Several private sector insurers are looking to begin providing catastrophe reinsurance for properties in the Philippines this year, in order to mitigate losses in the disaster-prone nation.
A number of executives of general insurance companies have been working towards this goal for the past few years, and Philippine Insurers and Reinsurers Association (PIRA) executive director Mitch Rellosa has expressed optimism towards this endeavour, state-owned Philippine News Agency reported.
On January 28, officials of PIRA, the Insurance Commission (IC), and the National Reinsurance Corporation of the Philippines (NatRe) came together to sign a memorandum of understanding, which is the first step in establishing the Philippine Catastrophe Insurance Facility.
According to Rellosa, the involved parties will soon form a technical working group to formulate a framework and various other specifics for the catastrophe insurance facility. He also called on the various general insurers in the country to join the effort to provide catastrophe cover, following several costly natural disasters in recent months.
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While several insurers already offer catastrophe insurance in the market, these are reinsured abroad. The establishment of a local reinsurance pool will allow the industry to grow its premium base as well as its reinsurance capacity, Rellosa said.
“We try to keep what we can locally,” he said, adding that the facility will help spread risk and limit exposures.
“We want our target crowd to appreciate the importance of property insurance as a risk transfer mechanism in the event of disaster,” said Dennis Funa, Insurance Commissioner.
