PIRA Joins Three Major Insurance Initiatives in 2026

The Philippine Insurers and Reinsurers Association (PIRA) is currently participating in three separate initiatives involving the Bangko Sentral ng Pilipinas (BSP), the Department of Agriculture (DA), and the United Nations Development Programme (UNDP). Each initiative aims to develop new insurance products and frameworks that could expand the role of the private non-life insurance sector in the Philippines.

1. Parametric Insurance Knowledge Exchange with BSP

The BSP invited PIRA to co-present a Knowledge Exchange Activity on parametric insurance for both the banking and insurance sectors. The initiative aims to build broader understanding of parametric products across the Philippine financial system.

What is parametric insurance? Parametric insurance pays out a fixed amount when a measurable event—such as a typhoon reaching a certain wind speed or rainfall crossing a defined level—occurs. Unlike traditional insurance, it does not require a claims assessment. Payment is triggered automatically, making it faster and more predictable.

The BSP sees parametric insurance as relevant to banks because it can serve as a credit risk tool for agricultural and SME loans exposed to climate and weather risks. For the insurance sector, it opens distribution opportunities through bank channels and supports product innovation in climate-linked covers.

The first joint event — a webinar titled "Bundled for Impact: Credit-Linked Parametric Insurance in Practice" — is scheduled on 13 May 2026, 9:00 AM to 12:00 NN. This is the fifth session of the BSP Knowledge Exchange Series on Sustainability. PIRA member companies are contributing speakers and case studies from their own parametric insurance experience.

Registration is open until 11 May 2026 at: https://tinyurl.com/Parametric-Insurance-BSP-IC-KX

2. National Agriculture Insurance Pooling Mechanism

PIRA is participating in the design of a national Agriculture Insurance Pooling Mechanism, a structured arrangement that would allow private insurers to participate in the agriculture insurance market alongside the Philippine Crop Insurance Corporation (PCIC), the state insurer.

The initiative is part of a broader agriculture sector reform program supported by a World Bank Policy-Based Loan to the Philippine Government. The technical working group includes the Department of Agriculture, PCIC, and World Bank agriculture insurance specialists.

The group is currently working on:

• The pool's governance structure and risk-sharing arrangements

• Eligible product types, covering crop, livestock, aquaculture, and multi-peril risks

• Standards for how private insurer products can qualify for and participate in the pool

• A framework linking agriculture insurance to agricultural lending, so banks can use it as a credit risk tool for farm borrowers

The mechanism is intended to address the barriers—adverse selection, catastrophe exposure, and limited distribution reach—that have historically limited private sector participation in agriculture insurance. Member companies with existing agriculture insurance portfolios or interest in the sector are encouraged to contribute input through the PIRA Secretariat.

3. Nature-Based Insurance Consultation with UNDP–BIOFIN

PIRA participated in a consultation workshop convened by UNDP under its Biodiversity Finance Initiative (BIOFIN), exploring the possibility of developing insurance products for natural ecosystems in the Philippines — specifically coral reefs, mangrove forests, and seagrass meadows.

Other participants included the Department of Environment and Natural Resources (DENR), the Insurance Commission (IC), and the Department of Finance (DOF).

Nature-based insurance treats ecosystems as insurable assets. When a qualifying event damages a reef or mangrove belt, a policy pays out funds for ecological restoration. The parametric model is seen as the most practical trigger mechanism, since assessing physical damage in underwater or coastal environments is difficult.

Similar products already exist in other countries. In Mexico, a parametric policy covers the Mesoamerican coral reef, with payouts triggered by named-storm wind speeds and released within days to fund rapid restoration. Pacific island nations have explored comparable covers for mangrove systems.

Key issues discussed at the workshop included how to quantify ecosystem value for insurance purposes, how to assign insurable interest and beneficiary rights, and what regulatory framework the Insurance Commission would need to put in place to authorize such products in the Philippines.

The following steps are expected: follow-on technical sessions with UNDP–BIOFIN, an ecosystem valuation study for priority reef and mangrove sites, and a regulatory review by the Insurance Commission. PIRA will also assess member interest in participating in a pilot product design exercise.

Member companies who wish to learn more or contribute to any of these initiatives may contact the PIRA Secretariat at pira@pirainc.com.ph or call +63 2 811 4587.