FOR now, the Philippines has the smallest insurance market among member-countries of the Asean 5, despite having the second largest population.
This was observed in a recent study of the United States Agency for International Development (USAID), which valued the Philippines’ life insurance market at $16.6 billion in assets and $3.8 billion in premium earnings.
For Sun Life Financial Philippines Chief Marketing Officer Mylene D. Lopa, the figures reflect the economic conditions of the Philippines compared to that of the four other countries studied: Indonesia, Malaysia, Singapore, and Thailand.
“The economy plays a part. As the disposable income of the population increases, that’s the only time people can afford insurance,” Lopa said in an interview last Saturday, at the sidelines of Sun Life’s Wealth and Health Forum at the Radisson Blu Hotel.
“Unfortunately, insurance, although it is a need, is not perceived that way,” Lopa said.
Less than three percent of over 100 million Filipinos have personal insurance. This only grows to 18 percent if the coverage of insurance is extended to those provided by the employers to their employees, Lopa said.
She added that culture may also be a factor in explaining why the country’s insurance market remains small.
“Maybe we’re not very long-term thinkers. There might be some cultures that are long-term planners,” Lopa said.
Among the Asean 5, Singapore had the largest life insurance market valued at $132.8 billion worth of assets and $16.8 billion premium earnings. Market penetration is at 5.9 percent, while insurance density is at $2,388 per individual. Among the five it has the smallest population, at around 5.4 million.
In the Philippines, market penetration is at 1.7 percent with insurance density, or the average spending of each individual on insurance, at $41 per individual. Among the five, only Indonesia, with 240 million, has a larger population than the Philippines.
The Philippines also has the smallest market, for now, for the non-life insurance segment, valued at $3.4 billion in assets and $1.3 billion in premium earnings. This segment is led by Thailand (population: 64 million) which had the biggest assets at $15.8 billion.
While this is the case, Lopa said that on the part of Canadian insurance firm Sun Life, its biggest market is the Philippines. “The
Philippines is our strongest market in terms of premium and number of clients,” the official said.
Sun Life is present in Hong Kong, Malaysia, Indonesia, Vietnam, China, India, and the Philippines, being one of the oldest offices of the company in Asia, running for 120 years.
Unlike in previous years, insurance in the Philippines today is already participated in by young professionals who are on the lookout for growing their money through mutual funds while also insuring themselves. In the insurance industry, these are called unit-linked products.