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Enterprise-based learning pushed

SENATE Majority Leader Joel Villanueva on Sunday said developing the country’s enterprise-based education programs will increase jobs and employment prospects for the Philippine workforce.

“We are formulating a comprehensive set of labor policies targeting both the demand and supply sides of the labor market to effectively address the persistent issue of unemployment and underemployment,” he said in a statement.

Earlier, he filed Senate Bill No, 2587 or the Enterprise-Based Education and Training Framework Act, which seeks to bridge the gap between the needs of local industries and the skills of workers.

The measure is one of President Ferdinand R. Marcos, Jr.’s priority bills this year.

“The involvement of our industry partners is crucial in ensuring that skills and competencies align with their requirements,” the Senate majority leader said.

The unemployment rate in February dropped to a two-month low of 3.5% as more Filipinos joined the workforce. Job quality also improved in February as the underemployment rate, which measures employed Filipinos seeking more work or longer working hours, fell to 12.4% from 13.9% in January.

Mr. Villanueva, who used to head the Technical Education and Skills Development Authority (TESDA), said the government should focus on helping workers learn from industry experts to boost their skills and qualifications.

Last year, Mr. Marcos signed into law a bill authorizing the creation of a national employment roadmap and an inter-agency body to draft a national strategy for job generation.

The law also aims to boost the competitiveness of the workforce through upskilling and reskilling programs.

“The objective is to unify all modes of enterprise-based training programs under one framework to enhance the skills of our new entrants to the labor force and to upskill those already employed, ensuring their employability and meeting the demands of the rapidly evolving world of work,” Mr. Villanueva said. — John Victor D. Ordoñez

JPMorgan launches ‘tech-voc’ project

JPMorgan Chase Foundation and Asia Society for Social Improvement and Sustainable Transformation (ASSIST) have launched Project SustainABILITY which aims to engage more than 12,000 technical vocational students in its two-year projected run.

The project will design a “comprehensive and industry-relevant curriculum and pedagogy” that will equip students and teachers from technical vocational institutions (TVIs) with green skills in construction, metals and engineering, automotive and land transportation, agriculture, forestry, and fisheries.

In the next two years, it aims to engage 20 TVIs in partnership with the Technical Education and Skills Development Authority (TESDA).

Program Director Francis A. Macatulad said ASSIST is working with TESDA to contribute in supplying equipped workers to the increasing demand in green jobs. In 2018, TESDA estimates that there will be 5.1 million jobs in the green industry by 2025.

“We will be working closely with the schools, with academic partners, and our industry advisory committee to align and improve the programs and curricula so that we can address the proper knowledge needed by an industry,” he said.  

So, we will be developing a lot of modules and learning materials to prepare our students for the world of work, for the future of work,” Mr. Macatulad added.

Meanwhile, TESDA Deputy Director for Special Concerns Vidal D. Villanueva III said “There is a pressing need for a more robust monitoring and evaluation mechanism to accurately assess Republic Act 10771 (Green Jobs Act of 2016) impact on our society.”

The slow development of green skills in the Philippine workforce can be attributed to the lack of access to information and access to training and resources, Mr. Vidal said.

Philippine Chamber of Commerce Human Resources Development Foundation, Inc. President Alberto P. Fenix, Jr. said companies ought to provide in-house training for prospective employees since even those certified by the Professional Regulation Commission (PRC) often struggle to adjust to their roles.

“We have now finalized our goal of what we call the PCCI Education and Training System, or PET system for short,” Mr. Fenix said.

“Here we have already identified four sectors. Agriculture, construction, IT, and the fourth one is tourism and hospitality. We are now writing the PET program manuals on the qualifications, the priority qualifications in those four sectors that we see.” — Chloe Mari A. Hufana

BIR releases implementing rules for Ease of Paying Taxes law

People line up to file their income tax returns at the Bureau of Internal Revenue office in Intramuros, Manila, April 18, 2022. — PHILIPPINE STAR/ RUSSELL A. PALMA

THE Bureau of Internal Revenue (BIR) has released six sets of revenue regulations (RR) for the implementation of the Ease of Paying Taxes Act.

The regulations cover the new classifications of taxpayers, the simplified filing process for tax returns and payments, and amendments to penalty rates, among others.

In January, President Ferdinand R. Marcos, Jr. signed into law the measure that seeks to streamline the tax system.

