MicroEnsure, Malayan launch crop insurance

A global insurance intermediary for the poor expects to generate P5 million to P7 million in premiums from farmers who will avail of insurance aimed to mitigate impact of natural disasters and climate change. William Martirez, MicroEnsure country manager to the Philippines, said the world’s first weather index typhoon insurance was initially launched to 1,000 farmers in Panay Island in May. “We expect those farmers will renew. We are entering the second cropping season come September. We may be able to increase more and cover 2,000 to 3,000 farmers by yearend," he said. He believed the weather index-based crop insurance is “very ideal" for the Philippines, which has the highest typhoon risk with 24 to 28 typhoons a year. "If we pilot it here and we are highly successful, we can introduce it worldwide. Typhoon risk is a unique phenomenon in the Asia-Pacific region," he said. Yuchengco-led Malayan Insurance Co. Inc. is the underwriter and Paris Re is the reinsurer. “Our main role here is to assume the risks. MicroEnsure markets the product," Malayan Insurance vice president Enofre G. Manuel said. As climate change is threatening food security, Manuel said famers need insurance protection to cope with the impact of severe weather events. Based on the MicroEnsure website, farms covered need to be within two kilometers of a known global positioning system (GPS) location while actual payouts are based on the proximity of farm to the center of the typhoon's path and the wind speed at the location. The Japanese Meteorological Authority provides real time data, which is available on the Internet. “We don’t assess the damage in the field anymore. It is automatically presumed there is damage because of wind speed. There is no moral hazard as claims are concerned because it is automatically calculated. All farmers in that area will have the same payout," Martirez said. MicroEnsure is also in talks with big agricultural companies mulling insurance protection. Its team is now working in the Luzon area and targeting portions in the Caraga region. “If there are five typhoons in one planting season, we have to pay out within 10 days for every typhoon so the farmers can turnaround immediately," Martirez said.-Ruby Anne M. Rubio, GMANews.TV