Insurance sector upbeat amid market volatilities

CEBU, Philippines - Despite market volatilities, the local insurance business has continued to grow due to the good prospects seen in the economy and the huge potential in insuring more Filipinos, an industry player said.

Ryan Charland, president and chief executive officer of Manulife Philippines, said the local insurance industry in the Philippines has grown tremendously for the past years. Life insurer MP is a wholly-owned company of listed firm Manulife Financial Corporation.

“Stock market volatilities have an impact but on a larger scale we are very optimistic because of the strong growth prospects here (in the Philippines and Cebu in particular),” the president said at the sidelines of the company’s inauguration of its 32nd Philippine branch in Lapu-Lapu City yesterday.

The significant growth, Charland said, can be attributed to the growing middle class population in the country amid the main concern of the industry – the low awareness on financial management.

He said the insurance sector has been concerned about the low penetration rate of insurance products and other financial instruments in the Philippines.

The penetration rate of insurance has been growing around only one percent, he pointed out, saying only few of the total Philippine population are yet covered by the insurance business.

In terms of penetration rate, the country is behind its ASEAN neighbors such as Thailand and Indonesia which have three to four percent rates, he noted. Other Asian countries such as Taiwan and Hong Kong have reached double-digit growth in life insurance coverage.

According to the Insurance Commission, the penetration of life insurance has recently been increasing due to the growth of micro insurance business which targets low-income households.

Robert Cook, Manulife Asia CEO, stressed the very important role of insurance firms in helping more Filipinos understand the benefits of financial investment and the concept of financial planning.

With the promising growth of the Philippine economy, Cook noted this may be a good opportunity to encourage more people to be insured and grow their monetary resources.

Capitalization

Charland also reported the company’s capitalization, assets and revenue growth have been steadily strong due to its growing branch network.

As of June this year, funds under the Manulife management and its subsidiaries were approximately US$597 billion. The firm trades as “MFC” in the Philippine Stock Exchange. — (FREEMAN)