MANILA, Philippines — The Insurance Commission (IC) plans to roll out this quarter the first private sector-led catastrophe insurance facility in the country that will ease the risks borne by non-life insurers from disaster-related claims.
IC Commissioner Dennis Funa said the Philippine Catastrophe Insurance Facility (PCIF) would allow non-life insurers to cede their catastrophe risks to this insurance pool, effectively allowing them to take in more risks.
The IC, National Reinsurance Corp. of the Philippines (Nat Re) and the Philippine Insurers and Reinsurers’ Association (PIRA) worked together in finalizing the facility, he said.
Funa said this would contribute to strengthening the country’s financial resilience against natural disasters as coverage for households and small businesses expand.
“We recognize the significant role that the non-life insurance industry should play in ensuring the Philippines’ catastrophe resilience and in bridging the catastrophe insurance gap that we need to urgently address as our country is among the most vulnerable to the onslaught of natural calamities,” said Funa.
With the PCIF in place, businesses and households can hasten their recovery after incurring large losses arising from catastrophic events such as typhoons and earthquakes.
The facility also aims to create a more risk-appropriate rating environment that would ensure sustainable catastrophe premium rates and provide the public wider access to catastrophe insurance protection, Funa said.
Local insurance companies providing catastrophe coverage currently reinsure their risks overseas.
Last year, the IC, Nat Re and PIRA signed a memorandum of understanding committing them to cooperate on the establishment of the PCIF.
The PCIF also aims to pool resources available in the country to keep most of the funds here and enable non-life insurers to grow the premium base, which would then allow them to expand the range of catastrophe insurance products available to the public.