By Francisco D. Papa Jr. JUST as we were in such high spirits with the active cases of Covid-19 at their lowest and seemingly under control, nature has once again dealt the Philippines a serious blow. Super Typhoon "Odette" (international name "Rai") entered the country on Dec. 18, 2021 and ravaged southern Philippines, inflicting heavy damage on Cebu, Palawan and Roxas City and decimating the islands of Siargao and Dinagat. The typhoon made landfall multiple times and displaced hundreds of thousands from their homes, killing more than 300 and affecting millions of Filipinos. The scale of the losses as of this writing is still difficult to ascertain as many areas are still cut off from any communication and remain isolated. The Category 5 typhoon could not have struck at the worst time with only a few more days before the Christmas holidays. After seeing the initial images of the devastation in the wake of Typhoon "Odette" in the local news, grim memories of Typhoon "Yolanda" (international name: "Haiyan"), the Category 5 typhoon that also hit the Visayas region almost 10 years ago, comes to mind. Insurance companies then mobilized and dispatched their claims representatives and adjusters, albeit at great struggle, to the hardest-hit cities like Tacloban. It appears that the insurance industry will have to go the extra mile once more to help the victims of Typhoon Odette and step up the processing of insurance claims of those fortunate enough to carry typhoon insurance. For these individuals and establishments, the burden to recover will be eased. Typhoon insurance is an add-on coverage to a fire insurance policy. In practice, it is taken together with flood insurance and other "acts of nature" like earthquakes, volcanic eruption and other convulsions of nature. Therefore, for typhoon losses to be covered, the insured need to pay additional premiums to cover this added exposure. It is not uncommon for insurance policies to sometimes miss out on the inclusion of typhoon and acts of nature cover because the basic fire insurance policy actually excludes convulsions of nature. Nevertheless, once the extra premiums are paid, the basic fire policy may be extended to include these perils. Typhoon insurance claims are relatively more difficult to process compared to motor car claims, which is pretty straightforward. There are many documents required to substantiate a typhoon claim. It is a much longer process and an insurance company normally has to appoint an independent insurance adjuster to help them with the documentation and the ascertainment of the actual loss. It is for this reason that catastrophic events like Ondoy, Yolanda and Odette always take a herculean effort from the insurance industry to service the many claims that follow. Fortunately, in the case of Typhoon Odette, the office of the Insurance Commissioner is front and center as Commissioner Dennis Funa has issued IC Circular 2021-71 to help manage typhoon-related claims. In the circular, the commission has requested for the relaxation of existing "company procedures and mechanisms" to facilitate claims processing, as well as policies related to claims notification and completion of claims requirements. This can mean that Odette victims may dispense with traditional documentary proofs of the damage and professional adjustment. It is now up to the insurance companies to do their part and deliver on their promise to their insured to settle claims the quickest way possible. After a destructive typhoon, insurance companies employ different strategies to manage the expected increase in typhoon claims that will be filed by their insured. Insurers, of course, would like to be able to attend to each claim with dispatch. So, insurers sometimes enter into special agreements with insurance adjusters and salvors containing pre-arranged engagements after a disastrous typhoon. This is done to facilitate response time to their clients. In the aftermath of a typhoon, it is the practice for insurers to communicate with their insured and insurance intermediaries to inquire if their clients' properties sustained typhoon damage. Insurance agents and brokers, being representatives of insurers and clients, have a key role to play in a claim as well. Familiarity with the terms and conditions of the insurance policy along with the insured properties may do much in expediting the claims process. "All hands on deck" is the call to help the typhoon victims... and surely the insurance industry is there to answer! Francisco D. Papa Jr. is an AB Economics graduate of the Ateneo de Manila University and has more than 30 years of experience in the nonlife insurance sector. Source: manilatimes.net