The act amends sections of the National Internal Revenue Code of 1997 and introduces several tax reforms.

Under Revenue Regulations No. 3-2024, all references to “gross selling price,” “gross value in money” and “gross receipts” will now be referred to as “gross sales” regardless of whether they are issued for goods or services.

The term “invoice” will also now be used instead of “sales/commercial invoices” or “commercial receipts.”

The regulations also cover the output value-added tax (VAT) credit on uncollected receivables.

“A seller of goods or services may deduct the output VAT pertaining to uncollected receivables from its output VAT on the next quarter, after the lapse of the agreed upon period to pay: Provided that, the seller has fully paid the VAT on the transaction: Provided further, that the VAT component of the uncollected receivables has not been claimed as allowable deduction,” it said.

Revenue Regulations No. 4-2024 govern the filing of tax returns and tax payments, allowing electronic as well as manual transactions.

It also contains a section on the removal of civil penalties for wrong venue filing. “The civil penalty of 25% of the amount due in case of filing a return with an internal revenue officer other than those with whom the return is required to be filed, shall no longer be imposed.”

Revenue Regulations No. 5, the BIR outline a risk-based approach in verifying VAT refund claims.

VAT refund claims are now classified into low, medium and high risk. “Medium- and high-risk claims shall be subject to audit or other verification processes in accordance with the BIR’s national audit program for the relevant year or with the current policies and procedures applicable to the year of application of the VAT refund,” according to the RR.

The medium-risk category requires the verification of at least 50% of the amount of sales and 50% of total invoices/receipts issued including inward remittances and proof of VAT zero-rating.

Meanwhile, high-risk claims require 100% verification for both sales and purchases.

“Claims filed by first-time claimants shall be automatically considered as high risk and shall remain as such for the succeeding three VAT refund claims,” the BIR said.

“In case of full denial of a claim, the succeeding claim filed shall be classified as high risk. For medium-risk claims, verification shall be adjusted to 10% if the assigned Revenue Officer finds at least a 30% disallowance of the amount of VAT refund claimed.”

Meanwhile, Revenue Regulations No. 6 imposes reduced interest rates and penalties for micro and small taxpayers.

Revenue Regulations No. 7 also implements amendments on registration procedures and invoicing requirements.

Under the Ease of Paying Taxes act, the VAT official receipt is removed as a requirement for substantiating refund claims and input and output taxes, making the VAT invoice the sole supporting document required in declaring output taxes and claiming input taxes for both sale of goods and services.

Revenue Regulations No. 8 implements the new classification of taxpayers.

Under the regulations, a micro taxpayer refers to those whose gross sales for a taxable year are less than P3 million; small taxpayers are those with gross sales of between P3 million and less than P20 million; medium taxpayers are those with gross sales of between P20 million and less than P1 billion; large taxpayer are those with gross sales are P1 billion and above.

Taxpayers are expected to file their annual tax returns on April 15 (Monday). This year, the BIR is expected to generate P3.055 trillion in revenue.

The BIR collects about 70% of the government’s revenue. — Luisa Maria Jacinta C. Jocson

US BPO firm scouting sites outside NCR

US BUSINESS process outsourcing (BPO) company Afni said that it is scouting sites outside the National Capital Region (NCR) to support growing demand for Philippine-based services.

“Afni is eyeing expansion beyond Metro Manila as we support the government in its goals for regional growth,” Khalid Khursheed, senior vice-president and country manager of Afni Philippines, told reporters on the sidelines of the launch of an Afni site in Laguna on Friday.

“Diversifying our footprint in the Philippines allows us to bring jobs closer to where our employees live. This also makes perfect business sense by creating redundancy in our operations across the country,” he added.

On April 13, Afni opened its third site in the Philippines at SM City Santa Rosa, which has a staffing target of 3,000 by the end of 2024.

The new site spans 9,400 square feet across five floors and will be serving various US clients, with the first being in the telecommunications industry.

“The Philippines continues to be a prime location for companies seeking skilled and dedicated professionals,” according to Ron Greene, president and chief executive officer of Afni. 

“Afni’s expansion into Santa Rosa demonstrates our commitment to supporting our clients and boosting the country’s economy by establishing our presence in major hubs outside of Metro Manila,” he added.

Mr. Khursheed said that Afni’s clients are demanding more agents even after the additional 3,000 that will be set to work this year.

