2018 PIRA Chairperson's Year End Report
By Ms. Rebecca B. Dela Cruz
Philippine Insurers and Reinsurers Association
A very pleasant day to you ladies and gentlemen. Advance merry Christmas and a happy new year to everybody.
It is a privilege for me to be reporting to you today on what PIRA has achieved in 2018.
More than eleven months ago, we were inducted to the PIRA Board of Trustees, and subsequently, we made a collective decision to promote unity among us in the industry.
We all know that our industry is founded on the idea of risk sharing and the concept of collaboration or working together. Our industry always believed that when we are together, we are stronger.
My report to you today builds on this theme, "Stronger Together." I am happy and proud that we're able to make major strides towards this direction this year.
But before I narrate what PIRA has done, let me first ask you: Who among you watched the UAAP finals last week?
I will not any more ask which team you cheered for. Baka kasi ma put on the spot yung mga natalo sa pustahan. What I want to know is your opinion on this issue: What is more important, talent or teamwork?
Can I see a show of hands? Who says talent? And who says teamwork?
I will not pretend to be a basketball expert, but I say that both UP and Ateneo had talented players.
UP even had two players who made it in this year's Mythical Five -- including the Most Valuable Player.
And it was significant to note that Ateneo did not have a single player in the Mythical Five.
Yet why did Ateneo win the championship?
Well, Ateneo did not rely on one or two players only, but on all its players.
UP, on the other hand, relied heavily on its MVP -- who, unfortunately for them, was injured in Game 1. And that spelled the big difference.
Talent or teamwork?
Indeed, even Michael Jordan, known as the greatest basketball player of all time, once said this: "Talent wins games. But teamwork wins championships."
With this as the backdrop, let me make my report.
It was teamwork and collaboration that we wanted to achieve when we began the year inviting everybody in the insurance industry to work with PIRA.
We started this with our Strategic Planning in February where we invited no less than Insurance Commissioner Dennis Funa, all four Deputy Insurance Commissioners, the key officers of the IC, heads and members of our technical committees, and heads and members of various industry associations.
The objective of this Strategic Planning Session with our regulator and key industry partners was mainly to align our projects with theirs. We believe that for our industry to succeed, our plans and programs must be aligned with one another, and must actually complement each other.
After this Strategic Planning, we began signing partnerships with industry players. We drafted several Memoranda of Understanding between PIRA and insurance industry groups. Among these groups were the Association of Insurance Brokers, the Association of Claimsmen, the Society of Underwriters, the Society of Independent Insurance Intermediaries, and even the Association of Insurance Accountants and Association of Adjusters. And yes, we also signed a fresh partnership with the Philippine Insurers Club, which has been helping PIRA all these years.
The main goal behind these partnerships is to foster the sharing of ideas and resources between PIRA and other industry groups, especially on the technical aspects of our business and the promotion of our industry's good image.
About this time, PIRA began revising its bylaws to increase the number of trustees and include two independent directors.
And part of this bylaws revision is the hiring of an Executive Director in the person of former Chairman Mitch Rellosa.
With Mitch as our ED, feeling ko we just recruited an MVP to our team.
After we have signed up all major insurance associations, we then worked as one Philippine Team in organizing the biggest insurance event that happened in the country this year -- the 29th East Asian Insurance Congress.
I'm sure most of you, if not all, attended this historic event. It took 18 long years before the EAIC was able to come back to our shores. And it may take another 18 years or more before we ever see this event being held here again.
I am proud to say that the PIRA was the main association behind this event as PIRA provided the financial resources to get this event going.
And as expected, the event was a huge success. More than a thousand attendees from 40 different countries came and engaged in a 3-day high-level learning at the Marriot Ballroom.
Indeed, it was an event to remember.
And I am very happy to tell you that we were able to generate a substantial income from our investment on this event. After taxes, our audited income from this EAIC was ______ million pesos which I hope the Manila Organizing Committee would finally turn over to PIRA very soon.
