MANILA, Philippines - The head of the Insurance Commission wants to boost the penetration rate of insurance in the Philippines to three percent of gross domestic product to improve the country’s position vis-à -vis its Asian neighbors.
During the signing of a memorandum of agreement creating the Financial Stability Coordination Council yesterday, Insurance Commissioner Emmanuel Dooc said positive demographic changes augur well for the local insurance industry and should help increase the sector’s penetration rate.
Insurance penetration rate has steadily increased in the past five years from only 1.02 percent in 2009 to 1.9 percent in the first nine months of 2013. The steady growth was attributed to the introduction of new products and channels of distribution as well as the improving microinsurance industry.
“I would be happy if we could increase this to three percent to be at par with neighboring countries,†Dooc said.
Dooc admitted it would be difficult to achieve this as the local economy continues to grow.
The industry earned P200 billion worth of life and non-life insurance premiums last year, exceeding the Insurance Commission’s goal of P150 billion. Total premium income of the life insurance sector expanded 41 percent to P169.8 billion. Net premium income of the non-life insurance sector, on the other hand, rose 14.8 percent to P31 billion.
Total premium income is seen to increase further this year by 15 to 20 percent.
As of end-December last year, the life insurance sector’s total assets grew 18.78 percent to P737.79 billion as against liabilities of P624.11 billion.
To achieve its goals, the Insurance Commission has mapped out several reforms, which include overseeing health maintenance organizations, which used to be under the supervision of the Department of Health, and the establishment of the earthquake protection insurance Corp., which will provide mandatory earthquake insurance.