Challenges

MicroBiz Protek addressed the lack of insurance for MSMEs in a country highly exposed to extreme weather events and natural disasters including earthquake, volcanic eruption that lead to the disruption of business operations, loss of income, or worse, loss of assets.

Primary target

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Description of Innovation

MicroBiz Protek Jr is AXA Philippines' first microinsurance product licensed by the Insurance Commission. It is a cash assistance provided to MSMEs in case of property damage by typhoons, fire, lightning, earthquake, and flooding due to natural causes. It also provides personal accident insurance to the owner of the insured business including one named employee. It provides protection against robbery. The MicroBiz Protek application is simplified and requires the location of the property, information on the building structure, the amount of coverage applied for, details of insured owner and employee, and copy of the insured property along with a Government-issued identification and three signature specimen. MicroBiz Protek provides option for electronic applications. Microinsurance product for MSMEs licensed by the Philippines Insurance Commission.

Results

The nationwide roll-out of MicroBiz Protek Jr was affected by the COVID 19 pandemic lockdowns that slowed down MSME operations and economic activity. MicroBiz Protek Jr targets almost a million businesses, particularly microenterprises that represent 89% of businesses in the Philippines, with 21% found in the National Capital Region. MSMEs provide 62% of the total jobs in the country with microenterprises providing 30% of this share.

Lessons Learnt

These are the lessons learnt in the development and distribution of MicroBiz Protek Jr:

1. The uptake of MicroBiz Protek Jr by MSMEs increased after a partnership with Local Government Units that offered training or other financial services like start-up capital for low income entrepreneurs.

2. Financial Literacy on the importance and use of insurance against climate and disaster risk became more relevant to MSMEs when it was conducted alongside other related activities including capacity development on mitigation against disasters and access to loans.

3. Insurers in the Philippines need more incentive to enter the climate and disaster risk insurance market given the significant impact of disasters to their portfolios, including those exacerbated by climate change.

4. Climate and Disaster Risk Insurance (CDRI) products offered to MSMEs has to be based on market studies and need to balance between coverage, features, price and ease of enrolment to convince MSMEs to avail.

5. Selected Distribution Channels need to be constant touch points where MSMEs access other services or training other than insurance.

Strong support of the public sector partner, the Department of Trade and Industry and the MSME Development Council which issued Administrative Orders to Provincial level offices mandating them to advocate access to MicroBiz Protek Jr.