On the sidelines of the EAIC, we were able to hold a forum on Self Regulatory Organizations as PIRA has been considering the possibility of becoming an SRO just like insurance associations in other countries such as Hong Kong.
We invited resource persons from here and abroad to enlighten us and other members on the pros and cons of being an SRO.
And we supplemented this forum with a commissioned study conducted by the Du Baladad Law Office which showed us what we need to do to be able to achieve SRO status in the coming years.
Are you ready to vote for PIRA to be an SRO? That could be the agenda for another meeting sometime next year.
Now let me enumerate one by one the advocacies we've engaged in this year.
Most notable among these advocacies was the development of Agriculture Insurance and alignment of the country's environment focus to access what is called as the Green Climate Fund.
For years now, we have been helping both our government and international groups develop a local agriculture insurance to supplement the grossly inadequate Crop Insurance program for our farmers.
This year, agriculture insurance became more a buzzword as both Asian Development Bank and the World Bank, not to mention the Insurance Commission, pushed us to focus more closely on the development of a weather-index-based parametric agriculture insurance.
Another initiative, we began this year was the exploration of how to tap the
Green Climate Fund as a source for disaster resiliency financing. The Green Climate Fund is a hundred-billion-dollar global platform that invests in low-emission and climate-resilient initiatives to help developing countries and vulnerable societies adapt to the unavoidable impacts of climate change.
With our country ranking fifth as most affected country in the world in terms of extreme weather events, we, in PIRA were enjoined to present climate-related programs, including options for co-financing and private sector engagement, to receive support from the Fund.
Initially, the focus areas identified for the Green Climate Fun were agriculture, energy, fisheries, forestry, transportation, and disaster risk reduction.
PIRA has been tapped to provide technical support for the development of a National Agriculture Insurance Road Map. Our Technical Subcommittee on Microinsurance is the one heavily invested in this.
Related to this is the proposed bill of Senator Cynthia Villar to provide free parametric agriculture insurance to farmers.
Senate Bill 1759 or the Free Index-Based Crop Insurance Act, seeks to increase the access by our rice, corn and coconut farmers to safety nets against the effects of climate change by establishing the enabling policy, regulatory, and funding support for a more effective crop insurance program.
PIRA hosted an industry roundtable discussion on this topic at the Asian Institute of Management in July.
And our Technical Working Group was providing inputs to the office of Senator Villar to help make this bill be an actual law soon.
Meanwhile, to address the protection gap for possible natural catastrophes in urban areas, PIRA is collaborating with various groups on the development of a NatCat Pool.
This NatCat Pool aims to provide NatCat cover for small-and-medium enterprises or SMEs as well as residential buildings.
The Philippines, as we all know, is the third most disaster-prone country in the world.
And this year, we again witnessed a major disaster when super typhoon Ompong sideswiped the northern part of the country and caused a tragic landslide in a mining town in Benguet, leaving close to a hundred people dead.
The ADB and World Bank have been collaborating with PIRA to develop a framework for Disaster Risk Financing, beginning with government-owned buildings and later on including private residential units not usually covered for earthquakes, typhoons and flood.
As we have witnessed in many instances, the victims of natural catastrophes bave been often the poor and uninsured, hence they are the ones being targeted by these disaster risk financing initiatives.
One collaborative project landed on the PIRA's lap this year. And this was initiated by the Earth Security Group or ESG, a UK-based organization. The ESG approached PIRA to explore the role insurers could play in creating new products, services and partnerships to increase climate resilience and protection of our natural resources, particularly our coral reefs.
PIRA will be working with the ESG on a pilot project in Davao, Philippines next year. We will surely tap the technical expertise of our members, particularly those with exposure to the marine business.
Now let's go to the information technology...
This year, our IT committee, in partnership with our Technical Subcommittee on Motor Car and NTT Data, worked on the enhancement of the Motor Claims Information System or MCIS.
After months of development and testing, the MCIS Version 3.0 is finally live and ready for everybody's use. This cloud-based tool is available 24/7 for us to access.
