The Philippines has an underdeveloped insurance market, with a low penetration rate of less than two percent. But thanks to the growing middle class and increasing disposable income, the country's insurance landscape is poised for growth in the coming years. The insurance market generated premiums amounting to approximately 390 billion Philippine pesos in 2023, indicating a 72 percent growth from its 2016 value. However, low awareness and the affordability of insurance plans continue to challenge the sector.
The insurance industry is varied and comprehensive, with plans ranging from life to non-life, pre-need, and micro and macro insurances. Between insurance types, life insurance has a higher insurance density in the Philippines, reflecting an increasing premium income generated. The number of newly insured Filipinos surged in 2020, reaching a peak of about 27 million in 2022. In terms of premium income and total assets, Sun Life of Canada (Philippines) was the leading life insurance company in the Philippines , followed by Pru Life Insurance Corporation and AIA Philippines Life and General Insurance.
Meanwhile, the non-life insurance industry has shown gradual growth in its gross premiums written, aside from a slight decline in 2020. Gross premiums written were highest for fire insurance, which reached about 37 billion Philippine pesos in 2021, followed by motor car insurance. In 2023, Pioneer Insurance & Surety Corp. and Malayan Insurance Company, Inc. were the leading non-life insurance companies by gross premiums written.
Since getting insurance coverage could mean additional expenses, Filipinos belonging to low-income households could turn to cheaper insurance products known as microinsurance. Microinsurance policies in the Philippines were mostly written by the Mutual Benefits Association (MBA). Paying sick benefits and furnishing financial support to MBA members while out of employment were two of the associations’ provisions. Preliminary figures suggest that the Mutual Benefits Associations (MBAs) issued premiums worth approximately 14.5 billion Philippine pesos in 2022 for covering microinsurance needs.
Considering the COVID-19 pandemic and recent calamities in the Philippines, insurance is now more necessary than ever. Filipinos have increasingly recognized the risks of a lack of security in cases of death, unforeseen accidents, and hospitalization costs from illnesses. To provide for the insurance needs of its citizens, the government offers several social insurance programs for both public and private employees, voluntary members, and overseas Filipinos. This covers a comprehensive list of benefits, including maternity, retirement, and death subsidies, as well as general insurance coverage. Selected private insurance companies have also started offering flexible insurance policies, with some including built-in investments, that will further encourage Filipinos to be insured. The Universal Health Care (UHC) Act has also automatically enrolled all Filipinos in public health insurance, ensuring them accessible and affordable healthcare coverage.
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