“Our clients want us to actually add more agents. So we’re looking at Tower 3 of SM Santa Rosa, which will add another 1,000 seats (by) mid- or third quarter of next year,” he said.

“And outside Luzon… we are looking into going to Cagayan de Oro or Roxas City,” he added.

Afni currently has over 8,000 employees at its Fairview and Commonwealth sites. By 2025, AFNI hopes to increase staffing to around 12,000.

“We’ve been managing Afni for the last 12 years. So, I know what the country has to offer, and I know some of the challenges and restrictions, and I’ve worked around all of these,” Mr. Khursheed said.

“We know what we need to do to get to these numbers. And the infrastructure is there, the talent is there, so I don’t think there’s much to stop unless we have another COVID-19 situation, which I don’t think is going to happen,” he added.

Afni said it will require employees in Santa Rosa to work on-site, as it is required by the company’s US client.

When asked if this could hinder their plans to fill the 3,000 seats, Mr. Khursheed said: “I don’t think so because in Metro Manila, we have over 8,000 employees, and they prefer to work on-site because 80% of our employees live within a 30-minute commute.”

“And also, sometimes we have noticed that the employees do not have the right set-up to work at home because, you know, we need specific requirements, so we’ll bring them on-site,” he added.

He said that most of Afni’s clients require employees to work on-site for data privacy, while a small percentage, or 10%, allow working from home. 

“The work we do is highly complex, and our clients are very premium; they are among the Top 50 Fortune companies. They’re blue-chip companies, so really, really top-of-the line. The data that our employees are exposed to is very, very critical,” he said.

“As you can see, there are a whole bunch of cyberattacks happening in the Philippines and around the world. We do not want to have the data exposed elsewhere. On-site, we have strong security controls in place so no one can get in,” he added. — Justine Irish D. Tabile

Tobacco growers: Illegal vapes threatening farmer livelihoods

BW FILE PHOTO

TOBACCO farmers said the government needs to crack down on illegal vape products, calling them a threat to growers’ livelihoods.

“Illegal vapes further endanger the livelihood of thousands of Filipinos who rely on the tobacco industry for sustenance since these are replacing legal, tax-paid cigarettes as well,” Philippine Tobacco Growers Association President Saturnino Distor said over the weekend.

Mr. Distor added that the smuggled cigarettes have also reduced demand for locally produced tobacco leaf.

Republic Act 11900, or the Vaporized Nicotine and Non-Nicotine Products Regulation Act, regulates all imports and manufacturing of vaporized nicotine, non-nicotine, and novel tobacco products.

“Unlike heated tobacco sticks, vapes do not contain dried tobacco leaves and have no direct benefit to tobacco farmers… We need the help of the government to stop this ‘vapedemic’ and save the tobacco industry,” he said.

Separately, Bernard R. Vicente, chairman of the Federation of Tobacco Farmers Associations and Cooperatives, said that as consumers switch to vape products, demand for tobacco leaf continues to decline.

Mr. Vicente added that support from local government units in tobacco-producing areas has declined due to the lower excise taxes collected on tobacco products.

Under Republic Act No. 11346, 40% of tobacco excise taxes are earmarked for the Philippine Health Insurance Corp. and 10% are for the Department of Health’s Health Facilities Enhancement Program.

The remainder goes to the national budget and tobacco-producing areas to support farmers.

“Less excise tax collections from tobacco means less support for us farmers,” Mr. Distor said.

The Bureau of Internal Revenue reported a 16% decline to P135 billion in excise tax collections in 2023. This was attributed to an increase in the smuggling and distribution of illegal cigarettes and vape products.

Meanwhile, the National Tobacco Administration (NTA) said that tobacco prices have risen to more than P100 per kilogram (kg) due to high demand.

The NTA reported that the buying price for Class AA of flue-cured Virginia tobacco was as high as P113 per kg, well above the approved floor price of P97 per kg.

Prices for the prime class of both air-cured Burley-type tobacco and Native–type tobacco is expected to hit P100 per kg. The approved floor price for these varieties is P81 per kg.

“The tobacco buying price increase reflects market demand and crop quality as well as the presence of good weather and the increase of floor prices,” NTA Administrator Belinda S. Sanchez said in a statement last week.

