INSURANCE BOOST. View of Makati, the country's financial hub. The continued recovery of the domestic economy is seen as a boost to the growth of insurance penetration in the Philippines, stakeholders said on Friday (June 17, 2022). (PNA file photo)

MANlLA – Insurance penetration in the Philippines has been improving but challenges remain, thus, the need to further boost financial literacy, among others, stakeholders said.

At around 2 percent of gross domestic product (GDP) insurance penetration rate, Insurance Commissioner Dennis Funa, in a reply to questions from the Philippine News Agency (PNA) said on Friday the level of people with insurance coverage remains low compared to other jurisdictions in the Association of Southeast Asian Nations (Asean).

He, however, noted that “the insurance penetration rate has been increasing consistently and continuously over the years.”

“We are somewhere in the middle in the Asean rankings. The biggest hurdle is the growth of the middle-income sector which can easily afford the insurance premiums,” Funa said.

He said people from the low-income sector are not far behind because they can buy microinsurance, which, he said, “has also been growing over the years.”

Funa added that “financial literacy amongst Filipinos needs improvement” but also cited that “we have also seen significant improvements in this regard over the years.”

The government does not have a specific growth target for insurance penetration but has several programs such as financial literacy and the adoption of digital initiatives that will help increase the number of Filipinos who have insurance coverage, he said.

“The insurance sector in the country is vibrant. With an improved GDP, we will see further growth in the insurance sector,” Funa added.

Relatively, Insular Life (InLife) President and Chief Executive Officer Raoul Antonio E. Littaua said ideally insurance penetration of a country should be around the same growth as its domestic output, which for the Philippines is about 6 percent before the pandemic.

He cited the need to enhance financial literacy programs in the country and strengthen lessons even in schools.

“And because of the low level of penetration rate in the Philippines we have a lot of elbow room to grow,” he said.

Littaua added that Filipinos realize the need to have insurance coverage during a crisis, especially noting that since the virus-induced pandemic hit in 2020 InLife policyholders are paying their dues on time.

“They want to make sure that their policies are updated to prevent any issues in claiming for benefits if something happens to them,” he said.

In the first three months of 2022, he said individual claims total PHP682 million and the majority of these are for maturing benefits and anticipated endowments.

He said death claims during the three months amounted to PHP206.5 million for 543 policies, 261 of which are related to coronavirus disease 2019 (Covid-19). (PNA)