An interagency committee in the Philippines has approved a set of draft standards for how microinsurance products should be marketed and sold as well as a draft for a standardised product structure. The draft now has to be passed on to their Insurance Commission for approval which could happen by the end of this month.
The Philippines has one of the stronger microinsurance markets and has been striving to find a way to make microinsurance accessible, fair and easy to understand by their population.
The standards will govern microinsurance providers in the Philippines. The standards, known as “SEGURO” – for Solvency / Stability, Efficiency, Governance, Understanding of the product, Risk-based capital, and Outreach – will help to ensure microinsurers can meet their claims obligations and are solvent.
A three in one microinsurance product was also approved. This would provide three covers in one simple product which would; pay beneficiaries a set amount in case of a death, pay a set amount for a destroyed house and pay a set amount a business establishment damaged by weather and natural catastrophes.
Standardising microinsurance will help to broaden its reach and ensure it is aimed at the people it is designed to help (and that they can understand it). It will also level the playing field and allow insurers to compete effectively without making it unaffordable for the very people it is supposed to help.