Findings of the 5-5-5 Country Diagnostic Study

About 100 million individuals make up the population of the Philippines, highlighting the potential for supplying microinsurance. The Study showed that in 2014, 53% of the low-income sector was not being served by microinsurance and it was expected that the microinsurance market of in the Philippines would expand to about 73.3 million by 2020.

The main opportunities identified from the Study were:

• Easy access to applications through mobile phones which can deliver microinsurance products (more than 100% penetration).
• A large portion of the microinsurance market is unserved.
• A favourable mutual microinsurance regulatory environment.
• A vibrant Mi-MBA sector with country-wide geographic reach.
• The network association of Mi-MBAs.
• The initiative of government regulators to stop informal insurance-like operations .

The main challenges identified during the study were:

• A geographically dispersed population, with the added complications of conflict in some areas (makes educating and implementing microinsurance in the Philippines difficult).
• Low insurance awareness and financial literacy.
• Increasing market competition.
• Regulatory limitation product offering.
• Uneven growth performance of Mi-MBAs.
• Limited microinsurance data.

The 5-5-5 project in the Philippines

The decision was taken to focus on Mi-MBAs because of the distinct advantage that they are already serving low-income households and them being a leader in the industry.

In line with the 5-5-5 Strategy, RIMANSI developed its Philippines 1-5-5 Program to insure one million new microinsurance members, covering five different lives, over five years. Adapting a sector approach allowed for driving and sustaining the growth. Based on the findings of the country diagnostic study, the main objective of the 1-5-5- Program was to help Mi-MBAs to improve their operational efficiency.

The activities undertaken as part of the 5-5-5 project included helping Mi-MBAs in the Philippines to:

• Explore distribution channels to reach new markets.
• Enhance existing products and assist in developing new products.
• Upgrade data management technology.
• Enhance technical, management and governance competencies.
• Expand investment opportunities and develop a mechanism to pool investments
• Create new MBAs

Other activities included:

• The creation of an investment pool among the Mi-MBAs called the Unit Investment Trust Fund, partnering with a top investment house in the country. This is now being offered solely for the Mi-MBAs. In the past three years, it has provided the Mi-MBAs with around 13% returns (more than 4% a year), maximising the returns and investment returns of the Mi-MBAs.
• The development of governance and financial management courses to help the Mi-MBAs in their expansion programmes.
• The development of a basic Mi-MBA common platform called e-mutuals.
• Piloting the delivery of microinsurance to non-traditional distribution channels.
• The development of a member education strategy consisting of five modules,13 tools approximately 40 visual aids.
• The development of a nationwide, labelled Mi-MBA mobile application that captures a membership profile, payment records, claims records etc.

Project results

Over the last five years, more than 1.9 million new members were enrolled in the Mi-MBAs which equates to over 9.8 million insured individuals with life insurance. With support of the financial partners, more than USD 500,000 has been generated in support of the programme and the funding cost per insured is only USD 0.27 and USD 0.05 per life impacted.