The health maintenance organisation (HMO) sector in the Philippines chalked up losses of PHP4.269bn ($75m) in 2023, nearly triple the losses of PHP1.433bn in 2022, due to a substantial increase in claims and benefits paid, says a report released by WTW, a leading global advisory, broking and solutions company. WTW, in its Global Medical Trends Survey  report, states that medical claims frequency has significantly rebounded, now surpassing the pre-pandemic levels of 2019, with the cost per claim rising primarily due to higher costs of medical services and procedures. In response to the increased losses, the HMO sector has adjusted its pricing assumptions annually to address the continuous increase in utilization trends, with 15% to 18% medical inflation assumptions over the past three years. Factors affecting medical inflation include rising hospital and clinic costs, increased professional fees and a higher frequency of diseases. Although reports indicate that HMOs are recovering in the first half of 2024, ongoing negotiations between two HMO associations and various doctor groups regarding a potential 80% to 150% increase in professional fees are still driving the projected double-digit medical inflation for 2025. Philippines - Medical cost trend (%) Source: asiainsurancereview.com

The Agriculture and Rural Development has drawn up plans to revamp agricultural insurance in the country from the central down to the local level, according to Mr Le Minh Hoan who heads the ministry. He said that drastic action is needed after Typhoon Yagi in September 2024, the most powerful typhoon to lash Vietnam in the last 30 years, according to local media reports. Mr Le said, "Never before have we seen the need for agricultural insurance as we did after Typhoon Yagi. After the storm, we must restructure the entire agricultural infrastructure system for sustainable adaptation." This applies to aquaculture, crop cultivation, livestock farming, for all of which new standards and regulations must be drawn up to mitigate the impact of natural disasters and catastrophic shocks. Vietnam has experienced in the past 30 years, Currently, agricultural insurance in Vietnam has been small in scale for many years despite financial subsidies from the state. Since 2019, the proportion of agricultural insurance premiums in the non-life insurance market has been very low, standing at 0.06-0.1%. Statistics from Bao Minh Joint Stock Corporation, a pioneer of agricultural insurance in Vietnam, show that around 90% of farmers and cooperatives currently do not have access to agricultural insurance. In 2023, the insurance premium revenue of the agricultural insurance branch was VND42.6bn ($1.7bn), accounting for 0.06% of the total insurance premium revenue of non-life insurance companies. Challenges The challenges faced in expanding agricultural insurance coverage in Vietnam include: Agricultural insurance is still a complicated branch of insurance not only for farmers but also for policy enforcement officials at the grassroots level; implementation in some localities and establishments is still confusing. Awareness of agricultural insurance among farmers is still limited. Without reinsurers’ support, domestic insurance companies do not have enough financial capacity to pay agricultural insurance claims. Insurers must spend a lot of time researching, developing products and negotiating with international reinsurers. Farmers need to implement domestic and international farming and breeding techniques to convince international reinsurers to offer coverage. Mr Nguyen Anh Tuan, vice president of the Vietnam Insurance Association, said, “Vietnam’s agricultural production is spread across the country and is heavily affected by storms, so foreign reinsurance companies often consider carefully before participating in reinsurance in Vietnam.” Not many insurance companies currently participate in implementing agricultural insurance support policies because of risks in agriculture, especially major natural disaster risks. Mr Ngo Viet Trung, director of the Department of Insurance Management and Supervision of the Ministry of Finance, said that currently, 19 out of 32 non-life insurance companies are licensed to offer agricultural insurance services. Mr Do Minh Hoang, a member of the board of directors of Agricultural Bank Insurance (ABIC) says that agricultural production in Vietnam has not yet taken on commodity production model. The supply chain from suppliers, processors, warehouse operators, and distributors, to exporters, etc, is still fragmented. This holds back the development of agricultural insurance. Proposals are that agricultural insurance plans should be tailored for the smallholder as well as large-scale producers. Source: asiainsurancereview.com

