IC eyes higher penetration with takaful, microinsurance push

THE INSURANCE COMMISSION (IC) is stepping up efforts to raise insurance penetration in the Philippines by approving more Islamic insurance (takaful) products and promoting microinsurance to reach underserved sectors.

Insurance Commissioner Reynaldo A. Regalado said penetration, measured as premiums relative to economic output, rose to 1.78% in 2025 from 1.67% a year earlier, but a “big gap” remains.

“We’ve been targeting this for decades — surpassing the 2% [penetration rate],” he told reporters on Friday. “There’s still a big gap that we should be addressing.”

The regulator has approved six takaful products from four insurers — Etiqa Life & General Assurance Philippines, Pru Life Insurance Corp. of UK Philippines, Stronghold Insurance and CARD Mutual Benefit Association, which will offer a micro-takaful product.

Takaful is a Shari’ah-compliant insurance model in which members contribute to a shared pool to cover losses collectively, avoiding interest, gambling and excessive uncertainty.

Operators manage the funds, charging fees for sales, underwriting and claim administration. The IC issued takaful licenses to Pru Life UK and Etiqa in 2024.

Mr. Regalado said the IC is also encouraging the industry to offer more microinsurance products, particularly through cooperatives and mutual benefit associations, since life insurers often avoid microinsurance due to small margins. Microinsurance is very effective for financial inclusion, he pointed out.

To expand its reach, the IC is strengthening regional offices in Cebu and Davao and will open a Baguio office on March 2.

Meanwhile, the regulator is reviewing insurance policies frozen by the Anti-Money Laundering Council (AMLC) over links to the flood control scandal. AMLC last week froze 10 more policies, adding to 394 accounts worth P490 million already frozen.

The IC is also set to implement three circulars this year: adjustments to compulsory motor vehicle liability insurance premiums, final coverage rates for electric and hybrid vehicles and premium and benefit rates for passenger personal accident insurance for motorcycle taxis.

Mr. Regalado said the motor vehicle premium revisions aim to update rates set in 2006, increase third-party liability to P400,000 and expand benefits per incident. Premium rates for motorcycle taxis are awaiting approval from the Land Transportation Franchising and Regulatory Board. Coverage for electric and hybrid vehicles is still under review amid rising battery costs. — Aaron Michael C. Sy