Low awareness impedes insurance sector growth

Well aware of the low insurance protection awareness of Filipinos, the country’s leading insurance provider have seen market education as one important step in the success of their nationwide operation.

Recently, Philam Life launched in Cebu their newest product dubbed as the AIG Asset Builder which their executives deemed as another innovative way to promote security awareness to the vast majority of the Filipino populace.

“Our mission has always been to promote savings for the Filipino people. Our AIG Asset Builder is built with features fit for consumers and financial advisers and this innovative savings and investment product empowers Filipinos to build wealth, the best way possible,” said Jose L. Cuisia, Jr., president and CEO of the Philippine American Life and General Insurance Company in an exclusive interview with The Freeman.

Cuisia said that compared to our other Asian neighbors, the country’s population has “very small percentage” of policy holders. He said that there is only a portion of five to six percent of the population who hold insurance policies from insurance providers excluding GSIS, SSS and other public insurances and there is a portion of 13% if these were included.

Wanting to promote savings and insurance security awareness even to the lower end of the market, Philam had also pioneered sachetized insurance products that can be afforded in as low as P10 denominations and can be accessed through SMS.  But Cuisia said that this product has been picking up rather slowly in the market since consumers still do not appreciate the value and concept of insurance.

And having recognized the importance of educating the younger segments of populace who will become future earners, Philam Life recently collaborated with the Department of Education to include in their textbooks a chapter that introduces insurance and savings.

“These efforts are part of our ways to educate the Filipinos. Younger people need to understand and be exposed to the insurance concepts,” Cuisia said. —Rhia de Pablo

to better appreciate the value of insurance to their lives and their future,” Cuisia added.

He said that there is considerably a lower insurance density in the country and low insurance penetration thus, there is still a very huge growth potential in the Philippine’s insurance market.

“We still have a long way to go. The five to six percent insurance penetration of the market still leaves us with a very big potential to grow and expand our business,” said Cuisia.

Aside from the low level of insurance awareness of the Filipino people, another problem that hinders the growth of the insurance industry according to Cuisia is the country’s high taxation.

“In other countries, there is no premium tax and there is minimum tax for other necessary requirements. But here there is and so the result is that we loose high net worth individuals,” said Cuisia.

 Last year, Cuisia said that there was a good growth for the industry as last 2006 there was only a portion of two to three percent of the population who has insurance policies. This year, he projected that there will be a slowing down of variable life products especially with the volatility of the stock market.