MANILA, Philippines — Filipinos are spending more on insurance, but the industry’s contribution to the overall economy has gone down as of the third quarter, according to the Insurance Commission (IC).
Latest data from the IC showed that insurance density or the average spending of an individual on insurance increased by 1.59 percent to P2,565.13 as of end-September from P2,525.10 in the same period last year.
However, the share of the sector to the country’s gross domestic product (GDP) declined to 1.68 percent in the third quarter from 1.81 percent a year ago.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the higher commodity prices that drove inflation in the past months may have reduced the demand for other products such as insurance.
This is especially applicable to Filipinos who are working on a tighter budget, with insurance likely placed on the back burner.
Nonetheless, Ricafort emphasized that higher financial literacy and incomes could still lead to higher insurance demand.
“More Filipinos would like to be more financially secure through higher insurance coverage, both life and non-life such as for homes, vehicles, businesses, among others,” Ricafort said.
“Easing headline inflation and faster economic growth increase the incomes and spending power of more Filipinos, which could also help increase demand for insurance,” he said.
Meanwhile, data showed that the net income of the insurance sector went up by 9.38 percent to P38.28 billion from January to September compared to last year’s P35 billion.
Broken down, the life insurance segment registered a 10.32-percent increase in net income to P28.79 billion from P26.1 billion in 2022.
On the other hand, the non-life insurance segment’s net income rose by 15 percent to P5.48 billion from P4.76 billion.
The IC also reported that mutual benefit associations saw their income decline by three percent to P4.01 billion due to a significant increase in total underwriting expenses of P9.64 billion.
Combined, total assets of the three segments improved by 10 percent to P2.23 trillion in end-September while total benefits paid went down four percent to P96.98 billion.
The third quarter insurance data came from submissions of 130 out of the 137 licensed insurers and MBAs.