The Department of Finance (DOF) asked the life insurance industry to expand its market reach and make life insurance a household staple to help the government reduce poverty in the Philippines.
“Risk is a significant driver of poverty, and adequate insurance coverage is among the powerful tools for mitigating this challenge. Therefore, all of you [in life insurance industry] hold key positions in winning our battle against poverty,” Finance Secretary Ralph Recto told the Philippine Life Insurance Association (PLIA) during its 74th anniversary on July 30, 2024.
Recto said the government’s ultimate goal is to reduce poverty incidence to a single digit or 9 percent by 2028. As of 2023, the government lifted 2.5 million Filipinos out of poverty, lowering the poverty rate to 15.5 percent.
He said to meet its target, it should elevate 10 million more Filipinos above the poverty line in the next four years.
The 2024 World Insurance Report shows that life insurance penetration (premiums as percentage of GDP) in the Philippines remained relatively low at 1.2 percent in 2023, compared to the global average of 2.9 percent and 2.2 percent in emerging Asia.
“This is both a challenge and an opportunity—a call to action for the industry to step up efforts in ensuring that every Filipino, especially those in low-income brackets, is protected and shielded from falling below the poverty line,” Recto said.
He encouraged the members of the PLIA to aggressively innovate, educate and advocate life insurance in a manner that every Filipino recognizes its indispensable importance.
Rector also urged the PLIA to redefine the way people perceive life insurance, which is about legacy planning as well as protecting and empowering families to build a better future.
“It is not a mere transaction but a selfless act of love that they can bestow upon their families. These investments are stepping stones towards getting higher education, owning a home, or starting a small business—all meant to help more Filipinos live healthier, longer, and better lives,” he said.
Recto called on the life insurance industry to take advantage of the Philippines’ vibrant labor market, growing middle class, its demographic sweet spot and its projected ascent to becoming an upper-middle-income country in 2025 as well as the world’s 13th largest market in 2030.
“Favorable factors are in place to provide greater headroom for the industry to increase its market penetration,” he said.
Moreover, the Recto reminded the industry to constantly prove itself worthy of its clients’ trust and expectations by continuing to provide them with the best service possible, delivered with both passion and compassion.
He assured PLIA of the Department of Finance (DOF)’s strong commitment and support to the insurance industry, through the Insurance Commission (IC), in closing the protection gap.
In 2023, the life insurance industry provided coverage equivalent to about 84 million lives––a 16 percent increase from the pre-pandemic figure of 72 million. Of this number, 44 million lives were covered by micro-insurance products.
Meanwhile, the average amount Filipinos invest in life insurance has rose to P2,745.7 in 2023 from P2,182.8 pre-pandemic.