Trading of flue-cured Virginia tobacco runs between February and June, while air-cured Burley and Native tobacco leaves trade between March and July.

Ms. Sanchez added that tobacco production may surpass the 43 million kg reported last year.

The major tobacco producing areas are Ilocos Norte, Ilocos Sur, La Union, Abra, Pangasinan, Isabela, and Cagayan.

The NTA said 2.2 million Filipinos are financially dependent on tobacco, including more than 430,000 farmers, farm workers, and their families. — Adrian H. Halili

Franchise industry says tax, regulation hindering growth

POTATOCORNER/FACEBOOK

THE Philippine Franchise Association (PFA) said that tax incentives and regulation become more complex the more its companies grow, putting them at a disadvantage to foreign competitors.

“Comparatively, foreign brands are more aggressive because they have backing. First and foremost, they have tax incentives; they have tax holidays when they are scaling up,” according to Sherill R. Quintana, chair of the council of past presidents of PFA, on the sidelines of Franchise Asia Philippines 2024.

“In the Philippines, it’s the other way around. When we’re scaling up, the more you’re taxed, the more you’re regulated … The support is at the startup level, where, in fact, when you graduate from that level, you need more support to be able to sustain your operations,” she added.

She said that the government should help make it easier for franchisors who are looking to go overseas to comply with the various international regulations.

“Why can’t we have our Food and Drug Administration (FDA) here to help our local brands who want to go to Australia, the US, or New Zealand, which have stricter guidelines, prepare them by making sure that they are compliant with their requirements?” she added.

She said because of the stricter rules in some foreign markets, some companies have to hire consultants to help with compliance.

Meanwhile, she said that the government should also support Philippine brands in registering their trademarks in multiple countries.

“In terms of the Madrid Protocol, for example, it’s very expensive for our member brands who want to be part of those programs,” she said.

“I think the government can help, maybe in terms of funding, to make it more accessible for the brands to apply for the Madrid Protocol,” she added.

According to the PFA, there are only 20 Filipino brands that have successfully gone international, while another 20–25 brands have expressed interest in going international.

Meanwhile, there are around 1,800 to 2,000 franchise brands and 200,000 franchise outlets operating in the Philippines. — Justine Irish D. Tabile

ADB: Region’s chipmakers can still bid to capture AI-driven memory demand

REUTERS

SOUTHEAST ASIAN chipmakers need to raise capacity to meet rising global demand for advanced memory chips for artificial intelligence (AI) applications, the Asian Development Bank (ADB) said.

In the Asian Development Outlook, the bank noted that the Philippines, Malaysia, Vietnam and Thailand account for a tiny share of memory chips and microprocessors relative to the leading exporters, Taiwan and South Korea.

“These economies may still benefit from the AI-driven demand for specific microchips, given their specialization in downstream services such as assembly, testing, and packaging, critical to the global semiconductor value chain,” according to the report.

The Philippines is looking to benefit from US CHIPS (Creating Helpful Incentives to Produce Semiconductors) and Science Act of 2022, which seeks to allocate $52.7 billion in federal subsidies to support chip manufacturing in friendly countries.

The Philippines needs to leverage its partnership with the US to establish its own front-end semiconductor facilities to meet global demand, according to the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI).

“Back when US Secretary (of Commerce Gina) Raimondo was here, she said that the US will triple the semiconductor volume in the Philippines. She was referring to the back-end as assembly, test, and packaging. But what we really want to have is the front-end semiconductor wafer fab for strategic reasons,” SEIPI President Danilo C. Lachica said via telephone. 

He said geopolitical tensions and the recent earthquake in Taiwan could pose supply disruptions on semiconductor wafers, which the Philippines imports.

The Philippines’ back-end semiconductor industry, which focuses on assembly, testing, and packaging, is also expected to benefit from subsidies to be provided by the CHIPS Act.

According to the ADB, China’s semiconductor export growth slowed in 2023 after global demand for photovoltaic cells dropped. An embargo on chip-making equipment exports to China could also hinder the latter’s production of microprocessors and memory chips.

“Southeast Asia’s economies provide younger, more abundant, and lower wage workers that can attract investments from large semiconductor manufacturers in East Asia as they diversify their production base,” the ADB said.

The Philippines must also come up with a “customized package” to encourage investment in Philippine semiconductors.

