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July 14, 2024

PCIC no longer king in agri insurance

There is optimism among risk executives in the country that parametric insurance, for now underperforming as an industry, gains more acceptance as an instrument against uncertainties in the farming sector.

This was bared Monday by the Insurance Commission who told Bankero.com.ph that the government, via the Philippine Crop Insurance Corporation (PCIC) has partnered with private entities in offering insurance products to farmers and other low-income groups around the country.

According to Brian Gale T. Sibuyan, a lawyer at IC, a privately-operated organization has signified the intent to offer event risk cover for agricultural entities in tandem with the PCIC, which will effectively extend the umbrella against crop damage or loss by farmers raising various crops.

This is significant in that apart from the PCIC, not one from private entrepreneurs have offered such a product in the market at the moment.

“This will widen the field” of risk cover for farmers and crop growers, Sibuyan said.

Insurance chief Dennis Funa earlier issued Circular Letter 2021-60 sandboxing the idea that even the private sector may now offer risk events previously enjoyed only by the PCIC.

Sibuyan said until the intent to explore the many possibilities of agricultural insurance is formalized, the regulator is not in a position to disclose the proponent.

Agricultural insurance is effectively a subsidized commodity at the moment as the PCIC lords over an industry that has thus far evaded private interest.

Thus far there are only two entities offering so-called parametric insurance, a form of risk insurance in which a predetermined event such as floods, typhoons or even droughts “trigger” the payment of risk benefits on the prudent agricultural entrepreneur or business entity.