Leading life insurer Pru Life UK released a policy paper called “InsurTech: Driving Broader Insurance Access,” giving a better understanding of how insurtech such as online shopping platforms can be used to broaden Filipinos’ access to life and health protection products.
Authored by leading law firm Romulo Mabanta Buenaventura Sayoc & de los Angeles, the policy paper reviews the current regulatory framework for the electronic commerce of insurance products and looks at how online shopping platforms can serve as insurance intermediaries. “The full potential of online shopping platforms has up to now not yet been maximized, likely because online shopping platforms are not insurance-specific. As InsurTech evolves the way of doing the insurance business, insurers need to keep up,” says Atty. Cynthia Del Castillo, Senior Partner and Head of the Capital Markets Practice at Romulo Mabanta Buenaventura Sayoc & de los Angeles.
“It is our purpose at Pru Life UK to help Filipinos get the most out of life. We are inspired to lead the discussions and concerted initiatives with many like-minded partners to leverage mobile and online apps and platforms to drive up financial/insurance awareness, literacy, and inclusion to help many more Filipino families in the country,” shares Pru Life UK President and CEO Eng Teng Wong.
The key recommendation of the paper is for the Insurance Commission to consider allowing online shopping platforms, including electronic wallets that are serving as e-commerce platforms, to act as an “intermediary” for the sale and distribution of insurance products, including investment-linked insurance products, under a three-tiered classification of intermediaries as follows:
- Those that provide advice and client servicing such as insurance agents and brokers;
- Those that provide advice but not client servicing, but require a degree of knowledge of insurance products such as online insurance aggregators; and
- Those that merely provide a platform that connects the insurer and the consumer for online distribution of insurance products, and do not provide advice and / or client servicing such as online shopping platforms, online marketplaces and e-wallets.
“Digitalization has accelerated almost every aspect of our lives. However, the insurance penetration in the Philippines as a percentage of the national Gross Domestic Product (GDP) is less than 2 percent. This is amongst the lowest in Asia. By harnessing the combined strengths of financial advisor workforce and the power of mobile and online apps and platforms, we can quickly broaden the reach and accessibility to many more affordable life and health insurance solutions, including investment-linked plans,” shares Wong.
Wong is also FinTech Alliance Philippines’ Insurtech Committee Chairman leading the organization’s role in engaging, building, and expanding a sustainable digital finance ecosystem.
FinTech Alliance Philippines, the country’s leading and largest digital trade organization supports Pru Life UK’s policy paper on how insurtech can bring innovation to the insurance sector and impact the regulatory practices of insurance markets.