The insurance industry is expected to rebound next year, after a positive but slower growth this year compared to record-high growth in both premium payments and revenues in the past four years.
Insurance Commissioner Emmanuel F. Dooc said the insurance industry could achieve the 2.5 percent target penetration rate by the end of 2015 because of the expected increase in the contribution of the microinsurance industry in premium payments.
“We have stated in our projection that we will try hard to get hit the target by the end of 2015, and we are banking heavily on the contribution from microinsurance,” Dooc said in an interview.
The penetration rate is the total amount of premiums paid in relation to the gross domestic product.
At present, the Philippines is ranked No. 5 in the Association of Southeast Asian Nations (Asean) in terms of insurance-penetration rate, the average of which is around 3 percent in the Asean region.
Singapore is ranked highest, but the Philippines is ranked higher than even Indonesia. The penetration rate of the Philippines steadily rose from 1.02 percent in 2009 to an estimated 1.77 percent by the end of 2013.
In terms of premium payments in 2014, the total premiums paid is estimated to hit at least P170 billion, which is low compared to premiums collected by the insurance industry in 2013, which hit P204 billion.
But industry players said they are optimistic that 2015 would see better growth in terms of premium payments and revenues from the investments made by insurance companies.
For instance, Sun Life Financial Philippines President and CEO Rizalina Mantaring expects the stock market to move up favorably by next year, with about a 15-percent earnings growth for all the listed companies in the stock exchange.
Mantaring also said she expects premium payments made to insurance companies to also pick up next year after an estimated flat or slightly lower premium collection this year for the entire insurance industry.
“For the life-insurance industry, 2014 was something of a breather, because the past years, the growth was really phenomenal and we were averaging about 25 percent to 30 percent. So this year was a breather, in terms of total premiums, it will either be flat or a little lower than last year,” Mantaring said.