Less than 5pc insured: Bakani

LESS than five per cent of the population in Papua New Guinea is insured, says Bank of PNG Governor Loi Bakani.
Bakani said this was due to a reliance on the wantok system, a lack of awareness and financial ignorance.
“Insurance in PNG has some constraints because of the wantok system,” he said.
“But with growing number of nuclear families (and the middle class), a lot of people are getting more independent.
“They are realising that there is too much pressure on one person.
“Depending only on your relatives isn’t reliable and people need to look at modern insurance products as a safety net.”
Country lead of United Nations Capital Development Fund (UNCDF) Jagdeep Dahiya said urgent intervention was needed.
“What will make a huge difference is the awareness level of people, accessibility to the insurance products, the policy environment and the willingness of the players to go the extra mile,” he said.
“There needs to be greater innovation, both on the product aspect and the service from the Insurance providers.”
The Centre for Excellence in Financial Inclusion (Cefi) is working towards increasing the negligible 660,000 active insurance policies to 1.5 million in a five-year timeframe.
Cefi executive director Saliya Ranasinghe said in the initial stages, the Government needed to look at subsidising insurance premiums so that the masses could be reached.
“Until we reach a substantial number of people, the cost of insurance will always be an issue,” he said.
“If we increase the insurance coverage amongst the population, the cost of the premiums per person will automatically go down.”