MANILA, Philippines—The life insurance sector expects to grow significantly this year, citing positive economic indicators suggesting an increase in demand for insurance products.
Mayo Jose Ongsingco, president of the Philippine Life Insurance Association Inc. (PLIA), said in a briefing Tuesday that the industry could post a 60-percent growth in first-year premiums (premiums for new policies) and 23-percent rise in total premiums.
The figures are the same as those actually posted in 2010.
“Based on what we’ve been hearing from the industry, this year’s growth would be close to that [seen] in 2010,” Ongsingco said.
He said the Philippines, like other emerging economies, could benefit from the fact that industrialized countries in the West were slow to recover from the latest global economic turmoil.
The Philippines has been attracting foreign portfolio investments, including the purchase insurance products, because of favorable growth projections.
“The weakening global economy would lead to higher foreign investment [flow to the Philippines], including investments in bonds and other securities,” Ongsingco said. “The fundamentals of the Philippine economy are also improving—inflation is in check, the [government’s budget] deficit is below targeted ceiling, and remittances continue to grow even with the unrest in the Middle East and North Africa.”
Currently, the penetration rate of insurance is still small in the Philippines, Ongsingco said. Insurance premiums being collected by the industry are equivalent to just 0.75 percent of the country’s gross domestic product.
He said the figure could substantially increase through the promotion of micro insurance, which are cheap insurance products for low-income earners, and the sale of products to more overseas Filipino workers.