Enhancing insurance penetration in the Philippines

The Philippine insurance sector reached new highs in 2025, but it still faces the challenge of reaching more Filipinos moving forward.

According to the Insurance Commission (IC), the sector posted total premiums above P500 billion last year, with life insurance accounting for the bulk of industry premiums. In a more interesting note, insurance density, or per capita spending, reached a record P4,385 in 2025, up from P3,894 a year earlier. This points to rising consumer participation, though coverage remains uneven across income groups. Insurance Commissioner Reynaldo A. Regalado even said the growth shows how Filipinos value “continuous sense of security,” prioritizing protection over discretionary spending.

Insurance penetration, or premiums as a share of gross domestic product, improved to about 1.78% to 1.79% in 2025 from 1.67% in 2024. Despite such progress, however, the IC noted that the level remains below its 2% target and lags behind many Asia-Pacific markets.

Regulators and industry players place microinsurance at the center of efforts to expand coverage, particularly among low-income households.

Under Republic Act No. 10607, microinsurance products cap premiums at 7.5% of the daily minimum wage for non-agricultural workers in Metro Manila, with benefits limited to 1,000 times the same wage.

Efforts to raise insurance participation extend beyond product design by adopting digital tools and expanding distribution channels.

The Bangko Sentral ng Pilipinas (BSP) is set to revise bancassurance guidelines to allow banks to offer insurance products from multiple providers, subject to contractual arrangements. The move aims to widen consumer access and allow insurers to reach bank clients beyond existing conglomerate structures.

Digital platforms also play a growing part in distribution. Several insurers, including AIA Philam Life, Pru Life UK, and FWD Life Insurance, have implemented AI tools for underwriting, claims processing, and customer service.

The IC also joins a government-backed initiative to launch an AI-powered complaints management system under the Internet Transactions Act. The platform allows consumers to file and track complaints through digital channels, with mandated timelines for resolution.

The Philippine Health Insurance Corp. (PhilHealth), meanwhile, is integrating AI for claims validation and fraud prevention, following a ransomware attack in 2023.

While life insurance leads the current market, the non-life segment is expected to expand amid rising climate risks.

The IC noted that natural disasters are driving demand for property and catastrophe coverage. In fact, property insurance accounts for nearly 40% of general insurance premiums, followed by motor insurance at about 23.5%.

Parametric insurance products, which trigger payouts based on predefined conditions such as weather events, are being introduced to speed up claims for governments, businesses and households.

Projections show that general insurance premiums could grow at an average annual rate of more than 10% through 2029.

“We’ll make the assessment after reviewing other risks. What’s important is improving coverage,” Mr. Regalado said in a statement.

He added that collaboration will be needed to broaden access and raise participation.

“Through programs on financial literacy and inclusion, together with strengthened regulatory supervision, we aim to broaden access to insurance and achieve even greater protection for all Filipinos this year,” Mr. Regalado explained. — Mhicole A. Moral