MAKATI, Philippines -- The Philippine Insurers and Reinsurers Association (PIRA) recently hosted a roundtable dialogue on agriculture insurance at the Asian Institute of Management, with no less than a senator of the republic and representatives from the World Bank and major insurance/reinsurance companies as participants.
PIRA Chairperson Rebecca dela Cruz led the dialogue together with Sen. Cynthia Villar, principal author of the proposed law creating a climate-based insurance for farmers. Ms. Dela Cruz noted the importance of the event as she highlighted the role farmer’s play in the country's food security and the value of insurance in a country visited by at least 20 typhoons every year and faced with other climate change-related challenges.
Sen. Villar, chairperson of the Senate Committee on Agriculture and Food, discussed the salient features of Senate Bill No. 1759 or the Free Index-Based Crop Insurance which she authored to help small farmers deal with calamities. “With this Free Index-Based Crop Insurance, our farmers would then have a sense of pride. They would no longer queue for calamity assistance but instead, would go to an insurance company to file a claim for indemnity,” she said. Villar said the measure would enable the government, in partnership with the private sector, to provide specialized insurance to farmers affected by typhoons and other natural disasters. Envisioned to make insurance policies accessible to farmers, the climate-based crop insurance is new in the country but the Villar's committee has already consulted a number of experts and “we are on the final stages of bringing it to the plenary,” she said.
The dialogue was participated by Insurance Commissioner Dennis Funa and other officials of the Insurance Commission, executives from insurance companies, experts from World Bank, the University of the Philippines, and the weather bureau. With “The Role of Agriculture Insurance in Providing Social Safety Net for Farmers, and its contribution to the Country’s Food Sustainability Goals” as theme, the roundtable involved five focus points: 1) the perspectives of the industry towards agriculture, 2) the possibilities of its insurance, 3) the design of the products to be made available, 4) the system it will operate under, and 5) the role reinsurance will play in the scheme.
Mr. David Gregori of Willis Re advised the participants to give importance to knowing the needs of the farmers and educating them about agriculture insurance. "Specifically knowing the consumers aimed to be protected by this system, identifying the risks to be covered, and ensuring the product type are key factors into the foundation of this law," he said.
Meanwhile, PIRA Executive Director Michael Rellosa lauded the proposed agriculture insurance law even as he revealed important challenges that the private sector is facing in view of such measure. One major challenge that Mr. Rellosa highlighted was the need for accurate data that insurance companies can use in calculating risks. "Without data, we will just be relying on guesstimates," he said.