Weather-based insurance for product launched
THE Bankers Assurance Corporation (BAC) recently rolled-out a weather-based insurance product to help ease loan defaults by borrowers whenever natural calamities occur.
Called the Weather Index Insurance-Credit Asenso, this product will help rural banks, nongovernment organizations (NGOs) and micro-insurance financial institutions (MFIs) to cope with the effects of typhoons or floods on the low income sector.
BAC President Joel T. Almagro noted that over the past several years, the Philippines has been visited by very strong typhoons and floods that have ravaged large tracts of lands all over the country and these extreme weather conditions caused high loan defaults, especially among the low income sector.
“Micro-financing institutions catering to the low-income sector are the most at risk at experiencing bad loans. As much as 70% of these defaults are due to the occurrence of natural calamities,” Almagro said.
He explained that Credit Asenso, which offers lending institutions security for their operation or loan portfolio, uses a state-of-the-art satellite technology that determines event triggers for rainfall and windspeed.
This technology ensures that claims are determined on a real time basis or can be viewed online, thus doing away with lengthy and time consuming claims investigations and loss adjustments.
Weather Index Insurance–Credit Asenso is a product developed by BAC, a member of the Malayan Group of Insurance companies, and international partners DHI, a leading forecast and real-time modelling of extreme weather events institution, and Munich RE, one of the world’s largest and leading risk carriers.
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