By Mr. Edgardo D. Rosario, PIRA Chairman
Good afternoon colleagues in the industry. Thank you for joining this General Membership Meeting. I hope you and your loved ones are all doing well. Ilang tulog na lang Pasko na. I hope you are all excited for the coming holidays.
Special shoutout to those joining us via Zoom. (Look to the camera) We really miss you guys.
As we are about to close another year, it is my honor to present to you this Chairman's Report. I organized it into three parts -- all starting with the letter T -- Tragedy, Transformation, and Triumph. These three words aptly describe what 2022 has been for us.
TRAGEDY
It was December 18 last year when a super typhoon named Odette barreled into the country, wreaking havoc in most of the Visayas. It left more than 400 people dead, making it the second worst natural disaster of the year, next only to the Haiti earthquake that occurred in August that year. It left over 40 billion pesos in damaged infrastructure and agricultural crops.
Odette happened at the worst possible time -- a week before Christmas and at the height of the Covid-19 pandemic marked by a surge in Omicron variant infections. It was like rubbing salt to a festering wound.
This tragedy was repeated 10 months later with Typhoon Paeng. Just as we were all preparing for All Saints' Day, Paeng came with torrential rains and howling winds, leaving a trail of destruction in its path.
Tragedies like Odette and Paeng are reminders of the risks we face as an archipelago in the so-called Typhoon Belt. And tragedies, like dark clouds, have silver linings. In our case, these tragedies often show people how important insurance is.
With news on the response and recovery efforts from government and private entities taking center stage at the aftermath of the typhoons, the public is made aware of the mechanisms already in place that successfully assist those most affected Companies like Microinsurance providers are quick in distributing insurance payouts. Big companies like the Aboitiz Group, respond with their weather-link parametric insurance cover. And farmers get to experience the benefits of being insured under the Philippine Crop Insurance Corporation.
TRANSFORMATION
As the country cannot escape the effects of natural calamities, we can however TRANSFORM how we respond and take measures for lessening its effects and filling in protection gaps for the most vulnerable.
One such measure that we pushed for in collaboration with NatRe, was the finalization of the Philippine Catastrophe Insurance Facility or PCIF, an IC-led initiative aimed to improve the sustainability of catastrophe insurance in the country
After months of collaboration, PCIF 1 is set to be launched by January 1, 2023, applying the Minimum Catastrophe Rates that have been determined, internationally benchmarked, reviewed and approved by the Insurance Commission. This is seen as vital to make sure that insurers have sufficient premium reserves to respond to disasters.
Other transformations in 2022 are the review and revision of the rates for Motor Car insurance and the Compulsory Third Party Liability or CTPL insurance, and the setting up of rates for electric vehicles. These are works in progress and are expected to be finalized in the coming months.
The industry is also being transformed by global regulations, foremost of which is the International Financial Reporting Standards with implementation initially set this year but moved to 2025.
The IFRS17 Impact Assessment Study was completed this year, which gives us an idea on the effects of the accounting standards have on our individual companies. PricewaterhouseCoopers or PwC has submitted its 79-page report which also makes clear the amount of work needed for our companies to be aligned to this new standard. This is another work in progress -- something we expect to finish in the next two years.
Most of our transformation, however, is happening because of technology.
2022 showed us that digitalization is no longer the way of the future, but the order of the present. We have seen digital technology adoption among our member companies at an accelerated pace.
Prior to the pandemic, we could hardly get our members to introduce electronic policies. Suddenly when Covid-19 struck, everybody jumped in. Now, most of our members only issue online policies.
As an Association, digital technology provided us with the means for faster and more frequent collaboration with our regulator, the Insurance Commission. Though I believe face-to-face meetings are still the best, especially in establishing and nurturing relationships, virtual meetings have proven to be a feasible and invaluable alternative. I have a feeling that virtual meetings will be here to stay.
This year, we participated in virtual events like the 2nd Virtual Insurance Summit co-organized by PIRA and the IIAP. This Virtual Insurance Summit focused on Climate Change and drew an impressive attendance online.
We also took part in the 5th Bangko Sentral ng Pilipinas Financial Education Virtual Expo where we partnered with IIAP and Alliedbankers Insurance to have a booth for Insurance Education and to raffle off insurance products as prizes to thousands of attendees.
We also resumed just yesterday our PIRA Campus Tour -- an Online event done via Zoom with a thousand attendees from the Polytechnic University of the Philippines Department of Financial Management.
TRIUMPH
And finally, 2022 in my books, is counts as a year of Triumph.
After more than two years into this pandemic, things are looking positive with restrictions easing and the society as a whole normalizing.
Face to face social activities have resumed and once again we are able to come together and interact on a personal level, building cooperation and camaraderie. Among these activities worth mentioning was the PIRA Golf Tournament in Canlubang, Laguna. We rebranded it the Insurance Commissioner's Cup and it proved to be the most successful of all tournaments we have organized thus far. We could not have done this without the collaboration of the Insurance Commission, the IIAP, and the Philippine Insurers Club or PIC.
After a 2-year hiatus, we resumed celebrating ICW or Insurance Consciousness Week, a project we co-organized with the PIC and IIAP.
And just last week, I, together with our Executive Director Mitch Rellosa, our former Chairman Allan Santos, our Deputy Chair and Fire and Engineering Committee head Denden Tesoro, fellow Trustee and Motor Car Committee chair Art Reyes, IIAP President Ming Jacinto, and IIAP Executive Director Francis Papa were fortunate to be able to attend the ASEAN Insurance Council meetings in Thailand, the first AIC meeting held face-to-face since the pandemic began.
Thailand has given us so much hope for the future as it has already removed all travel restrictions and has made even the wearing of face masks optional. Being there made us feel that this crisis is already about to end.
On the regulatory side, one impactful development is the capitalization build-up program of the government. Finally, on December 31, 2022, we are set to cross the finish line of this 16-year marathon that we fought tooth and nail to stop or delay, at the least.
Based on Insurance Commission reports, 35 out of 56 companies are already compliant with the 1.3 billion pesos requirement. Fifteen (15) companies have net worth exceeding 1 billion pesos and are poised to achieve the 1.3 billion level. The remaining 6 are more or less within the 950 million mark. Hopefully by year-end all the companies will make the cut.
With gratitude to our Maker, our industry remains strong and earmarked for growth amidst the unprecedented challenges. We acknowledge and owe this in great part to our stakeholders.
May I take this time to thank our regulator, led by Commissioner Dennis Funa, for their support to our industry. Commissioner Funa has proven to be an agile leader, whose leadership has led us through difficult times. We were with him in Bangkok last week and we took the opportunity to thank him personally for his legacy of integrity, professionalism, and hard work.
As your chairman for 2022, I will forever be thankful to all of you for your support and commitment to our Association.
To my fellow members of the Board of Trustees, thank you for your selfless dedication.
To our dear member-companies, thank you for trusting us and helping us make important decisions this year.
To our PIRA Secretariat, our ED Mitch Rellosa, our GM Roger Concepcion, and the entire PIRA Team, thank you for your professionalism and hard work.
We still have so many things to do. Our industry's transformation continues as we speak. And as we go through life's alternating cycle of tragedies and triumphs, my prayer is for our hearts to be filled with the passion and willingness to adapt to the times and serve to the best of our abilities.
Thank you everyone for all you've done this year.
I wish you all a meaningful Christmas and a truly prosperous new year!
Maraming maraming salamat.
View the full report here.