The country’s so-called protection gap is fairly large and has continued to grow, based on estimates made by Allianz SE based in Munich, Germany.
According to Olaf Kliesow, president and CEO at Allianz PNB Life Insurance, the protection gap, which measures property or asset losses or the so-called economic losses versus losses sustained even with insurance cover, was estimated at some P1.2 million on
He particularly said that gap keeps expanding in the case of the Philippines, where losses sustained as a result of natural disasters like typhoons, and severe weather disruptions like the El Niño are substantial and frequent.
Nevertheless, Kliesow said the Philippines has a huge pent-up demand in terms of access to financial services and financial deepening.
He cited a World Bank report showing that less than a third of the population aged 15 and older have an account at a financial institution, and that only 14.1 percent of Filipinos have a deposit account, based on another report by the Bangko Sentral ng Pilipinas.
“In India, for example, more than 53 percent of the population aged 15 and older, and in China 79 percent of the respective age group have an account at a financial institution.
“It is, therefor,e not surprising that asset diversification is as good as
nonexistent among Philippine households: only 0.2 percent hold securities or other investment products.
“The same holds true with respect to insurance coverage: Despite the fact that 24.2 percent of households are reported to have retirement insurance and 27.5 percent are said to own a car, insurance penetration is also still rather low in comparison to the regional average, with premium income in life insurance amounting to 1.3 percent of local output or the gross domestic product and that of poverty and casualty insurance to 0.5 percent of GDP,” he said.