National Microinsurance Forum showcases a thriving microinsurance sector

By CARD-MRI
March 25, 2021

SAN PABLO CITY – More than 20 million Filipinos are enjoying the benefits of mutual microinsurance, providing protection to individuals with low incomes especially through these challenging times.

Insurance Commissioner Atty. Dennis Funa credits microinsurance mutual benefit associations (Mi-MBA) in successfully bringing microinsurance to 26.66 million individuals, reaching 69% of the country’s total insurance outreach. “MBAs have been very effective in providing assistance to millions of beneficiaries in times of crisis,” said Atty. Funa.

In late January 2021, over 400 microinsurance stakeholders joined the National Microinsurance Forum hosted by the Microinsurance MBA Association of the Philippines Inc. (MiMAP, also known as RIMANSI) via Zoom and Facebook Live. With the theme ‘Thriving in the New Normal,’ the forum featured various responses of the local microinsurance sector to provide sustained, timely and appropriate delivery of much needed microinsurance services and support to low-income Filipinos, amid the COVID-19 pandemic and other natural calamities in 2020. Last year, MiMAP members collectively settled 66,847 claims amounting to PhP1.62 billion.

Citi Foundation and Citi Philippines are key partners and supporters of mutual microinsurers in the country. Citi Philippines CEO Aftab Ahmed opened the Forum by calling on participants to adopt an optimistic and proactive outlook in 2021 and beyond.

“You should not be discouraged as we will return to normal. Therefore, it is essential that you stay the course and find a way for your business to survive and grow. You have made sizeable investments in your respective businesses, in terms of time, effort and money, and you should believe in your ability to turn things around,” said Ahmed.

The forum likewise provided an opportunity for government and private sectors to discuss and reflect on lessons learned in 2020. The event highlighted a strong sense of mission among the stakeholders that pushed them to take bold moves, independently and collaboratively, and put in place a business environment conducive for a thriving microinsurance sector.

Setting the Backdrop for Sustained Action and Growth

Proactive government reforms to stimulate economic growth, facilitate social protection and mitigate health risks. From negative growth in 2020, the Philippine economy is projected to recover with a Gross Domestic Product (GDP) growth rate of 6.5 to 7.5% and 8 to 10% in 2021 and 2022, respectively. This positive note was conveyed by Department of Finance Undersecretary Gil Beltran as he outlined the Philippine government’s key reforms and measures to stimulate economic growth while addressing the continuing health risks posed by COVID-19.

Among these measures include making vaccines against COVID-19 available to Filipinos. Department of Health Undersecretary Dr. Maria Rosario Vergeire outlined the key features of the National COVID-19 Vaccine Deployment Plan, wherein vaccination is expected to start in 2021 for identified priority groups with up to 50 million individuals targeted to be covered in year one; and a 100% population vaccination level to bring about ‘herd immunity’ is projected to be reached by 2023.

Reforms in the financial system citing initiatives taken by the Bangko Sentral ng Pilipinas (BSP) have also supported the banking system enabling banks to come out of the 2020 crisis in good financial health. Smith Chua, Chief Investment Officer of BPI Asset Management and Trust Corporation (BPI AMTC) presented the Philippine investment market outlook and further added that while the Philippine yield curve was lower in 2020 than in 2019, it has shown a sustained positive upward track until the end of the year.

As an actively responsive regulatory agency, the Insurance Commission also came out with several measures among which is the issuance of a Circular Letter 2020-29 that classifies MBAs as health insurance providers and part of the health frontline services. This issuance granted MBA employees freedom of mobility to transact business, especially claims settlement, during the enhanced community quarantine (ECQ) period.

Access to technology and network of technology service providers. Concerned about how to sustain timely delivery of services amid the pandemic, Mi-MBAs were quick to explore and adapt to available technologies. Simple, affordable and appropriate technology-driven systems and procedures were used to communicate and continue daily operations of marketing, enrollment of new policy holders, renewal of policies, claims settlement and other member concerns.

