Taking microinsurance education on the road in the Philippines

In 2010, the insurance landscape of the Philippines welcomed a transformation with the release of the National Strategy and the Regulatory Framework for Microinsurance, which paved the way for “insurance for the poor” to possibly replicate the successes of “finance for the poor”. According to the Economics Intelligence Unit survey of 2010, the Philippines’ microfinance sector is the second most thriving out of 54 countries. For the microinsurance sector to rise up to this standard, it would have to go through the birthing pains inflicted by some prevailing misconceptions about insurance and mistrust of the insurance industry in general.

That risk protection is the privilege of the better off and that insurance companies will cheat people out of their savings are just two of the prevailing misreadings stamped in many Filipinos. Many belonging to the poor segment of society may not have any knowledge of risk protection or insurance to even form misconceptions. This lack of awareness and the generally low financial literacy among the poor contributes to the low coverage of insurance in the Philippines, as is the case in most countries in the region and elsewhere.

Roadmap for Financial Literacy for Microinsurance

Correcting misconceptions and imprinting valuable ideas about risk protection, in general, and microinsurance, in particular, is a great feat achievable only through alliance rather than sole stewardship.

Hence, in 2011, the German International Cooperation Microinsurance Innovations Program for Social Security (GIZ-MIPSS), which is a member of the Microinsurance Network, partnered with the government of the Philippines, with support from the Asian Development Bank – Japan Fund for Poverty Reduction, to initiate the Roadmap for Financial Literacy for Microinsurance. Insurance associations and microinsurance providers also joined in this collaboration.

The roadmap strives to institutionalise financial literacy for microinsurance by delivering the appropriate advocacy messages to stakeholders whose behaviours can be swayed in favour of microinsurance through the most effective approaches. These stakeholders include legislators, government regulators, national agencies, local government units, insurance providers, intermediaries, support institutions, donors and other development partners and the clients.

The major vehicle for this roadmap has been the nationwide Financial Literacy for Microinsurance Roadshow and consists of a series of four-day capacity-building events in 16 regions across the country. The first three days are framed as a training on microinsurance advocacy, while the last day is an advocacy seminar open to the public.

The design of this inter-agency collaboration is grounded in the sustainability principle and goal of capacity-building, for which messages are position-based on behaviour and delivered through a complementation of mass-community-interpersonal media.

Zigzags and Roadblocks: Challenges to microinsurance education

Altering perceptions and behaviours is no easy task even with the concerted effort of both the public and private sectors. The microinsurance roadshow has certainly evolved through the bumps and detours along its journey.

Stimulating interest and securing balanced participation. As an outcome of public-private partnership, the training advocacy is offered for free to a limited number of participants. Even with a large list of invitees, the interest and commitment to participate has been hard to grab. An initial doubt of the opportunity offered can be dispelled through patient resolve to convince of the value of the training. Actual participation, however, can be unbalanced as representatives of microinsurance providers often outweigh participation of national and local government representatives. Developing advocates in the public sector can contribute in mainstreaming microinsurance awareness and knowledge.

Delineating the difference between advocating and marketing. The advocacy training participants come from a variety of backgrounds and hold various levels of knowledge about microinsurance, and even financial literacy. For those coming from local governments and development organisations, the advocacy principle of financial literacy and the link to the whole exercise of social development and poverty alleviation is clear. Representatives of the insurance industry, however, are slow to find their footing, having come from a business framework and seeing the training as an input to marketing capacities. The challenge lies with the resource persons in consistently and effectively delivering the message that the training is for advocacy and not for marketing.

Gap between microinsurance demand and supply. The microinsurance industry in the Philippines is still flourishing, with the major developments mostly emanating at the national level. The advocacy roadshow has brought light to the reality that access to microinsurance is hampered by the absence of providers at the local level. The financial literacy roadshow has given the opportunity to increase awareness about microinsurance but has also shed light on the nascence of suppliers on the ground – exactly where poverty incidence is highest. One prominent contribution of the roadshow is that of informing and encouraging service providers to either venture into microinsurance or convert their informal insurance-like programmes into formal microinsurance services.

Uncertainty of echoing the learnings from the training. One of the main goals of the roadshow is to create a critical mass of microinsurance advocates. There is, however, no guarantee that the knowledge acquired by the participants will be replicated after the event. While some participants express their intention of echoing the training in their respective organisations - and even of educating their friends and families about microinsurance, translating these intentions into actions cannot as yet be verified. A documentation design is currently in the works to revisit the participants, find out the spill-over effects from the trainings and identify any challenges they may have encountered in doing so.

The Long Road Ahead

The financial literacy on microinsurance roadshow is estimated to reach more than 2,000 people until the end of the initiative in August 2012. From now until then lies a long stretch of road, which the organisers will march on with an even stronger commitment, backed with the inspiration that the advocacy has spread the reach of microinsurance and helped those in need. A systematic approach to campaign organisation and conduct, coupled with a proactive encouragement of interest and participation from all stakeholders, will no doubt be strong driving forces in the journey ahead.

April 2012