2 global insurers to enter Phl market

MANILA, Philippines - Two big global insurers are firming up plans to operate in the Philippines, the country’s top finance official said.

On the sidelines of the 14th Asia Pacific Life Insurance Congress (APLIC), Finance Secretary Cesar Purisima told The STAR that representatives from the two life insurance firms recently relayed plans to put up their respective offices in the country.

Purisima, however, declined to identify the two firms but said both are new entrants in the Philippine insurance industry.

“They are big insurance companies. One is from Hong Kong. The other is from the US but will use its Hong Kong vehicle to establish their presence here. This would be the first time they will do business here,” he said.

Meanwhile, Purisima, in his speech at the APLIC, underscored the country’s high performance in the life insurance sector.

He also noted that the significant untapped potential of the industry which need to be explored further.

APLIC is an annual event that is considered the largest gathering of life insurance professionals and financial advisors throughout Southeast Asia.

“We are still relatively uninsured as a country, but we will be a very good market for life insurance companies because we have a median age of 23, one of the lowest in ASEAN.”

The Philippine life sector makes up about 77.67 percent of the total insurance industry, with assets of P555.04 billion.

However, the life insurance industry’s total asset size is only 5.42 percent of banks’ total assets of P10.23 trillion in the Philippines.

In 2012, life insurance companies collected P120.34 billion in premiums, or only P1,265 per capita which, according to Purisima, indicated room for growth.

The Insurance Commission, Purisima said, estimates that only 23 percent of Filipinos are covered by life insurance.

“We look at insurance as a very important pillar in savings mobilization,” Purisima said.

He also stressed that life insurers had to prepare for the coming ASEAN market integration in 2015, in accordance with the ASEAN Economic Community initiative.

The Philippines, despite its small life insurance industry, ranks as the fifth largest life sector by assets in ASEAN.