Digitalization and financial literacy programs will play key roles to increasing the contribution of the insurance sector to the economy, Insurance Commissioner Reynaldo Regalado said.
Regalado said in his keynote speech at the first Life Insurance Convention Philippines in Cebu City that while total assets, net worth, invested assets and premiums increased based on figures collated by the Insurance Commission as of the first quarter of 2023, the insurance density and insurance penetration remained low.
Insurance density stood at P872.56 per Filipino, while insurance penetration was at 1.75 percent. Insurance density refers to the average spending of each individual on insurance, while insurance penetration refers to the contribution of the insurance sector to the gross domestic product.
Regalado expressed optimism that through financial literacy programs and digitalization, more Filipinos would be encouraged to be insured so that the protection gap in the economy could be reduced.
“I am optimistic that our efforts are bearing fruit, especially as total premiums collected by life insurance companies from their new business has increased to P15.47 billion, or by 18.16 percent, year-on-year,” he said.
Data showed that as of the end of the first quarter of 2023, life insurance companies collected P15.47 billion in premiums considered as new business, which is an 18.16-percent increase from the P13.10 billion premium collection from new business during the same period last year.
The Insurance Commission also introduced digitalization programs such as the online submission and approval of new insurance products, and is set to release the regulatory guidelines on Islamic insurance within the year.
Regalado said a high financial literacy among the population would translate to more Filipino families being covered by insurance to guard against financial emergencies arising from death, injury and damage to livelihood.
“Financial inclusion is not only about increasing the percentage of the population who have access to financial products and services. It is more about reducing the demographic disparities between that portion of the population who are unable to participate in the formal financial sector and those who are unable,” Regalado said.
He said life insurance agents and underwriters can help in advocating financial literacy and prudence among our people, for the ultimate goal of financial inclusion for all.
“May I thus call upon your organizations to continue supporting financial literacy programs that provide awareness of the benefits of financial products and services, particularly insurance policies that guard against risks that can result in financial ruin,” he said.