By Herminia S. Jacinto DURING this period of uncertainty, what comes to mind is protection — protection of lives and property. Protection is synonymous with insurance. Suddenly, we became more concerned whether we have provided for this fortuitous event — the pandemic. This is one time when we look for the person who can best serve our needs — the insurance agent. Talking to one is very reassuring since he or she is well trained in describing the products or coverage that one needs. They can come up with plans that suit the client's requirements for protection and investments. These agents are trained very well by the companies they represent and have to be licensed by the Insurance Commission (IC) before they can sell insurance. They are trained how to address the physical, health and other concerns of their clients. Nowadays, they also have to be well versed in the various types of investments that are usually sold with the life insurance plans. The nonlife insurance agents or agents who specialize in property and casualty lines are similarly trained and licensed by the IC. There are many lines of business for which they have to be trained: fire, marine, motor, surety, personal accident and many more. Where do these agents get the training? Insurance companies have their own training departments. Having a training department or full-time trainers is the ideal situation in insurance companies. They will be in charge of training not only their producers but also their employees. New employees have to learn about the intricacies of insurance in place while already working in the company. There are no dedicated courses in college for the study of insurance or at least feature insurance as a major subject. Much as i nsurance companies would like to hire employees who can "hit the ground running," there are not many of these available. Training starts in the company. And there are so many subjects to be learned! The Philippines is fortunate to have the Insurance Institute for Asia and the Pacific, more popularly known as IIAP. The IIAP, created by presidential decree in 1974, was formerly known as the Asian Insurance Institute. Courses offered in the IIAP range from the basic ones on life insurance, property insurance and micro-insurance. Advance courses like reinsurance, sabotage and terrorism, and other specialized subjects, which in the past were offered by foreign training institutes are only now regularly held in the institute. Claims, or claims handling, which is the test of the insurance companies' efficient and fast service to policyholders, is offered by the institute for all the lines of insurance. A good after-sales service, which claims settlement should be the ultimate goal of an insurance company. The insurance companies are constantly on the look-out for young and inspired employees but it is known that the young graduates are not attracted to insurance as a career. They prefer to apply with the banks, marketing and, recently, technology companies. We go to the campuses every year to hold symposia to introduce insurance hoping that we can attract them to join the insurance industry. The IIAP has a program called "Suits" for Select Universities Insurance Training Scholarship. It is a two-month intensive training in life and nonlife insurance, which a young graduate would need to be hired as a junior executive in an insurance company. All expenses are paid for by the institute to be reimbursed by the companies, which eventually hire them. Insurance being a global business, the industry has to be constantly abreast with foreign courses. IIAP has tie-ups or partnerships with foreign institutions and organizations such as the Chartered Insurance Institute, the International Labor Organization and other Asean institutes of learning for the exchange of courses and or faculty. An important part of the training of insurance professionals is the attendance of conferences both local and overseas. Companies have plans and budgets for these conferences, which provide interaction with other insurance players, learning from them in the process! The joke goes that if you want to see the world, join the insurance industry! It is not a joke after all. It has been done and will be back when travel becomes safe and easy. Source: manilatimes.net

By Herminia S. Jacinto IN the last few days, we have had a series of good news. The new cases of Covid-19 being reported have gone down to below the 5,000 level. The Department of Health reports that hospital beds, especially the ICUs (intensive care units), are not in full capacity. Face-to-face classes are being resumed in selected areas to the delight of our students. Travelers are allowed to enter the country without requiring quarantine in hotels and other facilities. This is really good news for our OFWs (overseas Filipino workers). They will not lose five days (used to be eight days) of their vacation and will not incur extra cost for the hotel quarantine stay. Restaurants, tourist places and shopping malls are now experiencing increased patronage as people adjust to the safety protocols. Business is expected to perk up some more in the coming months as the alert levels are relaxed. The insurance industry, both life and property and casualty, will be directly benefited by this improvement. There will be jobs again; thus, increasing the funds available to purchase insurance protection. The Insurance Commission reports that premium income from the life sector increased by 64 percent to P278.7 billion in the third quarter of 2021. In the same period, insurance penetration grew by a high 2.09 percent as compared to the average of 1.5 percent from year 2017. Insurance penetration is considered as the indicator of insurance development in a country and is calculated as the ratio of insurance premiums to the gross domestic product of a country. The industry players anticipate a more enhanced growth in business as people become more aware of insurance protection and the availability of products that cover losses on Covid-19. The companies are more than ready for the anticipated growth with an inspired sales force and efficient administration structure. The property and casualty sector, or the non-life sector as it is more popularly known locally, experienced growth also but not as much as the life business. Non-life insurance is very sensitive to the movement of the economy and the business sector. While coverages for fire and allied perils were maintained, there was a big reduction in inventories, imports and exports. Business activity was virtually paralyzed at some point during the last two years and this has resulted in less demand for insurance. Travel and tourism — which require a lot of insurance covers — were at their lowest levels, resulting in very low premium income from this source. The non-life sector is quite excited with the positive developments in the health condition of the country so business can resume and get back with vengeance, as they say. The borders have been opened and business activity is expected to peak again. The companies are more than ready to meet the demand for insurance. Their financial condition has been beefed up with an increase in the net worth in 2020 and the good results in operations in both 2020 and 2021. Growth will be slow approximating the movement of business so this is a good time for the insurance companies to help their clients how to secure the best protection for their properties with the minimum cost. During the pandemic, we saw more small and medium enterprises which did business from home. We saw the proliferation of delivery couriers which moved the products, mostly food, from the producer to the consumer! Maybe insurance can create a cover for this new way of doing business. There is no limit to the creativity that can be done by the insurance providers, both life and non-life, to respond to the current needs of their clients, especially now that buying power has increased. There continues to be a need for good insurance education and awareness, which should be provided by the insurance provider, the insurance company. In addition to their sales force, the companies should train additional personnel to respond to the needs of their prospective clients. The events that passed should challenge our industry to grow better and faster as we provide our people the best service and products ever. A strong insurance industry provides not only protection but resources for the country's development in the form of investments. Source: manilatimes.net

