Kathmandu. The Philippines is considered a global leader in the field of micro insurance. The Philippines’ model of providing financial security to low-income groups and its impact on the economy could be an important lesson for a developing country like Nepal. <\/p>\n
The mainstay of microinsurance’s success in the Philippines is the public-private-partnership and mutual benefit association model. <\/p>\n
The Philippines established a separate regulatory framework for microinsurance after 2008. The insurance premium is set at no more than 7.5% of the daily minimum wage, making it easier for poor people to buy insurance. <\/p>\n
Insurance policies are not only sold through traditional agents, but also through shops, cooperatives, rural banks, and digital wallets (such as GCash). <\/p>\n
Smallholder farmers, informal sector workers, and low-income women are the main beneficiaries of this. As of 2023, there are about 50 million people (48% of the total adult population) covered under micro-insurance. <\/p>\n
Micro insurance has made a limited contribution to the Philippine economy.\u00a0When natural disasters or health problems strike, poor families are not allowed to fall into a vicious cycle of debt, which keeps consumption and savings stagnant. <\/p>\n
Micro-insurance in the Philippines covers not only crop and livestock damages, but also medical expenses and loss of income when a farmer falls ill. <\/p>\n
Although the share of micro insurance in the total insurance premium is only 3%, it accounts for more than 75% of the total number of policies. This has helped to widen the scope of the insurance market and increase the contribution of the insurance sector to the GDP. <\/p>\n
In Nepal too, micro-insurance has been prioritized in recent times. The Insurance Authority of Nepal is managing it through the Insurance Act 2079 and Micro Insurance Directive 2079. <\/p>\n
In Nepal, 7 micro insurance companies (life and non-life) have been licensed, which have already started working in rural areas. <\/p>\n
Nepal has adopted a stand-alone model, where separate companies are set up only for micro insurance. Earlier, it was mandatory for large insurance companies to insure 5% of their total business. <\/p>\n
Nepal can follow the following aspects of the Philippines to make its micro insurance sector effective: <\/p>\n
Faster Claim Payment: In the Philippines, claims are paid within a few days of the incident. In Nepal too, there is a need to simplify and speed up the claim process. <\/p>\n
Digitalization: The technology of premium collection and payment through mobile apps and digital wallets should be taken to the villages. <\/p>\n
Partnerships: Micro insurance can be taken up as a compulsory or packaged partnership with cooperatives and local governments. <\/p>\n
Awareness: The message that insurance is not an ‘expense’ but a ‘saving and security’ needs to be taken to the grassroots level. <\/p>\n
The foundation of micro insurance has already been laid in Nepal. If the Philippines adopts technology and a simple delivery system, it will be a milestone in poverty alleviation and economic stability in Nepal.<\/p>\n","protected":false},"excerpt":{"rendered":"
Kathmandu. The Philippines is considered a global leader in the field of micro insurance. The Philippines’ model of providing financial security to low-income groups and its impact on the economy could be an important lesson for a developing country like Nepal. The mainstay of microinsurance’s success in the Philippines is the public-private-partnership and mutual benefit […]<\/p>\n","protected":false},"author":5,"featured_media":229298,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[45031,45149,45159],"tags":[],"class_list":["post-295382","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banner-news-en","category-laghu-beema-en","category-news-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/295382","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/comments?post=295382"}],"version-history":[{"count":1,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/295382\/revisions"}],"predecessor-version":[{"id":295383,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/295382\/revisions\/295383"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/media\/229298"}],"wp:attachment":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/media?parent=295382"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/categories?post=295382"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/tags?post=295382"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}