“We have high operating costs in power, logistics, water, cooling water, and even labor… so the package has to be customized according to the needs and interests of the potential investors in a wafer fab,” Mr. Lachica said.

The Philippines must also consider investing in renewables to lower power costs and restore the 5% gross income earned (GIE) tax incentive. “We had some capital flight, we had some investments that were changed because of that,” he said, referring to the tax incentive.

George N. Manzano, an associate professor of economics at the University of Asia and the Pacific, said improving logistics would help develop the Philippines as a semiconductor hub.

“Human resources… will be important, depending on the kind of semiconductor stage is going to be set up,” he said in a Viber message.

Mr. Lachica also called on the Commission on Higher Education to improve the engineering and applied science curriculum, Mr. Lachica said.

The Philippines only accounts for 3% of the region’s total semiconductor exports, according to the ASEAN+3 Macroeconomic Research Office (AMRO).

AMRO senior economist Andrew Tsang said the Philippine government, higher education institutions, and industry must collaborate to match semiconductor workers’ skills with industry demand.

“To enhance its competitiveness, besides attracting FDI (foreign direct investment) to bring in new technology and expertise, the Philippine workforce needs to be upskilled with appropriate training to enable technological adoption,” Mr. Tsang said in an e-mail.  

Meanwhile, AMRO expects global semiconductor sales to rebound this year, coming from a four-year low of a 9.4% contraction.

“The forthcoming recovery is partly driven by the ‘replacement cycle’ — the time it takes to replace old equipment, particularly items bought during the COVID-19 pandemic,” according to AMRO’s latest ASEAN+3 Regional Economic Outlook. 

More than 80% of the world’s semiconductor manufacturing come from high-income and developing economies in East and Southeast Asia, ADB said. — Beatriz Marie D. Cruz

MB receives LGU applications to borrow P48.9B in H2 2023

Bangko Sentral ng Pilipinas main office in Manila. — BW FILE PHOTO

LOCAL GOVERNMENT units (LGUs) sought Monetary Board opinions (MBOs) to borrow P48.9 billion in the second half of 2023, the Bangko Sentral ng Pilipinas (BSP) said.

In a statement, the central bank said it received a total of 159 requests for MBOs during the period.

“The total number of LGU requests and total amount were higher by 15.2% and 13.5%, respectively, compared with the 138 requests received amounting to P43.1 billion in the first semester of 2023,” it said.

Some P22.6 billion worth of opinion requests were generated by 20 cities, followed by 123 municipalities seeking opinions on P15.9 billion, 11 provinces proposing to borrow P10.3 billion, and five barangays requesting clearance to take on P109.3 million worth of debt.

The requesting LGUs were mainly from Central Luzon, Calabarzon, Bicol, the Western Visayas, the Central Visayas and Soccsksargen.

In terms of opinions issued, it said that “the MB rendered its opinion on 143 LGU proposed borrowings totaling P45.0 billion. The said MB issuances were for 125 requests received in the second semester of 2023 and 18 requests received in first semester of 2023,” the BSP said.

“The remaining 34 requests received in the semester under review are awaiting the submission of complete information and/or documentary requirements by the borrowing institutions,” it added.

Some 61.4% of the proposed loans were intended for infrastructure projects, such as farm-to-market roads, bridges, public markets, and multi-purpose buildings.

“Meanwhile, some LGU borrowings (19.5%) were intended for the acquisition of lots and/or site development for the eventual construction of various buildings/facilities as well as permanent working capital for the acquisition of palay from small farmers, and acquisition and installation of various e-governance systems.”

The remaining 19% of loans was used to acquire heavy equipment and procure vehicles.

Under the law, LGUs are required to request MBOs on the “monetary and external sector implications of their proposed loan/s prior to undertaking any credit operation.”

“This provision of the law stems from the BSP’s role as the government’s advisor on official credit operations. This process enables the BSP to monitor trends in public sector debt and assess their impact on the monetary sector and external payments position of the economy.” — Luisa Maria Jacinta C. Jocson

Energy efficiency recertification seen boosting compliance with RA 11285

MOREPOWER.COM.PH

THE proposed recertification of energy efficiency practitioners will help them comply with their obligations under the Republic Act (RA) No. 11285 or the Energy Efficiency and Conservation Act, according to the Philippine Energy Efficiency Alliance, Inc. (PE2).

