SUN Life Financial-Philippines (Sun Life) has expressed optimism that the local insurance industry will experience positive growth in the coming years, on the back of an increase in financial literacy efforts by the sector.
Sun Life Country Head and CEO Benedict C. Sison told financial reporters he is positive that a growth in premium income is expected starting 2019 not only for the life-insurance sector, but for the whole domestic insurance industry. This is due to the Philippine economy’s sustaining its growth, as well as financial-literacy programs promoted by the industry.
“We are very bullish about 2019 and 2020. Our outlook for the next three years is very bullish, especially 2019. The year 2018 was very volatile yet the life insurance [sector] grew. It’s not only related to the growing economic environment, but also to the growing financial literacy when you reach out to more Filipinos,” Sison said at the sidelines of the Sun Life Sinag Awards on Wednesday at the Bonifacio Global City.
He said there are still opportunities to increase the country’s insurance penetration which means a lot of Filipinos can still be covered by some form of insurance.
For 2017, the insurance penetration rate of the country settled at 1.3 percent, lower compared to the rates registered by our neighboring countries, with Indonesia at 2 percent and Malaysia at 3.6 percent, among others.
“Our penetration rate is still low at only 1.3 percent. Indonesia’s penetration rate is close to 2 percent and Malaysia is at 3.6 percent. We are working as an industry to increase the penetration rate. I’m very positive and hopeful that we’ll get there,” he added.
He said the Philippines can hit at least a 2- percent insurance penetration rate sooner than five years, since most insurance companies—whether life or nonlife—are increasing their financial-literacy programs.
In terms of meeting its goal of having 5 million clients by 2020, Sison said the company is on track to meeting that specific goal as its client base is already at 3.8 million at the moment.
“We are on track. In fact, we are ahead of the plan number, but we are still saying we will achieve it by the end of 2020. We are comfortable. And financial literacy is one key reason why Filipinos are becoming more aware of the benefits of being insured and investing. Their awareness has grown,” he added.
Earlier, the Insurance Commission reported that total premium income of the whole insurance industry from January to September this year grew by 18 percent, reaching P218.91 billion, with all sectors posting positive growth despite volatilities.
Insurance Commissioner Dennis B. Funa said the life-insurance sector posted premiums of P174.15 billion, which accounts for 79.55 percent of the premiums collected by the industry. This is 20.4 percent higher than the P144.63 billion recorded in 2017.