Changed perspectives on insurance among Filipinos

The pandemic has changed many aspects of the consumer’s life, most significant of which is a natural reassessment of priorities to favor health and well-being. The Insurance Commission (IC) found that Filipinos are putting more money on insurance, from an average of P723.43 per individual a year ago to P912.2 this year, up 26%.

As a result, insurance penetration, or the contribution of the insurance industry to the economy, soared to an all-time high of 2.3% of the gross domestic (GDP) in the first quarter from 1.76% in 2020. And while Insurance Commissioner Dennis Funa said that while the data does not reflect a normal continuation of growth because of a number of factors, membership in the industry has seen an increase during the duration of the health crisis.

Similarly, more Filipinos are seeking microinsurance coverage under the pandemic. According to unaudited quarterly reports from microinsurance providers such as mutual benefit associations and life and non-life insurance companies, the IC said the total estimated number of lives covered by microinsurance products ending the fourth quarter of 2020 reached 50.35 million. This marked an 11.56% increase from the 45.13 million lives covered the fourth quarter of 2019.

“The data is a bit warped nowadays. It does not reflect a normal situation. The reason is that the GDP has gone down from the previous years. So, the denominator does not reflect a continuity of growth,” Mr. Funa had told reports.

The surge in demand for insurance, however, reflects a change in the consumer seen by other studies such as that of Manulife Philippines’ research on “Understanding Filipino Sentiments Towards Health and Critical Illness.” The study found that while many Filipinos still face barriers in embracing better financial and lifestyle habits, many recognize the increased importance of prioritizing their health. Many Filipinos according to the study are reprioritizing health out of concern for their families’ welfare, especially in the face of the financial burdens of illnesses.

“These evolving times have opened our eyes to the importance of health and wellness, and importantly, made many Filipinos appreciate the value of insurance protection,” said Melissa Henson, senior vice-president and chief marketing officer of Manulife Philippines.

“While Filipinos are universally aware of the importance of staying healthy, we saw that their behaviors are largely influenced by fears and worries, including concern for their family and feeling financially unprepared for illnesses.”

Furthermore, during the pandemic, health, safety and family make up the top three worries of Filipinos, followed by concerns about work, well-being, savings, investment, home and community, insurance, friends, me-time, and love.

Another study by Pru Life UK found that more Filipinos — the younger generation in particular — have been making wise decisions with regard to finances especially in terms of insurance coverage.

According to the latest research from the AI and Data Analysis Center, the advanced technology solutions division of Pru Life UK, the market for health riders or additional benefits attached to life insurance policies remain resilient in spite of the country’s disrupted and slowing economy, suggesting that Filipinos are allocating more of their hard-earned incomes away from other options in favor of health protection.

“This finding validates our assumption that health protection has become a necessity for a growing number of Filipinos, even in these challenging times,” said Pru Life UK President and CEO Antonio De Rosas.

“The resilience of health protection in the Philippines is in line with the trend we are observing across the region, where health insurance has shown a steady growth in most of our markets despite local lockdown restrictions. This is likely due to an increased awareness of the importance of health protection in facing the pandemic,” Prudential Corporation Asia Chief Health Officer Andrew Wong said.

“Addressing this reality is a matter of making insurance products more accessible to meet the growing needs. The pandemic has taught us that the mode of delivery is as important as the price for customers. In this respect, our industry has been fortunate in the sense that we have been able to continue with our operations despite unprecedented restrictions,” Mr. De Rosas added. — Bjorn Biel M. Beltran