By Joann Santiago
MANILA, July 31 (PNA) — Insurance products were previously only for the rich due to several factors like expensive premiums and peoples’ little knowledge on these products.
However, times have changed because of introduction of more affordable products as well as the government’s financial education program, which include topics on micro-insurance.
Insurance Commissioner Emmanuel Dooc, in a briefing Friday, said insurance penetration rate in the Philippines has exceeded the agency’s target to have 20 million Filipino policy holders by 2020.
As of end-June 2015, penetration rate in the country has increased to 1.84 percent of the 100 million population as against the 1.78 percent in end-2013.
”By 2019, we should approximate by ASEAN average of about three percent,” Dooc said.
The IC chief admits that increasing insurance penetration rate is difficult due to several factors such as faster domestic growth and the looming economic integration in the region.
He, however, said that more Filipinos now have the capacity to buy insurance products in line with the improvement in domestic economy and because of micro-insurance.
”People now have more savings, more buying capacity so they can now afford to buy insurance products,” he said.
IC data show that because of micro-insurance market penetration rate, which is the rate per individual over total population, hit 14 percent in 2009 and covered about 12.8 million individuals.
In end-2014, it further rose to 34.27 percent and covered about 34 million individuals.
”My forecast is if our micro-insurance (industry) will continue to grow easily we can hit 40 percent with life insurance cover of about 41 million Filipinos (by 2019),” he added.
Earlier, Dooc projected a Php240-250 billion insurance premium income by end-2015 and Php500-billion by 2019.
He based his “fearless forecast” to the industry’s average growth of about 20-25 percent in recent years.
”We have three years to go. It’s achievable to get half a trillion,” he said citing that this level is a big jump from the about Php80 billion in end-2009.
Last year, the industry ended the year with total premiums of Php188.96 billion, a drop of 4.63 percent from the record-high Php198.13 billion in the previous year after the central bank’s policy-making Monetary Board (MB) directed the review of banks’ cross selling activities, thus, prevented banks that have partnered with insurance companies to offer new products.
However, at the end of the first quarter of 2015, the insurance industry registered total premiums amounting to Php56.29 billion, up 45.53 percent from year-ago’s Php38.7 billion.
”People have come to realize the need for insurance cover,” he said attributing this not only to improvement of the economy and peoples’ financial knowledge but also to the increase of catastrophes that hit the country in recent years. (PNA)