Philippine insurance premiums to grow to €21.4 billion by 2035

THE PHILIPPINE insurance market is expected to grow to €21.4 billion by over the next decade amid growing demand for protection, Allianz Research said in a report.

Insurance premiums in the country are expected to post a compounded annual growth rate (CAGR) of 9.2% until 2035, according to the Allianz Global Insurance Report 2025 released on Tuesday.

This is from the €8.1 billion in premium income posted in 2024, which went up by 12.4% year on year, driven by the recovery of the life insurance sector.

The expected CAGR for Philippine insurance premiums until 2035 is higher than the 5.3% growth seen for the global insurance market (to €12.33 trillion from €7.008 trillion in 2024).

“Insurance remains a growth industry,” said Ludovic Subran, chief economist at Allianz SE. “However, this growth is largely fueled by policy inaction: underinvestment in adaptation is leading to increasing climate damage, while delayed pension reforms are requiring higher savings efforts from individuals. In the long term, however, the private insurance industry cannot shoulder the burden of acting as society’s ‘repair shop.’ Only by working together will we be able to meet the major challenges of the ‘twin transformation.’”

Broken down, Allianz Research said the property and casualty (P&C) segment is expected to post annual growth of 8.3% until 2035 to €5.2 billion from €2.2 billion in 2024, faster than the 4.5% global forecast.

“The segment will show solid growth rates in almost all markets, as the increasing need for protection is a global phenomenon,” it said.

It added that the Philippine life insurance premiums are expected to expand by 9.5% annually over the next 10 years to €15.1 billion from €5.6 billion in 2024, also outpacing its 5% projection for the global market.

“Allianz Research also remains confident about life insurance, which can expect annual growth of 5% thanks to higher interest rates,” it said.

“Asia and China will remain the growth engines for the global life business, as pension systems continue to be developed against the backdrop of accelerating demographic change.”

It also expects the health insurance segment to be the “most dynamic” amid pent-up demand, with premiums in the Philippines seen to expand by 9.7% annually until 2035 versus the 6.7% growth seen for the global market.

“Asia in particular still has a lot of catching up to do,” Allianz Research said.

It noted that demand for health insurance remained strong in Asia last year as the segment grew by 12.6% in the region.

“This reflects the still low insurance penetration (premiums in percent of economic output) in the region, which is below 1% in all markets except Taiwan. Even more than in life insurance, demand is driven by the state of the social security system, i.e. the level and quality of public healthcare,” it added.

Allianz Research said the global insurance industry’s premium growth will be driven by the life insurance sector, with more than half of the additional premiums coming from Asia excluding Japan.

Meanwhile, 40% of the expected additional premiums over the next 10 years for the global P&C insurance market will come from North America, it said. Health insurance growth will also be driven by the US market.

“Geopolitical uncertainties and trade tensions may weigh on insurance volumes through weaker economic growth, trade slowing down and higher credit and market risks. On the other hand, a protection effect could also be visible as companies demand more risk management solutions in this uncertain and crisis-ridden environment,” Allianz Research said.

“In the longer term, financial fragmentation and weakening international cooperation including on climate, cyber or pandemic preparedness could increase the cost of insuring these risks.”

Allianz Research expects the global economy to grow by just 2.3% this year as the US’ changing trade policies continue to drive uncertainty.

“At the heart of the fragmenting world is a global leadership deficit as the US seeks to free itself from international rules — and is thus no longer willing to act as a disciplining force. The consequences are new and growing power vacuums, emboldened rogue actors and an increased likelihood of accidents, miscalculations and conflict,” it said.

“At the same time, the global economy is undergoing significant changes that are challenging old economic models and exposing their unsustainability, while viable alternatives are still emerging, leading to growing divergence and fundamental uncertainty. This is fueling increased political polarization and democratic erosion… The risks to the 2025 outlook are clearly on the downside.”

It said that while ongoing trade shifts have no direct impact on the insurance industry, its effect on financial markets and asset prices could pressure firms’ balance sheets and affect the performance of related products like unit-linked insurance. The high level of uncertainty could also affect companies’ investment decisions.

“On the liability side, the impact of trade wars is not as direct and immediate, but second-round effects pose challenges. Weaker economic growth, less trade and higher credit risks all weigh on the insurance business,” Allianz Research said.

Insurers should be ready to respond to changing customer needs and manage potential risks, it added. — AMCS