Understanding insurance refers to the four most common types: life, health, auto, and long-term disability. While awareness of insurance importance is increasing, the aforementioned traditional insurance products fail to resonate with many people for various reasons, including affordability, accessibility, and relevance. These factors have largely contributed to the low insurance penetration in the Philippines, which stands at 1.68% as of September 2023.
This is where microinsurance is changing the game as insurtechs and insurance companies have introduced personalized microinsurance products that cater directly to Filipinos' unique lifestyles and needs as they go through various stages of their lives. As an insurtech, Igloo and its partners have facilitated various microinsurance products that safeguard the unique needs of digital natives and underserved sectors. These products run the gamut from travel insurance, to electronics protection, e-commerce purchase protection, and even protection for the gamers’ health.
“While traditional insurance products may have high premiums and broad coverage, microinsurance products are designed to provide targeted protection against specific risks relevant to our daily lives. By offering affordable products that address immediate needs, microinsurance can serve as the gateway to broader insurance protection and may be key to boosting insurance penetration,” said Roberto Vea, Commercial Lead at Igloo Philippines.
Among the most popular insurance products Igloo PH and its partners facilitated are Gadget Protection and Online Shopping Protection. In 2023, Gadget Protection sold 10.3 million policies while Online Shopping Protection sold 1.98 million, highlighting strong customer demand for coverage against electronic device damages and online purchase risks.
“Microinsurance empowers individuals to protect themselves against risks they face today, whether it's safeguarding their electronics from liquid damage or ensuring affordable coverage for spontaneous travel adventures. At Igloo, we believe it’s important for insurers and insurtechs like ourselves to continuously develop relevant products and make sense for our customers,” Mario added.
As of September 2023, microinsurance premiums in the Philippines have increased by 19.6% to P10.16 billion, and over 56 million Filipinos are now insured under microinsurance policies.
“The growth of the microinsurance industry underscores how the approach to insurance awareness is no longer one size fits all–it must evolve alongside our digital-first lifestyles, safeguarding our ever-expanding virtual assets and providing peace of mind in the face of modern risks,” Vea explained. “This also means ensuring that the products are where our consumers are–online, thus making sure that the entire buyer’s journey from consideration to purchase and claims must be easy, accessible, and uncomplicated.”
According to a recent study conducted by Manulife, 41% of Gen Z individuals (aged 18-24, according to McKinsey) plan to purchase insurance online in the next 12 months. Furthermore, the study found that 33% of millennials (aged 25-44) have already bought insurance online. This indicates that younger generations are increasingly preferring and adopting online channels for purchasing insurance.
This is where the availability of embedded insurance expanded the distribution channels, providing consumers with a convenient way to discover, evaluate, and purchase products in just a few clicks. Igloo does this through partnerships with major e-commerce platforms like Lazada and Shopee, leading payment platforms like DANA in Indonesia and GCash in the Philippines, and retail chains like Circle K in Vietnam.
“As Igloo continues to play a vital role in making microinsurance accessible to millions of Filipinos, we remain committed to prioritizing products that raise insurance awareness and adoption and are relevant, innovative, and customer-centric,” Vea concluded.
Learn more about how Igloo’s tailored microinsurance solutions by visiting iglooinsure.com.
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