THE LIFE INSURANCE industry is bullish on its growth prospects despite global uncertainties, the Philippine Life Insurers Association (PLIA) said.
“More branches and more expansion into the countryside markets will continue to lead the growth of the market because this is kind of a continuous recovery from COVID times. Second is the continuous acceptance and awareness about medical insurance products… These key drivers will see a continuous growth in the market on a year-on-year basis,” PLIA President Rahul Hora, who is the president and chief executive officer of The Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife Philippines), told reporters on Tuesday.
Mr. Hora said health products are insulated from economic fluctuations and global uncertainties and should continue to see increased demand.
Lower interest rates will also help drive the life insurance sector’s growth as customers shift from fixed return instruments, he said.
“From a customer wallet standpoint, we are always in competition as a savings tool between insurance and bank products. So, with interest rates going down, you always have people moving away from term deposit kinds of products and back to insurance where the fixed term deposit rates start to go down. So, falling interest rates also create more demand for it.”
However, other product lines could be affected by the market volatility and economic uncertainties caused by global trade concerns, Mr. Hora said.
“Health is only part of our product. The other part is still savings, and a lot of that is still unit-linked. There, economic uncertainties continue to be a challenge for us,” he said.
“Most of the companies go through that experience where customers are educated to shift out of the current funds if the current set of markets are not doing well… Secondly, we are also seeing an increased investment in diversified funds. So, they’re not putting their money in a certain sector or in a certain country… Because of the availability of these kinds of funds, the interest for unit-linked products continues to be there,” Mr. Hora added.
The life insurance industry’s premium income rose by 13.96% year on year to P99.9 billion in the first three months of the year, the latest data from the Insurance Commission showed.
The sector’s net income increased by 12.22% to P10.83 billion as of March. — A.M.C. Sy
