State-run Philippine Crop Insurance Corp.’s approach to agricultural insurance neither provides value for money to taxpayers nor adequate protection to farmers, according to a recent study conducted by the World Bank.
The PCIC is also “very exposed to catastrophe losses which are not reinsured,” said the study done by a team from the WB’s Disaster Risk Financing and Insurance Program.
The study revealed that while premium subsidies given by the government to the PCIC grew rapidly over the years, agricultural insurance only reached a third of the country’s farmers and was not well-targeted to ensure that taxpayers were getting value for their money.
An overview of the WB study was presented recently by Benedikt Signer, a senior financial sector specialist of the DRFIP, to the board of the PCIC chaired by Finance Secretary Carlos Dominguez III.
Signer said the study found that PCIC’s premium rating, capital management, financial reporting and other aspects of its operations were not in line with international best practices.