MANILA, Philippines – The Philippine insurance market remains the smallest among the five largest economies in the Association of Southeast Asian Nations (Asean-5) in terms of assets and premiums, based on a recent study of the United States Agency for International Development (USAID).
USAID’s Advancing Philippine Competitiveness (COMPETE) project found the insurance markets in the Asean-5 appear to be the least developed.
But among the Asean-5, composed of Indonesia, Malaysia, Philippines, Singapore and Thailand, the Philippines had the smallest insurance market.
The Philippine life insurance market is worth $16.6 billion in assets and $3.8 billion in premium earnings.
“This is considering that the Philippines was second to Indonesia in terms of the number of life insurance companies, the findings suggest that its life insurance sector had been dominated by small companies,” the report said.
At the time of the study, the Philippines had 32 life insurance companies while Indonesia had 45. However, Indonesia had $21 billion in assets and $13.1 billion in premium earnings.
The Philippine life insurance market penetration was the second lowest at 1.7 percent while its insurance density, or average spending of each individual on insurance, was the lowest at $41 per individual.
Meanwhile, Singapore had the largest life insurance market, with $132.8 billion worth of assets and $16.8 billion premium earnings. Market penetration is at 5.9 percent while insurance density is at $2,388 per individual.
The same goes for the Philippines in terms of the non-life insurance market, which is the smallest in the region. Its non-life insurance market had worth $3.4 billion in assets and $1.3 billion in premium earnings.
Thailand was the largest in terms of assets at $15.8 billion while Malaysia was the largest in terms of premiums at $4.8 billion.
The Philippines was also the second to the lowest in terms of non-life insurance market penetration at 0.5 percent and in terms of non-life insurance density at only $12 per individual.
In order to expand the life and non-life insurance market, the report said the Philippines must continue to liberalize the financial system, especially with the passage of Republic Act (RA) 10641, which allows the entry of more foreign banks in the country. -Danessa O. Rivera (The Philippine Star)
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