“It would help energy efficiency practitioners remain true to their mission of helping the recently increased range of DEs (designated establishments) in the commercial, industrial and transport sectors comply with their obligations under RA 11285,” PE2 President Alexander D. Ablaza said in a Viber message.

“The recertification requirements demonstrate a linkage of EE practitioners’ work not only with DEs but also with the reporting and audit requirements of DEs,” he added.

The Department of Energy (DoE) drafted a department circular seeking the continuous implementation of the certification process for energy efficiency practitioners.

Energy auditors (EAs) and energy managers (EMs) should be certified with a validity of three years.

“The DoE was able to develop the training regulations for CEAs and CEMS which governed the initial phase of the certification,” according to the draft circular.

“Energy efficiency practitioners are still a scarce resource that need to be built up through time if the economy aspires to shave off up to 182 Mtoe (millions of tons of oil equivalent) by 2040 in energy savings due to energy efficiency improvements on the premises of DEs,” Mr. Ablaza said.

Mr. Ablaza said policy measures should be put in place to help the government monitor and ensure that certified energy efficiency practitioners are engaged in activities and not displaced and lost to other economic sectors.

“The PE2 generally supports the intent of the draft DoE department circular which imposes recertification requirements for certified energy managers, certified energy auditors, and certified energy conservation officers,” he said.

Mr. Ablaza has said that energy efficiency initiatives are needed to be acknowledged alongside renewable energy as an “energy resource” which also needs to put efforts into. — Sheldeen Joy Talavera

CSB blasts JRU in straight sets to keep the NCAA volleyball lead

CSB LADY BLAZERS — NCAA.ORG.PH

Games Monday
(Filoil EcoOil Arena)
7:30 a.m. — LPU vs AU (men)
10 a.m. — LPU vs AU (women)
2 p.m. — Letran vs EAC (women)
4 p.m. — Letran vs EAC (men)

KNOWING he will lose four of his cogs to graduation this year, College of St. Benilde (CSB) coach Jerry Yee has intentionally shuffled his rotation to prepare his young guns when their time to take over arrives.

It has paid dividends as the Lady Blazers chalked up their third straight win at the expense of the Jose Rizal University (JRU) Lady Bombers, 25-13, 25-12, 25-20, on Sunday to repossess the solo lead in NCAA Season 99 women’s volleyball at the Filoil EcoOil Arena.

Michelle Gamit, Jade Gentapa, Gayle Pascual and Cloanne Mondonedo, the four CSB regulars playing their final season, all significantly contributed despite splitting minutes with their successors.

It equally produced solid performances from the younger guys including Wielyn Estoque, who had eight points, as well as Chenae Basarte, who will take over as top setter when Ms. Mondonedo’s sun sets.

The result also extended CSB’s unshakeable streak to 32, which included a pair of mighty 11-game championship sweeps and seven just moments before the season was cancelled four years ago due to the pandemic.

Mr. Yee, however, isn’t taking note of their magnificent win rampage.

“We try not to mind those, we don’t even count,” said Mr. Yee.

The Lady Bombers dropped to 1-2. — Joey Villar

Securing a competitive advantage in the insurance industry

IN BRIEF:

• During tumultuous times, stakeholders expect insurers to deliver more value through greater protection, holistic solutions, and personalized experiences.

• By incorporating trust and “impact by design” into the company’s strategies, insurers attract more loyal customers, increase profitability, and reinforce relationships with partners and regulators.

Stiff competition, shifting regulatory policies, and increased investor expectations have elevated the importance of trust and transparency in today’s insurance industry. Investors are seeking not only greater coverage that spans years or decades but also ethical practices and long-term viability. This trend underscores the current investor climate where discernment is especially airtight, promoting healthy and sustainable practices within the industry.

However, this development comes with its own set of challenges for insurers, including developing robust risk management mechanisms and adopting newer technologies across a range of services. Amidst growing competition, the main challenge for most insurers will be transforming their organizations into “preferred partners” instead of mere product providers.

These trends and insights were highlighted in the EY Global Insurance Outlook 2024; furthermore, this comprehensive report explores purposeful strategies to help insurers achieve sustainable performance given the ever-evolving nature of the industry.

The report provides salient insights, giving insurers the following key points of action to secure a competitive advantage.

PRIORITIZE TRUST
Trust is the bedrock of the insurance industry — the core of every interaction, communication, and policy. Moreover, trustworthiness actively guides product development, customer-facing process automation, ecosystem partner evaluation, and technology adoption.

