ALLIANZ PNB Life Insurance, Inc. said on Tuesday that inaccessibility and complicated processes continue to hamper Filipinos in availing insurance amid growing demand.
In a media roundtable, Allianz PNB Life Insurance President and Chief Executive Officer Olaf Kliesow said affordability is not the main issue for Filipinos in terms of availing insurance policies.
“Affordability only comes second place [in terms of why people are not buying insurance]. 50% of the customers usually drop out [of their insurance] in terms of convenience and accessibility because they knew insurance tends to be complicated and not transparent; many don’t understand it,” Mr. Kliesow said.
For Mr. Kliesow, this can be problematic given that the Philippines still has pent-up demand for financial services.
In the 2016 Allianz Global Wealth Report, the World Bank reported that only 14.1% of the Philippine population aged 15 and older have accounts in financial institutions. This is compared with China’s 79% and India’s more than 53%.
“It is therefore not surprising that asset diversification is as good as nonexistent among Philippine households,” a statement from Allianz read, noting that only 0.2% of the Philippine population hold securities, and insurance penetration is rather low in comparison to the regional average.
“The protection gap is significant here in the Philippines; it has been growing for a couple of years. [This should be addressed] to make sure [people] can maintain the level of [their] lifestyle in case the breadwinner passes away,” Mr. Kliesow said.
To address the pent-up demand for accessible and convenient insurance programs, Mr. Kliesow laid out opportunities for the Philippines to focus on. These include addressing the large and growing protection gap, supporting asset diversification and investment opportunities, digital communications and delivery at our customers’ convenience, promoting financial literacy, and advocating financial inclusion.
For the company, expanding their customer reach, as well as bringing in more insurance products, can help address the said gaps.
“[We are widening] our branch network in the Philippines to make sure we can reach a lot of people — we started working with HSBC. We will bring in more products [to add to our roster of] products we are currently offering,” Mr. Kliesow said.
While they are yet to offer microinsurance products “hopefully by next year,” they are going to tap the younger demographic, noting that millennials see insurance “as a key to actually have a better life.”
“They’re the segment we could no longer ignore. So one way of doing it is actually to change the way we talk to them because before, the insurance talk revolves around protection after they die. Nowadays, it’s about living benefits, being able to pursue your passion and bucket list,” said Gae L. Martinez, Allianz PNB Life Insurance chief marketing officer of the insurance firm. — Karl Angelo N. Vidal