Non-life insurance industry banks on 'yuppie' market

Although the non-life insurance industry is projecting a flat growth in the next few years due to slow acceptability of Filipino market to pre-need plans, the industry is banking its sustainability and growth improvement on the new breed market, or the young professionals.

Federal Phoenix Assurance Corporation, Inc. president Ramon Yap Dimacali said the industry had suffered from a turtle-paced growth in the last few years, and is expecting to post flat growth of four percent in the next two years.

However, he said the industry is banking its business sustainability on the young professionals market who have seen the importance of insurance, and having back-up funds for unexpected circumstances like fire, calamity, among others.

The Filipino traditional market such as middle-aged individuals do not really consider insurance as a necessity.

Thus, he said the growth of the non-life insurance industry in the Philippines is not as robust as in other countries like United States, and Europe.

Dimacali, who is also an officer of the Philippine Insurers and Re-insurers Association (PIRA) said that half of the total Filipino population, below 24 years old are considered as the growth driver for the industry.

The growing number of call center agents in the Philippines, and those employed in other Business Process Outsourcing (BPO) are the hope of the industry, he said.

This workforce who are usually working at night, and sleep during the day are tend to save more of their minimum monthly take-home pay, most of them are now looking for investments, and getting an insurance premium is one of their priorities.

"These people (young breed of earners and professionals) have already recognized the importance of having a back-up savings, and insuring their properties," Dimacali said.

In this automated generation, he said young professionals have seen the importance of having a back-up file or recovery locations, if ever something happens to the main system.

The call center agents alone are expected to save at least P15 billion in the next three years. Current figure shows call center firms in the country have already employed close to 50,000 call center agents nationwide, this is expected to double in the next two to three years.

These call center workers are converting their savings to assets thereby it's a big opportunity for the insurers to take advantage of this particular market.

Aside from the new breed of young professionals, the industry is also improving the acceptability level for non-life insurance products to residential owners, real estate developers, logistics companies, and start-up businesses.