Speech of Mr. Michael F. Rellosa, Chairman, PIRA, Inc. during the Bangko Sentral ng Pilipinas "Launch of the National Strategy for Financial Inclusion”:
Good afternoon. First I would like to thank the BSP for inviting the Philippine Insurers & Reinsurers Association here.
We always believe that insurance and banking are siblings, although we are often referred to as the less attractive sibling. Banking obviously is more glamorous -- it deals with savings, investments, earnings, whilst insurance deals with hazards, risks, and losses, negatives in most people’s eyes.
But less glamorous as it is, insurance no doubt plays a vital role in our daily lives. The economy will stop without insurance. Airplanes, ships, trains, motor vehicles, construction work, mall operations – commerce, all of these would ground to a halt if there is no insurance.
Insurance lessens the uncertainties in business. It answers the "what ifs" of life. It somewhat repeals the so-called Murphy's Law. Because with insurance, somebody -- and that is us -- assumes the risks for you.
How do you make sure a market vendor or fish monger would pay off his or her loan to the bank?
How do you make sure that same market vendor or fish monger would be able to continue paying even after a natural calamity like super typhoon Yolanda?
And how do you make sure that you can still recoup the money you lent to that vendor if that vendor was among those who perished in Yolanda's storm surge, along with all of his material possessions?
You see, even as we speak, millions of our less privileged countrymen are already clamoring for that thing called microinsurance. This is basically insurance in sachet form -- for as low as 10 pesos, one can be insured for 30 days and get a payoff of P5,000 for a calamity or P20,000 for death of the insured. There is already documented evidence that microinsurance benefitted more than 70,000 survivors of typhoon Yolanda. These people were able to start over and are now spreading the good news that, indeed, insurance works.
We in the Philippine Insurers and Reinsurers Association (PIRA) hope that as the government pursues this financial inclusion strategy for our country, that it would also look into ways on how to make insurance more affordable to those who need it the most.
With the Insurance Commission’s support, PIRA is advocating the rationalization of taxes levied on insurance products to be at par with the ASEAN in the run-up to the integration. With lower taxes, insurance becomes inclusive.
At Sendai last March and in New York earlier this June, with our counterparts the world over, we have partnered with the UN through the United Nations Environment Program, and are committed to concrete actions on risk management, insurance products, investments, partnerships, and disclosure frameworks that support disaster risk reduction, climate change adaptation and mitigation, financial inclusion, green investment, and accountability and transparency.
You can count on the Philippine insurance industry to make sustainable development in general and financial inclusion strategy in particular, not only a reality but a resounding success.