Just recently, the Supreme Court made public a 2023 ruling which pointed out that the use of online chat logs and videos as evidence does not violate the right to privacy. In a decision promulgated Oct. 9, 2023 but made public only last week, the SC upheld the conviction of a man for qualified trafficking and rejected accused’s argument that his recorded chat logs and videos were inadmissible as evidence. The High Tribunal held that Republic Act 10173 or the Data Privacy Act (DPA) of 2012 allows the processing of sensitive personal information when it is related to determining criminal liability of a data subject and when necessary for the protection of lawful rights and interests in court proceedings. According to a news report, the case stemmed from an investigation by the Anti-Human Trafficking Task Force of Region 7 in 2013 following a tip from the US Immigration and Customs Enforcement (US ICE). A decoy account was used by a police officer to communicate with Eul Vincent Rodriguez on various platforms and to record their exchanges. During the trial, Rodriguez argued that his right to due process was violated when the chat logs and videos of his conversation with the police were presented as these were not related to the incident alleged in the information filed against him, and that these pieces of evidence were an intrusion of his constitutional right to privacy of communication and in violation of RA 4200 or the Anti Wiretapping Act. In upholding the rulings of the Regional Trial Court and the Court of Appeals, the SC explained that the videos and chat logs were not offered to prove the existence of qualified trafficking but to demonstrate Rodriguez’s modus operandi in contacting foreigners via Skype or Facebook and offering minors for sexual exploitation. In the earlier case of People vs Cadajas, the SC rejected the accused’s argument that the photographs and conversations in the FB messages between him and the minor victim cannot be used against him. Here, the SC held that the DPA allows the processing of data and sensitive personal information when it relates to the determination of criminal liability of a data subject and when necessary for the protection of lawful rights and interests of persons in court proceedings, as in this case where the communications and photos sought to be excluded were submitted in evidence to establish the victim’s legal claims. In the same case, it was held that where private individuals are involved, for which their relationship is governed by the Civil Code, the admissibility of an evidence cannot be determined by the provisions of the Bill of Rights. But what if a private individual uses screenshots of messages and photos posted on messaging apps of another without the latter’s permission, not in relation to a court proceeding but to make such messages and photos known to the public to the prejudice of the data subject? Does the Data Privacy Act apply or was there any other law violated? In an advisory opinion in 2020, the National Privacy Commission (NPC) explained that the processing, i.e. taking screenshots of private conversations between two individuals without the consent of both parties and then sending them out to a third person, will online come under the scope of the DPA if personal data is involved – if the conversation/screenshot itself allows for the identification of the parties. If it is simply the content of the conversation, with names and other identifiers redacted or cropped out of the screenshot, it might not be within the scope of the DPA. The NPC said that disclosure of a private conversation involving personal data without consent of the parties involved, or without some other lawful basis for processing of personal data under the DPA, may be construed as unauthorized processing, depending on other attendant circumstances as when processing was done by the person in connection with his or her personal, family, or household affairs in which case the person is not considered as a personal information controller and hence, to a certain extent, such processing is generally excluded from the scope of the DPA. And last January, the same government agency reminded the public of the need for responsible sharing of photos and videos containing personal data, since unlawful processing of such data is a violation of the DPA with corresponding administrative fines and criminal penalties. Then there is the Civil Code which provides for civil liability for damages to a person’s dignity, reputation or privacy. There is another law, RA 10175 or the Cybercrime Prevention Act which deals with offenses committed online, including the unauthorized sharing of private content. The law provides for the acts that would constitute the offense of cybercrime, including content-related offenses such as libel committed through a computer system or any other similar means. All crimes defined and penalized by the Revised Penal Code, including libel, if committed by, through and with the use of information and communications technologies, will be imposed a penalty one degree higher than that provided for by the RPC. In one case, the SC held that even if the name of the person is not indicated in the post, the owner of the post is still liable so long as other persons who read the libelous post can identify the person/s alluded to. Source: philstar.com

PIRA accepts this certificate on behalf of its member companies, all of who embody a commitment towards building a resilient Philippines. Thank you ARISE Philippines, for the opportunity to collaborate.

The outlook for the APAC insurance sector in 2025 is maintained as "Neutral', supported by stable operating margins and strong solvency buffers, says Fitch Ratings. In the report, titled "APAC Insurance Outlook 2025”, Fitch says that life insurers are aiming for quality growth and solvency through cautious investment strategies, while non-life insurers focus on efficiency and expense control.Insurers in various markets are preparing for new solvency regulations, supported by ongoing capital-raising activity, including debt issuance. Fitch expects a stable performance despite challenges from lower investment yields and regulatory changes. Non-life insurers will benefit from premium rate hikes, although risks from extreme weather and rising reinsurance costs pose risks to earnings and capital. Life insurers will continue to seek product profitability amid evolving regulations. The sector will navigate challenges such as investment volatility, regulatory changes, and catastrophe claims through proactive measures in underwriting efficiency, capital management, and dynamic asset-liability management. Economic growth and regulatory measures will drive steady growth, with insurers focusing on higher-margin products and rate increases to manage rising claim costs. Overall, the APAC insurance sector is poised to manage the anticipated challenges effectively. The focus remains on maintaining a stable performance through efficient operations and strong capital management. Regulatory changes, extreme weather activity, and investment-market volatility are key factors influencing the outlook, but the sector's robust capital position and strategic initiatives will support stability and growth. Source: asiainsurancereview.com

