The Philippine Insurers and Reinsurers Association (PIRA) seeks lower taxes for non-life protection to help Filipinos become more financially secure, especially agricultural workers and other lower-income earners.
In a recent media briefing by PIRA members, Malayan Insurance Chief Operating Officer Denden Tesoro said non-life insurers are charged a 27.5 percent tax. She added that companies hope the tax will be reduced to 20 percent in the near to medium term.
This is still much higher than the 8 percent tax in some countries in Southeast Asia, PIRA Executive Director Michael Rellosa said.
He said the government can lower taxes on non-life insurers to initially reduce prices for poorer groups, like farmers, while freeing up some government funds for other critical public services.
"We're here to help share the burden. If we create a pool, if the private sector writes agri-insurance, maybe we can pull down the risks and the rates," he said.
Tesoro added that non-life insurers are interested in diversifying their products beyond auto, property insurance, and cybersecurity to ensure minimal profit losses.
"I'm sure many of the private companies would like to try offering products to the agriculture sector. We'd like to spread the risk. That's a whole idea of insurance because there could be one bad year," she said.
Rellosa said PIRA continues to discuss with government agencies the challenges faced by non-life insurers in crafting the Passive Income and Financial Intermediary Taxation Act under the government's fourth package of the Comprehensive Tax Reform Program.
He added that PIRA is exploring other ways to help the less privileged become insured, such as becoming a reinsurer of the state-owned Philippine Crop Insurance Corporation or providing a substantial portion of funds to more profitable agriculture sub-sectors to balance non-life portfolios. Companies tend not to develop agricultural insurance products due to farm production's unpredictable revenues, which depend on weather conditions.
"There are profitable areas like livestock insurance which could increase interest in agriculture insurance," Rellosa said.
According to PIRA, the acquisition of non-life insurance remains low in the country at 0.4 percent penetration rate.