The life insurance industry is expected to post a double-digit increase in its premiums for 2020, with growth to be driven by a favorable economic and industry outlook, the Philippine Life Insurance Association’s (PLIA) top official said.
Benedict Sison, PLIA president and Sun Life Philippines chief executive officer and country head, said the outlook is driven by favorable demographics, a growing middle class, increasing financial literacy and the advancement of technology.
“I couldn’t give an exact number but I would think (we would post a) double-digit growth for 2020,” Sison said on the sidelines of the induction of the 2020 PLIA Board of Directors and Committee Chairpersons held in Makati last Thursday.
Sison cited the country’s strong economic fundamentals as well as strong growth forecasts for the economy despite the internal and external challenges.
“We’re also still such an underpenetrated market, so there’s really huge opportunity for the insurance industry so we’re really very positive about it. Digitalization will allow us to reach untapped client segments. It’s underpenetrated, so sometimes you’ll have to use digital to reach untapped client segments. Then, it will also allow us to address new client needs,” Sison said.
While noting several external challenges, he pointed out the Philippine economy is a domestic consumption driven economy.
“Internationally, you have the US-China tension, but it’s an election year so you would expect the US economy to do well. That’s less of concern for us here in the Philippines, although I must say if something happens to China, they’re our second largest trading partner so that would definitely impact the Philippine economy. But as I said, we’re largely domestic consumption. So there will be impact but not as significant as everybody thinks.
We’re not reliant on our exports,” Sison said.
“I think 70 percent of our GDP (gross domestic product) is coming from domestic consumption. The economic fundamentals are solid,” he added.
Meanwhile, Sison said in his acceptance speech the challenge for PLIA is to make the operating environment more conducive to growth creation through financial literacy, digital enablement, professionalism and stronger alliance with the regulator.
“To achieve this, we will endeavor to complete the projects we started last year, harness the association’s resources and expertise to effectively respond to challenges and opportunities, and to continue to explore developmental initiatives,” Sison said.
Sison added that PLIA is mindful and is vigilant of regulatory trends and court decisions that “may not be to the best interests of clients and the industry.”
He said these include the bill on collective investment schemes, which may split the regulation of the variable-unit linked product between the Insurance Commission and the Securities and Exchange Commission, as well as impose a “redundant and costly governance structure.”
He also mentioned the requirement by the Credit Information Corp. to collect policyholders’ data on policy loans, premium payments and contract information as being indicative of a policyholders’ credit-worthiness; the possible change in judicial interpretation of concealment and the application of the incontestability clause in the evaluation of claims; and the impact of the HIV Law on product designs, underwriting and claims processes.
