FINANCE Secretary Ralph Recto has called on the life insurance industry to increase its market penetration and transform the financial instrument into a mainstream consideration and a basic necessity for Filipinos.
“Risk is a significant driver of poverty, and adequate insurance coverage is among the powerful tools for mitigating this challenge. Therefore, all of you [in the life insurance industry] hold key positions in winning our battle against poverty,” said Recto.
The Finance chief made this call during the 74th anniversary celebration of the Philippine Life Insurance Association (PLIA) on July 30, according to the Department of Finance (DOF).
In his remarks, Recto revealed that the government’s goal is to reduce poverty incidence to a single digit or 9% by 2028.
As of 2023, approximately 2.5 million Filipinos were lifted out of poverty, with the poverty rate reduced to 15.5%. To meet its target, the Finance chief stated that the government needs to lift 10 million more Filipinos out of poverty in the next four years.
Citing the 2024 World Insurance Report, the DOF noted that life insurance penetration — premiums as a percentage of gross domestic product (GDP) — in the Philippines remains relatively low at 1.2% in 2023, compared to the global average of 2.9% and 2.2% in emerging Asia.
“This is both a challenge and an opportunity — a call to action for the industry to step up efforts in ensuring that every Filipino, especially those in low-income brackets, is protected and shielded from falling below the poverty line,” said Recto.
With this, the Finance chief urged the members of the PLIA to aggressively innovate, educate, and advocate for life insurance in a manner that every Filipino recognizes its indispensable importance.
He also called on the PLIA to “redefine the way people perceive life insurance” — which is often seen as merely about legacy planning.
“It is not a mere transaction but a selfless act of love that they can bestow upon their families. Hindi lang ito dapat tingnan na isang gastos. Hindi lang ito para sa may-kaya. At hindi lang ito napapakinabangan kapag pumanaw na ang isang mahal sa buhay,” said the chief economic manager of the Marcos administration.
Further, Recto urged the life insurance industry to take advantage of the Philippines’ vibrant labor market, growing middle class, demographic sweet spot, and its projected ascent to becoming an upper-middle-income country by 2025, as well as the world’s 13th largest market by 2030.
He called on the insurance industry to break free from conventional solutions and innovate beyond boundaries to make products simpler and more affordable, responsive, customer-centric, and digitally integrated.
In 2023, the DOF reported that the country’s life insurance industry provided coverage equivalent to about 84 million lives — a 16% increase from the pre-pandemic figure of 72 million.
Of this number, 44 million lives were covered by micro-insurance products.
Meanwhile, the average amount Filipinos invested in life insurance rose to P2,745.7 in 2023, up from P2,182.8 pre-pandemic. (GMA Integrated News)