Let me take this opportunity to encourage all of us here to truly make this MCIS work. It will only work if we provide it with data, because data is the fuel that would make this system run. Let's submit our latest motor car claims to the MCIS, and I assure you, we will all benefit from it by providing us with timely information that could guide us in preventing fraud in our motor car business.
Speaking of the motor car, our Technical Subcommittee is working on increasing the coverage of the Compulsory Third Party Liability or CTPL insurance as well as the Passenger Personal Accident Insurance or PPAI.
As you all know, there has been a move to raise the CTPL cover from P100,000 to P200,000 and the PPAI from P200,000 to P400,000.
And this move is being closely studied to include also a simplified approach in settling claims.
This project is once again a collaboration between committees -- in this case, the Motor Car subcommittee and the Legal Committee.
Indeed, we are always productive when we are working together.
Also this year, we tackled in more detail the International Financial Reporting Standard 17 or IFRS17 and the Data Privacy Law.
To assist our members in understanding the nitty-gritty of these major developments, we partnered with NMG Consulting and the National Privacy Commission in organizing several learning sessions facilitated by experts in these fields.
I hope this coming 2019 all of us will be able to apply what we have learned and be able to comply with the requirements of the IFRS17 and the Data Privacy Law.
Now we go to a very important development.
For years now, PIRA has been lobbying for lower taxes on non-life insurance.
And I am happy to inform you that it appears that Package 4 of the Tax Reform for Acceleration and Inclusion or TRAIN has been approved by the House of Representatives and is now being deliberated on in the Senate.
The TRAIN's Package 4 has a provision that lowers our premium taxes to 5 percent. PIRA has worked so hard to make this happen, and is even pushing the envelope a bit further to lower this rate to 2 percent by 2021.
Please help us pray for this to become a reality soon. We have received information that this may not be passed before the end of this year or even early next year. It seems our lawmakers will be busy for the mid-term elections and may shelf this to until the May elections are over.
Now we go to our collaborations overseas.
Three weeks ago, we were in Kuala Lumpur, Malaysia for the ASEAN Insurance Council Meeting.
And I am happy to report that we have our very own Executive Director Mitch Rellosa has been re-elected as Education Committee Chairman and Mr. Allan Santos of National Re as Reinsurance Committee Chairman.
These are very important positions in the AIC which charts the future of insurance in the region.
We took advantage of our attendance to the AIC meetings to establish formal partnerships with our counterparts in other ASEAN member countries.
In this slide you will see the signing of Memorandum of Understanding between PIRA and Laos, Myanmar and Indonesia.
We also signed an MOU with Singapore, the ASEAN Insurance Council itself and the General Insurance Association of Japan.
These agreement signings were witnessed by no less than our Insurance Commissioner Dennis Funa who was very supportive of these collaborative works.
You may be wondering what these MOUs are all about.
They are agreements between PIRA and the non-life or general insurance associations in the foreign country to encourage partnership and sharing of knowledge among their insurance executives.
We are looking at signing more MOUs with the rest of AIC members.
So far, we have pending MOUs with Cambodia, Brunei, Thailand and Malaysia.
We are just waiting for their approval of the terms of the agreement and we will probably sign these agreements in the next scheduled meetings of the AIC.
Speaking of the AIC Meeting, we are scheduled to host the 2020 AIC Meeting. It will be an opportune time to showcase what non-life insurance is doing in the region and to enhance our partnership with our neighbors.
Now we will go to the accomplishments of the Public Relations and Education Committees.
Among the truly notable achievements of our Education Committee is what they call as PIRA Thesis Sponsorship.
Maybe you do not know, but for the last two years, PIRA has been providing an incentive to students to encourage them to do research related to insurance.
The sponsorship is not much -- P5,000 for each student and P5,000 for their adviser. We even provide a higher grant to Masteral students.
For this year, we had two sponsored theses -- one for the Undergraduate level and the second for the Masteral level.
The Undergraduate thesis, we sponsored was by two BS Math students of the University of Santo Tomas. It looked into the factors that affected car accidents -- factors that insurance companies could use in computing premium rates.
