But there are certain factors or conditions that must be addressed before that can be achieved.
According to the National Economic and Development Authority (NEDA), the insurance and pre-need industry accounts for less than 20 percent of gross domestic product (GDP).
Industry estimates that a little over 12 percent of the country’s population has one form of insurance protection. But that includes mandatory protection from the Social Security System (SSS) and the Government Security and Insurance System (GSIS).
The insurance premium growth rate has been in single digits, and it is forecast to grow by a mere five percent this year.
But the disturbing figure is that only five to six percent of the population has private insurance, which gives better returns or protection to the policyholder than what government can offer.
Nonetheless, Jose L. Cuisia, president and chief executive officer of the Philippine American Life and General Insurance Corp. (Philamlife) said that the life insurance industry is optimistic the IC goal can be achieved.
"But we are urging the Insurance Commission to help create, directly or indirectly, a favorable environment to achieve it," Cuisia said during the formal launching of an agreement between the insurer and the Department of Education, Culture and Sports (DECS).
The Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) continue to be at the forefront of imposing various tax forms that stunt the growth of insurnace portection in the Philippines. That is ranging from the five-percent premiums tax, the documentary stamp tax (DST), the corporate income tax, the fire protection tax, the municipal tax among others.
Interest rates remain low while inflation in high keeping investment income for the industry as well as the country’s financial institution depressed.
Global interest rates are more inviting but the country’s insurance industry is allowed a miniscule portion of their investment portfolio to dip their fingers in foreign investment products.
In contrast, government has been unable to stop foreign-based insurers in cornering the small but high networth market.
"It is unfair competition as we have heavily regulated but the foreign insurers that are unlicensed can continue to do business her," Peter Coyuito, president of the Philippine Life Insurance Association (PLIA), lamented. Coyuito is also the president of First Guarantee Life Assurance Co. (First Life).
Insurers in the past two years have been forced to increase the prices of insurance policies to cope with the adverse conditions aggravated by the adverse yet unfair effect of the troubled pre-need industry.
To meet the 20-percent goal by 2010, the IC is also urging the life insurance industry to introduce more affordable insurance products to compliment the traditional and the variable products. – Ted Torres