THE life insurance and annuity (L&A) industry can create significantly more value for both shareholders and consumers, but only if it can motivate millions of people to understand and fully embrace these products and their potential benefits. The industry is evolving and insurers will need to navigate a sea of change including demographic shifts, technological innovation, resource challenges and regulatory demands to engage with these new consumers and deliver a personalized experience tailored to their specific needs.
Organizations that encourage the integration of technology and tailored messaging will leave behind an industry that traditionally has been relatively slow-moving in adopting innovation. And non-traditional entrants, flush with talent and unburdened by lethargic legacy systems and old-school mindsets, have an opportunity for their voice to be heard on the right channels at the right time, to better serve customer needs while remaining relevant and competitive. So, what does the future of the life and annuity landscape look like?
In this latest report, KPMG spoke with more than 425 industry decision-makers to discuss the key signals of change across the industry, from recruiting and underwriting to distribution and claims handling.
In the Philippines, life insurance and annuities play crucial roles as financial products for individuals. Many Filipinos perceive life insurance not only as a means of protection but also as a form of savings or investment due to the cash value it offers, which can be utilized for loans or as collateral. This makes life insurance an appealing choice for long-term wealth accumulation.
Conversely, annuities serve as a reliable income source for retirees, particularly in a country with limited social security benefits. By providing regular payments throughout the annuitant’s lifetime, annuities help mitigate the risk of depleting savings in old age.
The Covid-19 pandemic is also one of the drivers of this mindset shift that resulted in an increased interest in life insurance and annuities in the country. The pandemic has highlighted the need for financial protection in the face of unexpected events. Many Filipinos are now more aware of the importance of having a safety net to protect their families and loved ones in the event of untoward incidents.
According to KPMG in the Philippines Vice Chairman and COO Emmanuel P. Bonoan, said that “given the prevailing uncertainty about the future, it is not surprising that a growing number of Filipinos are actively seeking means to safeguard their financial well-being and establish a reliable income source during their retirement years.”
“This desire to attain financial stability and peace of mind has led many Filipinos to explore various avenues and financial products that can provide long-term security,” Bonoan added.
This excerpt was taken from https://kpmg.com/xx/en/home/insights/2023/02/future-of-insurance-life-and-annuities.html.
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This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity. The views and opinions expressed herein are those of the author and do not necessarily represent the BusinessMirror, KPMG International or KPMG in the Philippines.