Consumers will trust firms that provide the right advice, create the right solutions, and provide products and services that deliver tangible societal value. According to the EY Global Insurance Survey 2021, most consumers (79%) trust insurers that demonstrate genuine commitment to environmental, social and governance (ESG) principles when making purchasing decisions. Additionally, 43% prefer purchasing from companies that positively contribute to societal welfare, despite higher costs. 

By incorporating trust into the company’s strategies, insurers can attract loyal customers, increase profitability, and reinforce relationships with partners and regulators.

ENSURE TRANSPARENCY AND PRIVACY
While insurers should take advantage of generative AI (GenAI) to reduce the savings and protection gap and satisfy new customer demand, companies should also be mindful of its actual and perceived risks. This gap refers to the shortfall between what individuals have saved for their future needs and what they should ideally have to adequately protect themselves or their assets against various risks, such as health issues, job loss, and damage or loss of property.

The EY European Financial Services AI Survey 2023 showed that privacy (31%) ranks as the top concern among European Insurance executives around the ethics of GenAI followed by discrimination, bias, and fairness (26%); and transparency and explainability (21%).

More than just legal and regulatory requirements, transparency and privacy are key components to establishing and maintaining client trust. Because data privacy is a significant public concern, companies must secure investor information and maintain transparency regarding its use and access.

REDESIGN, SIMPLIFY, AND PERSONALIZE YOUR PRODUCTS
Given the industry’s dynamic nature, prioritizing customer-centricity has emerged as the strategic “north star” for all insurance companies. This involves providing customized products that are convenient to procure, cost-effective, and augmentable with supplementary services and personalized recommendations. 

Prioritizing the needs and preferences of customers requires companies to undergo a holistic transformation across various aspects of their operations. This includes updating technology infrastructures, redesigning product portfolios, and restructuring organizational setup to better engage and serve new and existing customers.

Precise customer knowledge is the foundation for more personalized service and richer experiences delivered via preferred channels. According to EY Tech Horizon Global Survey 2022, 9% of global insurers plan to use AI and data science to drive product innovation through new offerings and personalization.

INNOVATE WITH DATA FOR VALUE
Revisit existing data from a new perspective, one that delivers value-driven solutions to your investors and partners. During tumultuous times, stakeholders want insurers to deliver more value through comprehensive policies, holistic solutions, and personalized experiences.

EMBRACE ‘IMPACT BY DESIGN’
The “impact by design” principle harmonizes the interests of the planet, people, and profit in developing products, services, or solutions that deliver societal value. Incorporating this into the company’s strategy leads to stronger customer acquisition and loyalty, higher employee satisfaction, and improved access to capital.

Nowadays, compliance-driven thinking and expanded philanthropic endeavors are imperative. Specifically, product innovation, new business models, and purposeful investments can help insurers unlock growth as they safeguard themselves against climate risk, promote financial well-being, and encourage physical and mental health.

ENGAGE REGULATORS TO ADDRESS PROTECTION AND SAVINGS GAPS
Proactively addressing consumer protection and savings gaps with authorities and regulators demonstrates the commitment of an organization to building trust and confidence in the market, shaping a more favorable business environment for everyone.

MEASURE TRUST EFFECTIVELY
To evaluate investor trust or perception, organizations must first establish specific metrics. Quantifying trust allows the company to track progress, identify pain points, and cultivate integrity among stakeholders.

Having a high degree of trust is a hallmark of the world’s top insurance brands. The most trusted insurers have a larger and more loyal client base, increased profitability, and more lucrative relationships with partners and regulators.

As highlighted in the 2024 EY Global Insurance Outlook, firms that don’t address today’s historically low levels of customer trust will be vulnerable to rising competition from outside the industry, including firms from the technology, automotive, retail, consumer goods, and banking sectors. An insurance industry that lacks trust will struggle to build strong customer relationships and grow its market share.

STRENGTHEN DATA SECURITY
GenAI promises to revolutionize risk assessment, claims processing, marketing, sales, and other essential business functions. Consequently, senior leaders must take the time to establish robust governance models and policies that ensure the responsible and ethical use of AI. Identifying the full range of risks, which includes data breaches and reputational issues, and designing the right framework for managing them are the top priorities.