The Masteral thesis, on the other hand, focused on the taxes being levied on the insurance industry. Specifically, the thesis explored the benefits the government would get if it decides to lower the taxes it gets from non-life insurance products.
These theses are now available at the PIRA office. We have published articles about it in our website, but maybe it would be best to circularize the findings and recommendations from these studies to our members.
Another project of the PR and Education Committees is the creation of the first Bachelor of Science in Business Administration degree that focuses on insurance.
The BSBA Risk and Insurance Management or BSBA RIM course was developed by PIRA in collaboration with the Insurance Institute for Asia and the Pacific and the Asia Pacific College.
Students can now enroll in this course, and the Asia Pacific College is even offering discounts to encourage more enrollees.
Please include this course also in your prayers as we all know that insurance is not sexy in the eyes of the youth. For them to be interested in taking up this course, we must not only inform them, but influence and inspire them to consider a career in the insurance industry.
Meanwhile, our PR and Education Committees have been very busy this year doing collaborative work.
The PR and Educ Committees worked with Adamson University to make PIRA an institutional partner in the development and enhancement of Adamson's curriculum where insurance and risk management are included.
In these pictures, you can see our Executive Director who also serves as Chairman of our PR Committee signing the agreement with Adamson in a formal ceremony.
Another project of the PR and Education Committee is a collaboration with the Bangko Sentral ng Pilipinas to promote Financial Literacy.
Called Financial Education Stakeholders Expo, this two-day event was held at the SMX Convention Center and was attended by more than a thousand teachers, students and corporate partners engaged in financial education, both formal and informal.
Former PIRA Chairman Mon Dimacali moderated a session on Financial Education as Corporate Social Responsibility.
PIRA even had a booth in the expo, and I heard that it was one of the most visited.
One very interesting project of the PR and Educ Committee is what is called as PIRA TV.
I hope you have watched the 8 episodes already uploaded to the PIRA Facebook page.
The PIRA TV aims to address important questions the general public may have about insurance in a way that will be easily understood.
Maybe we can ask our Executive Director later if all of you can be invited to guest in the PIRA TV episodes this coming 2019. I'm sure you are all excited to see your faces on internet TV.
In October, PIRA partnered once again with the Philippine Insurers Club for this year's Insurance Consciousness Week.
We continued the campaign, we started last year, which is called "I Love Insurance." We hope to further amplify this message not only during ICW but all year round.
During the opening day of the Insurance Consciousness at the Insurance Commission, our Technical Subcommittee on Surety launched the book that contains a collection of Supreme Court rulings related to surety.
While the book is still up for publication, our Surety Subcommittee deemed it opportune to launch the book side by side the PIRA Code of Ethics that we also launched that day.
The PIRA Code of Ethics is due for ratification today.
This is a project of the PIRA Ethics Committee. It aims to promote professionalism, respect and harmony in the industry.
One of those who helped us in crafting this Code of Ethics is former PIRA Chairman Jhun Benedicto, who will also be launching today in this General Membership Meeting his own book, "The Business of Risk and Insurance in the Philippines."
And finally, it was not all work for PIRA for 2018. Though we did not have our own PIRA Convention to give way to the EAIC, our PIRA General Manager Roger Concepcion and our Technical Committee Chairman Joel Libo-on being able to organize a very successful PIRA Networking Golf.
The tournament attracted some 60 players and finished with a net income, thanks to its generous sponsors.
I would close my report by encouraging all of us here to continue supporting all PIRA projects. PIRA is fast becoming a buzzword when people talk about insurance. The media now consider PIRA as the authority when it comes to non-life insurance. And organizations, both local and foreign, look up to PIRA for directions when the Philippine non-life insurance industry is involved.
The year 2018 has been very productive for us in PIRA.
But believe me, 2019 will be more exciting and more fulfilling as we continue to work side-by-side, considering ourselves not only as colleagues in the business but fellow players in a team we call PIRA.
As the wise Helen Keller once put it, "Alone we can do so little. But together we can do so much."
That concludes my year end report. Thank you very much for your attention. Merry Christmas and a happy new year to all of us.