RMN DZXL 558 MANILA: ANG TINIG KLIMA WITH IC DEPUTY COMMISSIONER ERICKSON BALMES AND PIRA EXECUTIVE DIRECTOR MICHAEL RELLOSA Press release Please catch PIRA Executive Director Mr. Mitch Rellosa as one of the guest speakers to the DENR 's weekly radio program Ang Tinig Klima. They will talk about “Risk Insurance and Climate Change.” The program will be simultaneously aired over DZXL, 558 RMN radio station. It is also be live-streamed through DZXL and DENR CCS Facebook, this coming October 15 from 3:00 pm to 5:00 pm.

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State-run Philippine Crop Insurance Corp. (PCIC) has entered into its first-ever agreement with a private firm to insure farmers and their yields and reduce its risk exposure that could result in its financial collapse. The PCIC signed a co-insurance deal with CARD Pioneer Microinsurance (CPMI) to share the risks underwritten for each insurance policy at a ratio of 70:30, reported The Philippine Star. Under the arrangement, CPMI will serve as the lead insurer, while the PCIC will stand in as the co-insurer, as the private entity will market PCIC's insurance plans to farmers. Under the agreement, PCIC will also provide technical support to CPMI on actuarial matters, claims management, policy administration and risk underwriting. The microinsurance firm will focus on insuring high-value crops in select provinces where the PCIC has failed to expand its coverage to. As such, the agreement is seen to benefit farmers in far-flung areas who require insurance money to rebuild in times of calamity. Insurance Commissioner Dennis Funa said he expects the public-private partnership to contribute to the government’s target to raise insurance coverage among farmers in the countryside. Protection gap in agriculture Mr Funa said, “In past years, the PCIC has solely provided multi-peril crop insurance for various types of agricultural commodities and the government has subsidised insurance premiums to the benefit of small farmers in the country. “Despite this, insurance coverage among farmers in the Philippines is still low. Clearly, there is a need to address the protection gap in the agricultural sector, considering its exposure to severe and frequent disasters.” Finance officials have previously flagged the PCIC for its impending collapse due to its reliance on state subsidies in pursuing its mandate. Source: asiainsurancereview.com

The Insurance Commission (IC) has released baseline guidelines for insurers and mutual benefit associations for carrying out takaful or Islamic insurance undertakings. The guidelines took effect immediately on the publication of a circular on takaful which was dated 27 January 2022. Hitherto, there had been no regulatory framework for Islamic insurance in the Philippines. The circular says that the guidelines shall apply to all existing and authorised insurance companies and mutual benefit associations that will set up takaful windows. Insurance Commissioner Dennis Funa said in the circular, "The takaful operator shall have in place an appropriate mechanism for obtaining rulings from Shariah scholars, applying fatwa and monitoring Shariah compliance in all aspects of its products, operations and activities." A complete governance policy framework, which outlines the strategic duties and tasks of each organ of governance, as well as procedures for balancing stakeholder accountability, must also be established by an operator. The IC notes that lslamic finance is a rapidly growing segment of internalional finance, which when expanded in the Philippine setting, may attract funds from lslamic investors looking for opportunities to support social and infrastructure requirements in the country. The regulator adds that it recognises the need to provide broader insurance coverage and options for all Filipinos, especially the Muslim community. Takaful is a budding area that the insurance sector can explore in light of the implementation of the Updated Philippine Development Plan (PDP) 2017-2022 that identifies the need for a resilient and inclusive financial sector and lays down, as one of the strategies, the development of legal infrastructure for lslamic banking and finance, the IC says. Source: meinsurancereview.com