In a recent report by the Philippine Insurance Commission (IC), the life insurance sector has exhibited remarkable growth, with total premium revenues reaching P229.9 billion in the third quarter of 2023. Notably, Annual Premium Equivalent (APE) premiums on new insurance sales soared to P46.6 billion, marking a significant 13.9% increase compared to the same period in 2022.
The Shift to Traditional Life Insurance
The surge in new life premiums is attributed to a shift towards traditional life insurance. With the volatility of equity markets in recent years affecting variable life insurance sales, insurance companies are turning to traditional life sales to bolster their new business endeavors.
Nation-Building Through Life Insurance
Renato A. Vergel De Dios, President and CEO of BDO Life Assurance Company, emphasizes that acquiring life insurance goes beyond securing a family's financial future. Few Filipinos are aware of the vital role the life insurance industry plays in nation-building. The ability to pool together long-term capital addresses the critical needs of an emerging economy like the Philippines.
Economic Impact of Premiums
Premiums generated, particularly from traditional life insurance sales, play a pivotal role in fueling economic growth. Insurance companies strategically channel long-term funds into areas such as infrastructure development and manufacturing capacity expansion. The Asian Development Bank (ADB) underscores the importance of such investments in sustaining economic progress.
Protection for Filipinos and Overseas Filipino Workers (OFWs)
Encouraging all Filipinos, including the vast community of Overseas Filipino Workers (OFWs), to acquire life insurance coverage is a dual benefit. Not only does it protect their earning capability and fortify family financial security, but the amounts devoted to premiums also contribute to forming long-term capital funds that spur the nation's development and financial prosperity.
Life insurers emerge as significant corporate investors in the country due to their access to long-term capital. The industry hopes that these investments create material and local job opportunities, ultimately reducing the need for Filipinos to seek employment abroad.
Bancassurance as a Growth Driver
With increasing awareness of the importance of life insurance, bancassurance is expected to remain a consistent and complementary contributor to overall financial services. BDO Life, the Bank's life insurance carrier, showcased robust business recovery in 2022, securing the 4th spot in new sales measured by New Business Annual Premium Equivalents (NBAPE).
The flourishing life insurance sector in the Philippines not only safeguards individual and familial futures but also plays a crucial role in propelling economic growth and development. As Filipinos recognize the value of life insurance protection, the industry stands poised to contribute significantly to the nation's prosperity through strategic investments and financial stability.