CARD MRI through its insurance service providers, CARD MBA, CaMIA and CARD Pioneer Microinsurance Inc., shared how it addressed the challenge of lapsation of 340,000 microinsurance policies in mid-2020. They launched a text blast campaign to send out messages to inform and guide policy holders on decisions and steps, such as policy renewal through a text reply of yes or no.

Drawing Strength from the Core

Community Engagement. Mi-MBAs, also referred to as “mutuals”, draw its strength from mutual sharing, support and responsibility among members, a characteristic best mobilized where there is trust and transparency.

The forum accorded an afternoon’s session to exchange experiences and insights on how membership engagement has been activated and further strengthened. As a variety of strategies emerged, Mi-MBA resource speakers highlighted the value of having a two-way communication facility between members and the Mi-MBA, and between field staff/coordinators and management. This facility has become the means to inform and update members, invite, receive and respond to feedback, submit and exchange documents, and convey mutual support and customer care. Such facility can be as sophisticated as the CARD MBA’s use of a chatbot where member queries and comments can be received and responded to by artificial intelligence, or the simpler text messaging phone line of ASKI MBA, or TSPI MBA’s FB chat groups, or CARE MBA’s e-kumustahan in Zoom.

An effective communication facility has resulted in the members’ enhanced perception of the importance of microinsurance and their membership in the MBA, such as having a dependable safety net to fall back on. This positive perception has in turn increased member satisfaction and support to MBA activities and transactions.

Indeed, by the end of 2020, MiMAP saw its collective membership going up by 5% to 7.2 million members in 2020 from 6.86 million members in 2019; total outreach also increased by 7% from 24.94 million insured individuals in 2019 to 26.71 million in 2020.

Mission-Focused. When it came to the industry’s threats and opportunities, it was clear that the pandemic sparked immediate action among Mi-MBAs. Wired to focus on the mission, a Mi-MBA will do everything in its power to deliver prompt and promised service to a member in need. This commitment drives Mi-MBAs to be innovative, creative and adaptable.

Despite the threat of business losses and closure and thus the large volume of claims, 1 Cooperative Insurance System of the Philippines, Inc. (1CISP) shared that they decided to go ahead and launch its business interruption insurance product in April 2020. 1CISP incurred losses as they had expected but learned a lot and remained hopeful for increased product uptake starting in 2021. CARD MRI in partnership with Pioneer Life also completed the design of a business interruption insurance and are set to pilot as soon as the Insurance Commission completes its review and gives approval on this new product.

Before the pandemic, Mi-MBAs proudly settled claims within a day upon receipt of notice. It was only a few months into the lockdown that many Mi-MBAs were able to settle claims in one day, using a blended approach of technology and manpower resource. Claim documents were sent as e-photos over FB messenger and approved claims were paid via online cash payment facilities. In far-flung areas with limited internet connectivity, staff traveled on motorbikes to provide the needed support in claim processing.

Thriving for Greater Results

The demonstrated ability to thrive in the new normal has energized the sector and further emboldened it to do more. This was reinforced by Asian Development Bank’s (ADB) Principal Financial Sector Specialist, Arup Chatterjee, who cited the Philippines to be a fitting global ambassador for microinsurance during his talk on the state of the Asia-Pacific insurance industry.

“The Philippines can provide valuable lessons to the world through its pool of well-established microinsurance service providers brimming with rich microinsurance experiences and achievement,” said Chatterjee.

The forum has also identified areas where more work awaits. To cite a few, microinsurance penetration is still low as inclusion of other vulnerable groups such as workers from the informal sector have yet to be considered and pursued. More creative community-based risk sharing strategies and new product offerings need to be studied and tested to dispel ‘uninsurability’ of some risks involving certain vulnerable groups and situations. There remain opportunities to tap the full benefits of digital technology and capacity to better understand and serve the market, such as modernizing core systems and use of data analytics.

“The crisis has pushed us to strengthen our capabilities. With our collective response, we have elevated the quality and responsiveness of our services and increased member satisfaction and engagement,” said MiMAP President & KMBA General Manager, Silvida Antiquera. “We shall continue to give our best, break new grounds, and work together to ensure that microinsurance provides a sturdier and wider safety net to more people,” Antiquera added as she expressed MiMAP’s continuing commitment of service to the country, and the world.