Agricultural Insurance in the Philippines: Innovative Product Development and Scale-Up Amid Climate Risks and Other Hazards

Norman R. Cajucom*

Philippine Crop Insurance Corporation


The Philippines, an archipelago situated in the Pacific Ring of Fire and the typhoon belt, is highly vulnerable to natural disasters. The continued global warming experienced in the country in the past years shows a trend of climate changes that have caused casualties and losses in agriculture and properties. One of the solutions to address the negative effects of climate change is agricultural insurance. The Philippine Crop Insurance Corporation (PCIC) is a government institution that has served as the country’s sole provider of traditional crop insurance since 1981. However, because of PCIC’s limited resources, the private sector’s participation in the agricultural insurance business is necessary to increase the number of farmers, fisherfolk, and other stakeholders protected with insurance. The issuance of rules and regulations for private agricultural insurance operations and the formation of a Public-Private Partnership composed of the PCIC and private insurance companies are vital strategies to scale-up agricultural insurance business in the country. Further, to improve the agricultural insurance program, innovative/index-based agricultural insurance products, such as Weather Index-Based Insurance (WIBI) and Area-Based Yield Index Insurance (ARBY), have been developed and piloted with funding from donor agencies. New products such as the Yield Insurance Products for High-Value Crops (a hybrid of traditional, ARBY, and WIBI schemes), initially for coconut, coffee, and cacao crops could enable the PCIC and private insurers to provide insurance services at lesser loss adjustment cost and with a faster settlement of claims. Challenges to a successful and sustainable implementation of the new products need to be met, namely the (1) development of the required data infrastructure; (2) acquisition of advanced weather equipment and technologies for crop modeling and experimentation; and (3) collaboration with government research institutions and state colleges and universities to undertake science-based modeling and experimentation for the development of various weather indices/parametric for crops, fisheries/aquaculture, and livestock. Further measures to strengthen the existing agricultural insurance program include (1) integrating plans for agricultural insurance in the development and implementation plans of all concerned government institutions involved in agriculture, fisheries, and forestry sectors and (2) organizing small farmers and fisherfolk to undertake collective farming and business activities as they cannot cope with rapid changes in climate on their own that affect their livelihood.

*Former Senior Vice-President, PCIC; email address: