AS pandemic hit our country’s economy last year, not a few companies and industries experienced either degrowth, slow down, and even closure. We can only count with our fingers in one hand those who managed to perform well in 2020.
It’s good to note that one of the few sectors that did well last year is the life insurance industry. In a no-growth environment, the industry posted a 5.9% growth in total premiums (from new and renewal premiums). I consider this as good news because it means that more Filipinos are now protected or continue to be protected from unexpected life risks.
This comes as a surprise to many as insurance is not always on the priority list of most Filipinos. Most often than not, insurance is set aside or bumped off in favor of other items. What then accounts for this growth performance of the industry? From what I gathered during a separate interview with the IC Commissioner Dennis Funa and the PLIA (Philippine Life Insurance Association) President Benedict Sison, I say it’s a function of both the insuring public and the insurance industry.
Even prior to the pandemic, there is already an observed increase in the awareness of the Filipinos on health and wellness. More Filipinos are getting more conscious of their health and well-being, paying closer attention to what they eat, their number of steps and the number of calories burned. This somehow led some of them to appreciate the whole health and wellness space to include medical and protection coverages.
But this health crisis we are in, increased by several notches the public’s awareness and appreciation of the medical, savings, and protection products, as people saw how the pandemic not only impacted our health but our finances, as well. Many were caught financially unprepared when lockdowns were implemented. Suddenly, people were conscious about their savings and insurance coverages, worried if they have enough. Those who have none, started to search and research about it and got themselves insured. As shared by Comm Funa, the popular search engine Google, reported a substantial increase in the number of searches on medical and life insurance companies and products since the onset of the pandemic. On the other hand, those who already owned a policy were upgrading their coverages and making sure that their premium payments are up-to-date.
It’s also worth taking note that more and more young people are appreciating the importance and value of getting financially prepared and independent. Without prodding from their parents, our Gen Ys and Zs are getting their own medical and life insurance program. Their easy access to data and information is allowing them to make more informed and sound decisions for and by themselves.
This shift towards insurance products is also influenced by the slowdown in the purchase of consumer goods brought about by the lockdowns and quarantines. People are spending less on shopping, eat-outs, travel, entertainment, and gimmicks. Whatever extra money they have is now earmarked for their mid and long-term savings and insurance requirements. Things that matter most, as they are now realizing.
The insurance industry on its part is making sure that they are ready to respond and support this heightened consciousness and interest among the insuring public.
It’s good to know that the Insurance Commission through Comm Funa and the CEOs of the different life insurance companies through PLIA, are working hand-in-hand to ensure that there will be minimal business disruptions and they can continue to serve their customers, employees, and distribution during the pandemic. Because of their close coordination and collaboration, they were able to quickly address the initial challenges faced by the industry.
Right at the onset of the pandemic, they made successful representation to the government to have those from the insurance sector classified as essential economic workers. This enabled the companies to maintain even a skeletal force and continue to cater to the servicing requirements of their customers. Because of this, medical and death claims and other related concerns of policyholders continued to be serviced and processed.
Second, realizing that face-to-face selling will be a big concern due to the quarantines, both parties were quick to fully tap and maximize the digital technology. To ensure that insurance products remain to be accessible to the public despite the quarantines, the Insurance Commission immediately approved the recommendation of the life companies to allow remote selling thru digital platforms. Almost all companies have provided their salespeople with digitally-aid sales tools so they can do remote transactions with their clients. As a result, while in the comfort of their homes, clients can continue to be covered and protected while financial advisors can continue to earn their living. Furthermore, a number of the life companies’ after-sales servicing functions were also migrated to digital platforms so clients can have the option to do their transactions via online or branch visit. As Mr. Sison puts it, “Our message to the public is clear, we remain constantly accessible even amidst the pandemic”.
Also, to support the recruitment efforts by the insurance companies, IC introduced online licensing exams for would-be financial advisors. Comm Funa shared that the industry is the first among the different government licensing agencies to introduce online exams. Though this is still far from being perfect, it is already a welcome initiative as the industry aims to help solve the unemployment problem in the country by recruiting more into its current pool of financial advisors.
And the better news is that both the remote selling and the online exams will already be permanent platforms even after the pandemic.
The insurance companies, on the other hand, are also working on the introduction of more medical and life insurance plans that will cover covid-related illnesses and deaths. Though we may already be vaccinated, knowing that you are covered by an insurance plan, in case of, will give you another layer of peace of mind.
Clearly, when all the stakeholders are united in their goals and are willing to work with each other, a lot can be done for the betterment of everyone. This is what the IC and the private life companies were able to demonstrate. The pandemic did not deter them but instead, it further strengthened the unity and collaboration between a government agency and the private sector, benefitting the employee and agency force and most importantly, the insuring public, who is now doing a more pro-active role in being financially literate and independent.
With only a very small percentage of our population having adequate medical and life insurance, we need all these wins. We are glad to know that despite a challenging environment, the life insurance industry is able to adjust, adapt and thrive. Kudos to the men and women of the industry! Let’s be mindful that when the life insurance industry thrives, it directly translates to more Filipinos being financially prepared from these unexpected risks. Now, who wouldn’t like that?