Crucial Role of Tailored Microinsurance Products in Philippine Market Engagement

For many individuals, grasping the concept of insurance typically revolves around four main categories: life, health, auto, and long-term disability. While awareness of the importance of insurance is on the rise, traditional insurance offerings often fail to resonate with a significant portion of the population due to factors such as cost, accessibility, and relevance. These challenges have significantly contributed to the low insurance penetration rate in the Philippines, which stood at a mere 1.68% as of September 2023.

This is where microinsurance is revolutionizing the landscape, with insurtechs and insurance companies introducing tailored microinsurance products that directly address the unique lifestyles and requirements of Filipinos across different life stages. As an insurtech, Igloo and its partners have played a pivotal role in providing a diverse range of microinsurance products, catering to the distinct needs of digital natives and underserved segments of society. These offerings span from travel and electronics protection to e-commerce purchase coverage and even health protection for gamers.

“While traditional insurance plans often come with high premiums and generalized coverage, microinsurance products are specifically designed to offer targeted protection against relevant risks encountered in our daily lives. By providing affordable products that address immediate needs, microinsurance serves as a gateway to broader insurance coverage, potentially bolstering insurance penetration rates,” explained Roberto Vea, Commercial Lead at Igloo Philippines.

Among the most sought-after microinsurance products facilitated by Igloo PH and its partners are Gadget Protection and Online Shopping Protection. In 2023 alone, Gadget Protection saw the sale of 10.3 million policies, while Online Shopping Protection recorded 1.98 million policies sold, underscoring strong customer demand for coverage against electronic device damages and online purchase risks.

“Microinsurance empowers individuals to shield themselves from the risks they face in today’s world, whether it’s safeguarding their gadgets from liquid damage or ensuring affordable coverage for impromptu travel adventures. At Igloo, we believe it’s crucial for insurers and insurtechs like us to continuously innovate and develop products that resonate with our customers,” added Mario.

As of September 2023, microinsurance premiums in the Philippines have surged by 19.6% to reach P10.16 billion, with over 56 million Filipinos now covered under microinsurance policies.

“The growth of the microinsurance sector underscores the necessity for insurance awareness to evolve alongside our digital-first lifestyles, safeguarding our expanding virtual assets and providing peace of mind against modern risks,” emphasized Vea. “This entails ensuring that insurance products are accessible where our consumers are – online – thereby streamlining the entire purchasing journey from consideration to claims, making it easy, accessible, and hassle-free.”

According to a recent study by Manulife, 41% of Gen Z individuals (aged 18-24 years old) plan to purchase insurance online within the next 12 months. Additionally, the study revealed that 33% of millennials (aged 25-44 years old) have already made online insurance purchases. This trend indicates a growing preference among younger generations for online channels when it comes to buying insurance.

This is where the availability of embedded insurance has expanded distribution channels, offering consumers a convenient way to discover, evaluate, and purchase products with just a few clicks. Igloo achieves this through partnerships with major e-commerce platforms like Lazada and Shopee, leading payment platforms such as DANA in Indonesia and GCash in the Philippines, and retail chains like Circle K in Vietnam.

“As Igloo continues to play a crucial role in making microinsurance accessible to millions of Filipinos, we remain committed to prioritizing products that not only raise awareness and adoption of insurance but are also relevant, innovative, and customer-centric,” concluded Vea.

For more information on Igloo’s tailored microinsurance solutions, visit iglooinsure.com.