MILK Brief #17: Doing the Math - Calamity Microinsurance in the Philippines

The MILK project partnered with MicroEnsure and TSKI to better understand the value of the calamity insurance for TSKI’s clients who made claims on this insurance after this devastating event. We found that aid and government support was made available to most respondents in our study, but was minimal compared to their needs. The support of friends and family was also limited. The need for an additional and efficient source of funds was evident, and the TSKI product played a crucial role in filling this gap. Long delays (averaging 42 days) did reduce the overall value of the product, leading clients to use more inefficient financing strategies for upfront costs in the meantime. However, the knowledge that the insurance benefit was forthcoming may have helped clients access other sources of funds, including low-cost loans from friends and family, which the uninsured did not access to the same degree. Trusting that the payment would arrive, insured families were also less likely than the uninsured to deplete their savings to cover the costs of repairs, preferring instead to reduce their spending while they waited for the payment. Once received, the product played an important role in helping the insured to recover.