Bank Negara Malaysia (BNM) requires insurers and takaful operators (ITOs) to review their current repricing strategies following concerns raised by policyholders regarding recent increases in the premiums of medical and health insurance and takaful (MHIT) products. In a statement, BNM says that this includes managing increases in premiums/contributions over time, taking into account the impact on policy owners/takaful participants. In addition, ITOs are required to offer viable options for policy owners/takaful participants who are significantly impacted by the higher premiums/contributions to continue having insurance/takaful coverage. ITOs must also ensure the options provided are meaningful and provide additional measures to support affected policy owners/takaful participants. The newspaper Utusan Malaysia  recently reported that medical insurance premiums are expected to rise by 40-70% next year. Insurance industry initiatives Addressing the concerns, the Life Insurance Association of Malaysia (LIAM), the Malaysian Takaful Association (MTA) and Persatuan Insurans Am Malaysia (PIAM) say in a joint statement, that they are committed to, among other things: Staggering repricing adjustments to manage impact on customers; Establishing a dedicated hotline for each company and relief program to ensure ease of access to policyholders: Offering flexible premium/contribution payment plans to affected policyholders; Offering options for different protection plans at comparatively lower or the same premium/contribution; and Implementing effective redress mechanisms, including dedicated communication channels for affected customers. Further details on the measures will be announced soon. The associations also welcome the recent announcement by the Association of Private Hospitals Malaysia (APHM) on establishing a cost containment unit to manage healthcare costs. This initiative seeks to ensure healthcare services remain affordable while maintaining high standards of care. The industry is also supportive of the Health Minister’s call for a value-based healthcare delivery system. In addition, the introduction of co-payment options in September this year offers a solution aimed at reducing premiums by sharing medical costs with policyholders and encouraging more mindful healthcare usage in the long term. The industry says it continues to engage with BNM to manage healthcare costs. Rising claims and medical inflation Explaining the premium hikes, the associations said, “Over the period of 2021 to 2023, the insurance and takaful industry experienced an unprecedented cumulative medical claims cost inflation rate of 56%. This surge, driven by various factors such as the rising costs of medical treatment, advanced healthcare technologies, and increased utilisation of healthcare services, has made premium repricing an unavoidable measure.” They added, “Although insurers and takaful operators have different repricing cycles, they typically review and adjust premiums every three years to ensure the sustainability of medical insurance plans. The accumulated impact of claims inflation has resulted in upward premium adjustments.” Source: asiainsurancereview.com

October 16-21, 2022 | Various With its theme, Navigating the Road to the New Normal, Insurance Consciousness week 2022, began with a pre-launch activity with friends from the industry, joining a public rosary crusade held at a park in Makati City. On Day 1 and with the formal start of ICW, a holy mass was celebrated, part in thanks for the past blessings and successes received by the industry and in supplication for guidance for the future. Fr. Douglas, in his sermon, spoke how insurance ensures protection for our worldly possessions, as the practice of our faith ensures protection for our souls. The much-awaited salu-salo followed right after the mass, starting with the usual speeches from heads of the organizing associations: the Philippine Insurance Club or PIC, the Insurance Institute for Asia and the Pacific or IIAP and of course, the Philippine Insurers and Reinsurers Association or PIRA.A common message resonated among the speakers with resounding optimism: the insurance industry will embrace and adapt to change to sustain its growth and fulfill its role to society. Day 2 saw the first of the free webinars for ICW. Dr. Zeno Udani shared an inspiring talk on Gratitude and Grateful Leadership. Day 3 was an open invitation to the ongoing Philippine Fintech Festival, with special focus on innovative insurance solutions using technology. Top insurance leaders from the private sector and govt were among the guest speakers for the event. Day 4 offered another free webinar held in collaboration with members of Arise Philippines on the Importance of Insurance in the light of Climate Change. Mitch Rellosa and Melinda Natividad engaged over 100 attendees on the alarming effects of climate change and the role of insurance in risk mitigation and protection.Capping the 5th day was a webinar with Sandy Reyes expounding on the need and benefits of Cyber Insurance which will soon be available in the local market.

The Insurance Commission (IC) has updated guidelines for investments in infrastructure projects under the Philippine Development Plan (PDP). The new Circular Letter (CL), approved on 14 November 2024, provides a framework for infrastructure investments that an insurance or professional reinsurance company may undertake. These allowable investments factor in the determination of the entities’ compliance with statutory prudential requirements, says the IC. The issuance of the new CL was prompted by President Ferdinand R Marcos, Jr’s approval of his eight-point socioeconomic agenda under the PDP for 2023 until 2028. The new CL supersedes CLs pertaining to allowable investments under the PDP for the years 2017 to 2022. “With the issuance of the PDP for 2023 to 2028, there was a need for the Commission to review and update its guidelines on allowable investments in infrastructure projects under the PDP with the objective of aligning policy with the President’s agenda,” said Insurance Commissioner Mr Reynaldo A. Regalado. Allowable investments Regulated insurers or reinsurers may undertake either or a combination of an equity investment, by which the regulated entity invests capital in the project, and/or a debt investment as a financier or a sponsor of an infrastructure project. The investments shall require the prior approval of the Commission. For life insurance companies, the total allowable investments in infrastructure projects under the PDP shall not exceed 40% of their admitted assets, respectively, per their latest approved annual statements. For non-life insurance companies and professional reinsurers, the total allowable investments in infrastructure projects under the PDP shall not exceed 40% of their respective net worth, per their latest approved annual statements. In the determination of an insurer or professional reinsurer’s compliance with the risk-based capital requirement, which is also a prudential requirement by the Commission, the new CL imposes risk charges relating to investments in PDP infrastructure projects. The risk charge for equity instruments is 9%, while the charge for debt instruments is 6%. However, the Commission may impose a lower risk charge for debt instruments if the same have high credit ratings given by an external credit rating agency. Mr Regalado said, “The Commission will be closely coordinating with the Department of Finance, the National Economic Development Authority, and the Public-Private Partnership to ensure that requests for these kinds of investments are in line with national government policy objectives.” Source: asiainsurancereview.com

PIRA Deputy Chairman Arturo Reyes and Executive Director Mitch Rellosa were invited as speakers at the Association of Insurance Claimsmen, Inc. (AICI) General Membership Meeting on November 15, 2024 at the Manila Prince Hotel.

An estimated 10,000 coastal properties in Auckland, Wellington, Christchurch, and Dunedin could become uninsurable by 2050 due to coastal erosion and inundation. Properties located in flood prone areas inland are similarly at risk, according to a report by the Helen Clark Foundation and engineering consultants WSP. The report – titled "Premiums Under Pressure – How climate change will reshape residential property insurance, and what to do about it" – says that home insurance premiums in New Zealand have faced steep increases over the past few years. Premiums are expected to rise further over time as more insurers move to adopt ‘risk-based pricing’ for flood hazards and as the impacts of climate change increase, pushing up costs for insurance companies and their international underwriters. Without effective policy measures, these pressures will result in unaffordable premiums for some properties, leading households to reduce, or cancel, their insurance cover. The report says that New Zealand must act now to maintain high levels of residential insurance and help protect the country from an uncertain future. Failing to do so will mean not just personal hardship for those who find themselves underinsured after a disaster – it could also have significant fiscal impacts for the government.  Low-income households and communities will be disproportionately affected, with unaffordable premiums likely to leave many without coverage just when they need it most. This poses a serious social equity issue for the nation. As insurers adopt ‘risk-based pricing’ due to climate change impacts, WSP fellow and report author Ms Kali Mercier says the thorny challenge facing policymakers is how to keep premiums accessible and affordable. “Maintaining high residential insurance coverage, especially for floods, is critical to safeguard the country’s economic and social resilience in the face of climate change, and to keep people in vulnerable locations from falling into poverty when weather-related disasters strike.” Ms Mercier added, “There are several potential options to keep insurance accessible and affordable, and as a country, we need to urgently decide which we are going to adopt. Some of the more promising include subsidies for those who can’t afford insurance, standardisation of insurance policies (so people know what they are covered for), and making pricing criteria more transparent. We also need to ensure that the insurance market remains as competitive as possible.”  Key recommendations include: Recognise the vital role of residential insurance in maintaining societal resilience in the context of increasing climate change-related risks. Avoid further developments in flood-risk areas that exceed agreed risk tolerances. Invest in climate risk mitigation and adaptation to keep residential insurance premiums accessible and affordable for longer. This must include setting out clear responsibilities and decision-making processes for how adaptation will be planned, funded and implemented at national and local levels. Agree on a framework and a funding model for planned relocation for homes in risky areas where other types of intervention are not cost-effective or technically viable. Develop a public residential insurance scheme or schemes to fill current and future gaps in insurance caused by climate change, especially for flood risk. Consider other interventions in the residential insurance and financial markets to maintain high levels of insurance penetration, such as: Subsidising premiums for some homeowners; Standardising and simplifying insurance contracts; Agreeing on the level of transparency that is expected from insurance companies about how they make decisions affecting premiums prices; Monitoring and promoting competition in the insurance market. Source: asiainsurancereview.com