Prudential secures microinsurance partnership

Companies team up with the aim of drawing 30,000 new members in six months

Prudential secures microinsurance partnership

Insurance News


Online communities will be set up in rural cities in the Philippines to improve micro insurance literacy under a partnership between Prudential Life UK, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), and CommLinked.

“Through the online communities, members, including children, can read and write blogs, play educational games, and watch videos that tackle finances early on,” said a report by the BusinessMirror. The goal is to draw 30,000 members in six months into micro insurance.

The project will focus on Tacloban City in Leyte and Butuan City in Agusan del Norte.

According to the report, micro insurance was launched in 1997 under the Philippines’ National Strategy for Microfinance to protect low-income earners from financial risks such as natural and manmade disasters, health emergencies, and economic threats.

A study released by Finance Undersecretary Gil Beltran showed microinsurance funds were primarily collected from remittances of overseas Filipino workers (OFW) who eventually become microentrepreneurs, said the report.

“OFW remittances are highly correlated with microfinance coverage [0.64 correlation ratio]. It is apparent family members of remitters eventually end up as microentrepreneurs, and the funds deposited in the banks by remitters boost the level of funds available for microlending,” he said. “However, the impact of both microfinance coverage and OFW remittances are not immediate, as they are lagged by two years.”

GIZ Senior Adviser Jimmy Loro said residents in the chosen provincial areas are interested to read online about income opportunities and additional businesses. Meanwhile, GIZ Program Director Antonis Malagardis sees micro insurance funds flowing to these cities’ infrastructure projects.

“We are looking further into infrastructure and construction. We’re progressing fast, but have more to do. Private sectors are not much interested in investing in agriculture because of higher subsidies,” said Malagardis.

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