Two of Europe’s largest reinsurers,
Munich Re and
Swiss Re, have expressed interest in investing in the Philippines’ crop insurance market.
However, the current state of the Philippine Crop Insurance Corp. (PCIC) could present an obstacle.
According to former agriculture secretary and now congressman Arthur Yap, the two reinsurers have signified their intention to enter the Philippine market, which will help the country’s farmers avoid suffering heavy financial losses during calamities.
“We need to change the current system of our agriculture insurance. There are big reinsurance companies who want to enter but they need a partner locally,” Yap told the Philippine Star.
However, he said that that the PCIC’s charter does not allow it to offer reinsurance. As such, amendments to the government-owned firm’s charter must be made.
“Once we have the reinsurance, PCIC can already partner with the [European reinsurers] and that can be used to give to our local farmers,” Yap added.
Last year, Yap filed a bill which seeks to allow PCIC to offer index-based or parametric insurance coverage and allow it to provide reinsurance.
The index-based insurance will be based on temperature, wind speed, level of rain, and drought. Once the pre-set weather indices have been exceeded, the insurance will pay out, eliminating the need for damage assessment and allowing quicker release of payouts.
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