through online community portals developed by CommLinked.
Moreover, the GIZ communities will be provided financial literacy advocacy materials with the target of creating protection and savings knowledge at the barangay level.
According to a market and product development study conducted in 2017 by GIZ, headed by GIZ program director Dr. Antonis Malagardis, many people in selected communities in Tacloban and Butuan cities are serious in seeking coverage on their and their family’s health or after death, with 57% of the 300 respondents saying they are very open to getting an insurance policy in the future.
However, for most, knowledge on insurance is quite low, with source of awareness coming from word of mouth, and the biggest barrier of getting on is to pay monthly premiums which may be out of their budget. Tied with the risk of financial exposure being an issue to them, it follows that financial activities are not yet strong online.
In response to the problem, GIZ collaborated with Pru Life UK and CommLinked with the aim to utilize technology in addressing financial literacy and providing low-cost life insurance products to the members of the low-income sector, ultimately reducing the protection gap in the country.
This initiative supports the issuance of the Insurance Commission Circular Letter 2015-54, the Adoption and lmplementation of Enhanced Micro-insurance Regulatory Framework.
It is designed to maximize the Filipinos use of online services estimated at 35 million users in mid-2014 and projected to grow to 70 million by 2018, according to the Internet and Mobile Marketing Association of the Philippines. It will also add value to various sectors and groups through the enhancement of business systems using online technology.
According to the Swiss Re Mortality Protection Gap Asia Pacific 2015 report, the Philippines has a $370-billion mortality protection gap which translates to about P600 billion worth of premiums annually.
?The $370 billion is the coverage that Filipinos should have but don?t have yet, and the P600 billion worth of premiums annually could have helped the insurance industry grow five times,? said De Rosas.