After discussing the basic landscape for microinsurance in the Philippines, this week we will discuss how that structure reacted after Typhoon Haiyan struck the country on Nov. 8, 2013.
Once the storm had passed, the Insurance Commission (IC) coordinated with various industry stakeholders and associations to develop a plan for quick processing of insurance claims.
The plan called for:
- Establishment on Dec. 13 of a Claims Action Center (CAC) manned by representatives of the IC and the insurance industry in Tacloban to serve as a one-stop shop to address inquiries from Haiyan victims;
- Submission by all insurers of a master list of policyholders to assist with reviewing claims payments and checking for names of victims;
- Authorization of the initial payment scheme for life insurance of PHP 10,000 (USD $226), or 50 percent of the benefit paid on submission of minimum documentation requirements, with the balance to be paid on receipt of standard requirements;
- Enforcement of a premium payment moratorium of 90 days;
- Public announcement of the Claims Action Center to assure the public of quick claims processing.
Although the CAC concept was admirable, most claims settlement was driven by the strong relationship between the policyholder and the intermediary; almost half of the claims were paid in January 2014, two months after the typhoon, through individuals working directly with their intermediaries.
The IC was in contact with the industry to monitor claims progress and relief efforts. To expedite claims processing, the IC allowed insurers to use satellite images and crisis mapping for claims validation.
Due to the magnitude of the destruction, few goods were available to buy and the basic necessities of food and water were scarce, so the IC allowed payment in the form of goods if the policyholder or beneficiary agreed.
Although the IC established a 90-day moratorium on premium payments, insurers found that a large number of customers still made their insurance premium payments under those difficult conditions.
Next week we will take a close look at the claims processing in the wake of Typhoon Haiyan.