MANILA, Philippines - The country’s life insurance industry is highly optimistic that new business or first-time policies will expand by another 60 to 70 percent this year due to positive developments in the country’s economy as well as the rest of the region.
In a press briefing yesterday, the Philippine Life Insurance Association (PLIA) said the country is in “a sweet spot.”
PLIA committee head for investments Omar Cruz said the entire region is enjoying strong growth compared to the sluggish performance of the developed countries.
Cruz, a former National Treasurer, is the chief finance officer of the Philippine American Life and General Insurance Co. (PhilamLife).
He said the US economy is experiencing weak growth while the eurozone is just starting to feel the pinch. In contrast, Asia is forecast to grow by seven to eight percent this year, with China and India leading the way.
Southeast Asia is likewise seen to grow between six to seven percent, and the Philippines is expected to grow by five percent.
Cruz said the Philippines had been reducing its dependence on the US economy while increasing intra-regional trade. China is now the leading trade partner of the Philippines this year.
Domestically, the country’s economic fundamentals have been very positive with increased consumer spending, steady growth of remittances from overseas Filipinos, and a robust business processing outsourcing industry.
Meanwhile, PLIA president Mayo Ongsingco, president and chief operating officer of Insular Life Assurance Corp. reported that Asia now accounts for 50-percent of all new premiums for the global insurance industry.
He said based on data shared in a regional conference recently also revealed that half of the new business in Asia was a result of bancassurance, which is the distribution process that involves a bank and an insurance firm.
PLIA also forecast that total premiums for the whole year would likely expand by another 20 to 24 percent.
In 2010, total premium income of the life insurance sector grew 23.56 percent, or from P57.2 billion in 2009 to P70.7 billion.
Of first-year premiums, almost two-thirds were sold through the bancassurance distribution channel while the remaining one-third was generated through the agency channel.