The growth in the insurance industry was mainly due to high demand in life and non-life insurance. The total premiums reached P259.6 billion with an increase of 12% in the same period last year as released by the Insurance Commission (IC). The life, non-life and Mutual Benefit Associations (MBAs) posted positive growth in terms of its assets, premiums earned, net worth and paid-up capital or guaranty fund.
Life insurance premiums rose by a tenth reaching P202.3 billion last 2017 from P182.8 billion in 2016. Non-life insurance premiums reported a 16.7% increase in premium income from P41.6 billion to P48.6 billion. MBAs rose by 16.9% from P7.5 billion to P8.7 billion. With regards to the macro scope, the total assets of insurance companies in the Philippines grew by 17.9% amounting to P1.55 trillion in 2017 from P1.31 trillion from 2016. Also, paid-up capital rose by 10.5%.
The said increases can be attributable to the use of social networking accounts and other online platforms. This means that aside from the actual sales pitch being made by its employees, a part of the market is actually gained by ads being posted online. In connection with this, IC has released new guidelines regarding e-commerce covering the use of mobile apps for insurance product distribution. This will regulate and make efficient the system of distribution, delivery and market penetration.
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With regards to the newly enacted tax reform law (TRAIN Law), it could affect the insurance industry most especially the life insurance policies since the proceeds of it is used to pay off estate taxes. However, on a positive note, the said law will increase the spending capacity or purchasing power of Filipinos which they should see as an opportunity to market their products since most of the population does not have insurance at all. There should be no worries since the negative effects are offset by the positive effects that it has. One significant positive effect of the TRAIN Law is that, it gives consumers –more importantly the lower income classes – a higher take-home pay prompting them to start accumulating wealth and protecting themselves by availing insurance policies.
Insurance companies need to be more competitive
The positive growth posted in the insurance industry means that insurance companies need to be more competitive in their selling strategies. While it has to meet the demands of the market, it also needs to engage in innovative ideas to capture the very interest of the market. A big portion of the population still has no knowledge about insurance. This means that there is still a huge opportunity for growth in the industry. Given the sound economic indicators posted for last year, keeping also inflation at a steady and manageable rate, there is a positive outlook for this year.