Data security is non-negotiable for stakeholders, so strong safeguarding measures are necessary to increase investor confidence in the brand.

If insurers don’t deliver what the consumers want — precisely when, where, and how they want it — customers will take their business elsewhere.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the authors and do not necessarily represent the views of SGV & Co.

 

Bernalette L. Ramos is an assurance partner and the insurance sector reader, and Charisse Rossielin Y. Cruz is a business consulting partner and the insurance sector deputy leader, both of SGV & Co.

Scheffler takes charge at Masters; Woods struggles

AUGUSTA, Georgia — Scottie Scheffler birdied his final hole to emerge from a packed leaderboard and grab a one-shot lead over Collin Morikawa after the third round of the Masters while Tiger Woods endured his worst major round as a professional on Saturday.

Mr. Scheffler, who used a back-nine eagle to get his round back on track, carded a one-under-par 71 on a firm and fast Augusta National layout to reach seven under on the week and in position to win a second Masters.

With a win, Mr. Scheffler would become the 18th player to win the Masters multiple times and the first to accomplish the feat since Bubba Watson in 2014.

“Being patient out there I think is really important,” said Mr. Scheffler. “Especially on a day like today. It was a frustrating day to be playing this golf course. It was so challenging.”

Mr. Morikawa, who is seeking the third leg of the career Grand Slam of golf’s four majors, began his day with three consecutive was alone in second place after a three-under-par 69 that was one shot off the day’s low round.

Max Homa (73), who along with LIV Golf’s Bryson DeChambeau (75) held a share of the halfway lead with Mr. Scheffler, was a further shot back in third while Ludvig Aberg (70) of Sweden was three shots off the lead in his major championship debut.

Mr. DeChambeau, who struggled with his putting most of the day, drove it into the trees at the par-four 18th, pitched out to the fairway and then holed out from 77 yards for an unlikely birdie that put a spring in his step.

“I just figured was easier than putting,” joked Mr. DeChambeau.

Mr. Scheffler had dropped out of the lead after a shaky start to the back nine where he followed a double-bogey at the par-four 10th with a bogey at the 11th.

But an unflustered Mr. Scheffler joined Mr. Morikawa atop the leaderboard with a 31-foot eagle putt at the par-five 13th where his approach shot looked ready to settle some 10 feet from the hole before it suddenly gathered speed rolled away.

“I didn’t know whether or not it was going to get there, and it kind of just nudged right over the edge and went in,” said Mr. Scheffler. “So it was exciting, and it was nice to be able to steal a couple shots there on 13 and get back in the tournament.”

Mr. Scheffler then picked up another stroke at the par-five 15th where he got up and down for birdie after his approach shot from 238 yards sped right off the back of the green and then offset his bogey at 17 with an eight-foot birdie at the last.

Denmark’s Nicolai Hojgaard, who like Aberg is seeking to become the first Masters rookie to win a Green Jacket since 1979, was leading after three birdies around the turn but then made five consecutive bogeys to slide down the leaderboard.

STRUGGLING WOODS
Tiger Woods, fresh off his Masters record-setting 24th made cut, began his third round seven shots behind the leaders and hoping his injury-ravaged body would hold up and allow him to move into contention.

But Mr. Woods looked worn out from playing 23 holes on Friday and suffered an unwanted personal milestone with a 10-over-par 82 that tied the day’s highest round.

“Just hit the ball in all the places that I know I shouldn’t hit it,” said Mr. Woods. “And I missed a lot of putts. Easy, makeable putts.”

Following a three-putt bogey at the par-three fourth, Mr. Woods drained a fist pump-inducing birdie putt from 19 feet at the fifth before he suddenly started to unravel.

Mr. Woods bogeyed the par-three sixth after his tee shot landed behind the green, made a double-bogey at the seventh where he chipped into a bunker, carded another double at the eighth and a bogey at nine where his approach found another sand trap.

The 15-times major winner then mixed five bogeys with a lone birdie on the closing stretch.

Rory McIlroy, who began the day 10 shots off the lead and seeking a low score to boost his hopes of completing the career Grand Slam of golf’s four majors, carded a one-under-par 71.

“All I can do is come here and try my best. That’s what I do every time I show up. Some years it’s better than others,” said world number two Mr. McIlroy. “I’ve just got to keep showing up and try to do the right thing.” — Reuters

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