MANILA, Philippines - Sun Life Financial-Philippines is extremely concerned with the low level of financial literacy in the Philippines.
Sun Life Financial president and chief executive officer Rizalina G. Mantaring said that it does not only redound in a low level of penetration in terms of insurance. It has also resulted in a decrease in agency force recruitment for the industry.
Only 14 to 15 percent of the country’s population has one form of insurance protection, said to be the lowest in Asia. And half of that are actually government pension funds and group insurance.
“We need to offer protection for their future, but they are unaware of the various financial instruments,” Mantaring said.
In one of the studies commissioned by Sun Life Financial, it was revealed that only four percent of retirees have any protection.
Yet there are insurance products sold by private life insurance firms that are crafted for the different levels of society.
Sun Life for example has Sun Start-Up, which has premiums worth P400 per month. There are personal accident (PA) insurance, which costs as low as P50 one-time pay with a coverage of up to P50,000 for one year.
In one of the studies, another reason for the low penetration levels, is the lack of agents selling life insurance policies.
The life insurance industry has observed a reduction of licensed agents from highs of over 60,000 to just 24,000.
Mantaring revealed that there are insurers in Vietnam that have more than 100,000 agents.
In a bid to uplift the level of financial literacy of the Philippine population, Sun Life Financial partnered with Knowledge Channel. It is also mulling sitting down with the Department of Education (DepEd).
“We are prepared to work with the DepEd to come out with modules for financial literacy, and of course insurance,” she said.
Increasing the level of financial literacy could also reintroduce the insurance industry as a viable profession.
Right now, Sun Life Financial manages 2,500 agents. It has 32 branches and 24 expansion offices spread out nationwide.
“This year, we will be opening two more expansion offices,” the Sun Life Financial chief executive added.
Sun Life Financial is the second leading life insurance company in the Philippines.
Last year, it recorded a premium income of over P9.5 billion, of which P761 million are traditional products and P920 million classified as variable or insurance products with investment features. First year business amounted to P1.68 billion in the same year.
Total premium income 2008 amounted to P8.3 billion, and a slightly better P8.5 billion in 2007.
In 2008, net income reached P2.3 billion, roughly 50 percent better than the P1.5 billion recorded in 2007.
Mantaring said that its new business in the first five months of 2010 were “well above plan.” It is 50 percent higher than the first five months of 2009, and its assets under management grew 24 percent higher compared to the same period in 2009.