In a country where insurance penetration rate is low, there is one product that offers affordable coverage for various risks.
Patrick Bí¼hler, group chief executive officer and founder of discovermarket, said in an interview microinsurance, as an affordable and personalized coverage, is a crucial shield for low-income households with limited financial resources.
Bí¼hler said microinsurance products, which cover risks such as death, injury, property damage, and crop loss remain affordable, costing no more than 7.5 percent of the minimum wage in Metro Manila.
This means microinsurance can provide security to the less fortunate and fresh graduates who are just starting their careers.
According to Bí¼hler, the growth of microinsurance presents significant opportunities to increase the insurance penetration rate in the Philippines, where 3 out of 5 Filipinos lack access to medical insurance.
In 2023, microinsurance covered 56.62 million lives with premiums totaling $240 million, marking a 17.35 percent increase from the previous year.
Bí¼hler said this is at least on par with the global microinsurance trend of 6.70 percent compounded annual growth rate during the forecast period 2022 to 2029.
Similar to Indonesia which is also a country of interest to international insurtech firm discovermarket, the Philippine faces several gaps in growing microinsurance: consumer awareness, affordability, integration, trust and transparency.
“Addressing these gaps can make insurance more accessible, affordable, and tailored to the needs of consumers, given the rapid adoption of smartphones in both countries, ultimately driving higher adoption rates and better protection for all,” Bí¼hler said.
As traditional insurance is still more well-known, Bí¼hler said microinsurance’s biggest hurdle is the lack of awareness of the people whom it is created for as it is difficult to market.
discovermarket has been at the forefront in bridging the protection gap for the underserved, by providing trusted brands a marketplace platform that connects them with insurers and brokers to tailor and offer embedded insurance to their end-customers.
Based in Switzerland with its regional headquarters for Southeast Asia in Singapore, discovermarket provides embedded insurance solutions to over 200 million customers across diverse industries — including hospitality, agriculture, and telecommunication.
discovermarket’s strategy modernizes insurance by partnering with trusted Filipino brands in sectors like telecommunications, hospitality and agriculture.
“We provide these protections as embedded products, enhancing their value and market differentiation while bringing protection closer to customers. From the consumer’s perspective, this integration simplifies the entire application process by eliminating lengthy assessments, hefty premiums,
and personal data disclosure. We believe insurance should be seamlessly tailored and delivered at the point of purchase, allowing individuals to enjoy life with peace of mind, knowing their needs are effortlessly met,” Bí¼hler said.
He added: “Our goal is to bring the relevant protection that suits the needs of the people.
For example, with cyber crimes on the rise in the Philippines, we found an opportunity to partner with Globe Telecom to provide an embedded cyber protection product at the point when customers subscribe for their postpaid plans, to ensure they have a form of protection from data breaches and cyberattacks.”
Bí¼hler said embedded microinsurance products are not just a solution but a paradigm shift, offering new possibilities in addressing the protection gap but also having the potential to reshape industries, offering new avenues for protection coverage and empowering individuals and businesses alike.
“We see embedded micro insurance products on digital platforms, such as websites and applications as the most efficient means to make protection simpler and seamless.
Embedded insurance involves partnering with non-insurance brands to offer coverage through channels like e-commerce checkouts or telecom postpaid plans, with the aim to seamlessly integrate insurance into daily life and address protection gaps. Despite being in its nascent stage, globally, it represents a significant growth opportunity, potentially unlocking $5 trillion in insurance distribution through non-traditional channels over the next decade.
Bí¼hler said by simplifying the insurance purchase process and offering them as embedded insurance through the most-trusted, brands can contribute to the growth of microinsurance in the Philippines.
“We believe that this modern insurance model will help in bridging the protection gap of the unbanked and underserved,” he said.
discovermarket partnered with leading broker Philinsure and telecom giant Globe to tackle cyber threats by providing cybercrime protection for retail customers. Together with Philinsure, discovermarket also partnered with J6W, the Philippines’ technology provider for bus operations, to offer personal accident protection to bus passengers at the point of booking.
Other types of the most popular microinsurance products discovermarket looks to explore and provide are home content, device protection and cyber retail microinsurance.
Traditional insurers often struggle with relevance, accessibility, affordability, and trust due to their detached distribution methods and one-size-fits-all products. These left customers wondering whether and when a claim would be paid out.
Bí¼hler said embedded micro insurance has the unique opportunity to ensure and build a new level of trust and relevance to the customers.
“In our case, we do not use any customers’ personally identifiable information (PII) data Instead, we strive to define an insurance product that fits the customer in use-cases and previously unavailable scenarios, all while respecting their privacy,” he added.
At discovermarket, the process of education involves sharing the following key benefits: flexibility and simplicity, enhanced accessibility, and building trust and transparency.
Bí¼hler said affordability and accessibility are among the biggest challenges in the insurance industry. Insurtech, by leveraging cutting-edge technologies such as automation, artificial intelligence, and data analytics, can significantly reduce operational costs and enhance efficiency in processes like underwriting and claims processing. This minimizes manual intervention, reduces overhead expenses, and ultimately lowers costs for consumers.
“At discovermarket, our competitive edge goes beyond business strategy–it’s a commitment to fostering a fair and competitive insurance market. Our marketplace-as-a-service model enables us to identify and collaborate with the best partners, empowering trusted brands to offer protection to their customers. By leveraging competition among insurers, we can secure the best market pricing, providing all stakeholders reassurance and confidence,” Bí¼hler said.
