Insurance Commission cites need for coverage against terrorism

The Insurance Commission (IC) on Wednesday renewed its call on the need for insurance against acts of terrorism, following the Marawi seize and the recent attack in Spain by terrorists.

The Insurance Commission (IC) on Wednesday renewed its call on the need for insurance against acts of terrorism, following the Marawi seize and the recent attack in Spain by terrorists.

Insurance Commissioner Dennis B. Funa also urged the insurance industry to develop products to mitigate such risks, as he emphasized the need to have insurance cover against terrorism.

“In the light of the continuing risk of terrorist attacks, it is important that the public is protected against losses and damages resulting from terrorist attacks. Since the 9/11 attacks, terroris- insurance industry has grown exponentially. In the Philippine setting, however, it was only recently that a product has been approved which covers losses as a direct result of a terrorist act,” Funa said.

The IC chief added that, at present, the only company offering a terrorism insurance cover in the Philippines is FWD Life Insurance Corp. (FWD Life).

“While existing insurance products specifically exclude death and disability claims arising from terrorist attacks, FWD Life developed a product that specifically covers this risk,” he added.

Funa said the product developed by FWD Life is the first of its kind in the country, which provides a financial-protection component in the event of death or serious injury stemming from circumstances, such as a terrorist attack.

“Terrorism is one of the major social issues in our country. Considering that terrorism is an indiscriminate attack, any person is exposed to the risk of incurring loss to life, limbs and property. This leaves a significant gap between the likelihood of terrorist attack and the risk we are exposed to upon the happening of such attack,” he said.

In trying to address the gap, Funa urged insurance companies to develop products that will afford protection against losses and damages as a result of acts of terrorism.

“Considering that the Philippines is considered as high-risk country in terms of likelihood of terrorism attack, we encourage insurance companies to develop life and nonlife-insurance products that specifically cover losses and damages resulting from acts of terrorism,” Funa added.

Earlier in the month, the IC reported an 11.15-percent increase in premium income in the first six months of the year to P117.29 billion, due to the strong performance of the life, nonlife and mutual-benefit associations.

Funa said the growth was due to the sale of traditional and variable life-insurance products, which posted growth of 3.05 percent and 13.69 percent, respectively.

In the first half of 2016, the insurance sector reported a 9.11-percent decline in premium income to P105.52 billion, from P116.11 billion in the same period in 2015.The insurance industry’s total net worth stood P310.74 billion in the first six months this year, up 18.37 percent, from P262.51 billion in 2016.

By: Rea Cu

SourceBusiness Mirror