Microinsurance, the key to strengthening resiliency

Dr. Jaime Aristotle B. Alip
CARD MRI Founder and Chairman Emeritus

While the global community seeks for ways to stop the COVID-19 outbreak, keeping free from the virus is just one of several anxieties faced by the low-income sector in their everyday lives these days. Accidents, illness and deaths remain a reality for the poor.
Ninfa E. Beraminde has been a client of CARD, Inc. for almost five years in Isabela, Basilan. When her husband died on March 23, 2020, she did not expect to be able to claim her death benefits as mobility was hampered with the imposition of community quarantine. Likewise, CARD MRI members or their dependents get sick, figure in a fire, or die even in the midst of the pandemic. Four of our clients  are now part of the statistics of COVID-19 positive patients who succumbed to the disease.
Clients of CARD MRI automatically become members of CARD Mutual Benefit Association (CARD MBA), which enables them and their families to become covered under its life insurance. From Aparri to Zamboanga, Ninfa’s story mirrors every poor families’ struggles amidst the pandemic. Traditionally, beneficiaries are required to submit documents for claims settlements in the Mi-MBA offices. However, through online claims validation by fellow members who serve as  Claims Processor right there in their communities and submission of death and marriage certificates through the Messenger app, members’ survivors were able to receive from PhP30,000-PhP55,000, depending on length of membership.
Combined data from CARD MBA and CARD Pioneer Microinsurance Inc. (CPMI), which are both microinsurance companies that are part of CARD MRI, show an average of 161 claims payment made amounting to PhP 6 million per day from March 16 to April 3, 2020. Industry-wide, the 18-member Mi-MBA Association in the Philippines, RIMANSI, also pay claims in this time of crisis  Without microinsurance, less fortunate families will plunge deeper into poverty due to the lack of safety nets from unexpected perils.

Response to the pandemic
Resiliency is a common theme for microinsurance companies. As such, member-institutions of RIMANSI has been showing its flexibility to cater to the needs of its members even during the COVID-19 outbreak. Since members of Mi-MBAs are mostly from the bottom of the pyramid, the industry declared a moratorium on the weekly insurance payments until April 12, 2020. During this period, the members will remain covered under the life insurance offered by the Mi-MBAs. As the ECQ was declared extended up to April 30, 2020, the microinsurance industry is compelled to extend the moratorium until the ECQ is lifted.
Further, Mi-MBAs vows to continue to provide fast claims settlements. The process is relaxed such that claims validation are made through phone calls while documentary requirements can be submitted online through messenger platforms. As one member’s survivor from Batangas attested through a text message, “Gusto ko lang pong magpasalamat sa CARD MBA sa benepisyong nakuha ng aking ina na si Joy Austria. Napakalakingtulong po nito para samen lalong lalona at wala kami financially. Sa kabila po ng COVID nanararanasan ng bansa naten ngayon, di ko po inaasahan na mabilis na mapaprocess ng CARD insurance ang benepisyong ito ng aking ina through online. Madale namen itong na claim… kaya nagamit naming ito pangbayad sa lote na paglalagyan ng aking ina.”
Using technology and available remittance services, claims payments are done within 24 hours, where physical barriers allow, a feat that is especially appreciated by the survivors.

A tool for empowerment
With the emergence of COVID-19, not only health but also the livelihood of small entrepreneurs are jeopardized. The Mi-MBA industry with the microinsurance industry plan to formulate new policies to address the needs of the poor during a pandemic. The industry aims to improve its regulation to provide a wider range of insurance products for the poor in protecting them not only from death, injury, and illnesses but also to the potential losses of their income due to a national crisis.
To be able to do so, the help and support of the national government will be much needed by Mi-MBA and other microinsurance players to fulfill their duty in providing extensive protection coverage to the most vulnerable sectors in the country. The industry recognizes the current efforts of the Insurance Commission headed by Commissioner Dennis B. Funa to enable Mi-MBAs to be as responsive to clients’ needs under normal times as the regulations allow. However, the industry’s services need to be more proactive in times of national emergencies and crisis and it will happen if other government agencies adopt policies that will strengthen the Mi-MBAs and microinsurance companies in the country.  For example, tax exemption for Mi-MBAs owned by the communities should be upheld so that they can have adequate funds to create better products that will address the insurance needs of the marginalized
sectors during extraordinary times.
In the case of non-life insurance (i.e. disaster insurance, agriculture insurance, and property insurance among others) for the poor, a 2% reduction in tax on premium will be a welcome development. In addition, a calamity fund to assist its millions of members in times of national state of emergency should be established.
As CARD MBA and CPMI, together with the rest of the microinsurance industry, provide affordable and relevant risk protection to more than 27 million poor and low-income individuals in the country, they have  become a partner of  the  government in empowering the poor and creating resilient communities.  With the government’s continued support, microinsurance  will remain a beacon of hope in this time of distress and uncertainty.


About the Author
Dr. Jaime Aristotle B. Alip is the founder and chairman emeritus of CARD Mutually Reinforcing Institutions, a group of 23 institutions that envisions to eradicate poverty in the Philippines. He also serves as the chairman emeritus of RIMANSI, the MI-MBAs Association in the Philippines. He is the recipient of the 2019 Ramon V. del Rosario Award for Nation Building.