In Focus: GlobalData Report Looks at Philippines Market

The Philippines’ general insurance industry is set to grow at a compound annual growth rate (CAGR) of 11.6% from PHP136.4 billion ($2.4 billion) in 2023 to PHP211.5 billion ($3.7 billion) in 2027, in terms of gross written premiums (GWP), forecasts GlobalData, a leading data, and analytics company.

GlobalData’s Insurance Database reveals that the Philippines’ general insurance industry is estimated to grow by 17.8% in 2023, supported by strong economic growth, construction of new infrastructure projects, and rising demand for natural catastrophic (nat-cat) insurance.

The sustained economic growth will support key sectors of the economy such as automobile, construction, real estate, and travel & tourism as well as export & import activities, which in turn will drive the general insurance growth in the country. GlobalData forecasts the country’s real GDP growth to be around 5.5% in 2023 and 5.6% in 2024.


Manogna Vangari, Insurance Analyst at GlobalData, comments: “Property insurance is the leading line in the Philippines general insurance market, which is estimated to account for 36.8% share of the GWP in 2023. It is forecast to grow by 15.9% in 2023, supported by the increasing demand for nat-cat insurance policies as the Philippines is prone to typhoons and earthquakes.”

According to the estimates by Department of Finance in September 2022, due to increased frequency of nat-cat events because of climate change, the Philippines is expected to witness total losses of PHP1.5 trillion ($268.3 billion) over the next 50 years.

In January 2023, continuous floods, storms, and landslides in several regions of the country have resulted in large scale destruction of property. To provide financial security to public infrastructure, the government is planning to implement an insurance plan as well national indemnity insurance plan.

Property insurance will also benefit from the growth in the construction sector and investments in large infrastructure projects. According to the National Economic and Development Authority (NEDA), as of August 2022, PHP4 trillion ($75.3 billion) worth of infrastructure projects are planned for completion by 2028. This will support the property insurance, which is forecast to grow at a CAGR of 11.2% over 2023-27.

Motor insurance is the second largest line in the Philippines general insurance market and is estimated to account for a 24.3% share of premiums in 2023. Motor insurance is forecast to grow at a CAGR of 11.2% over 2023-27.

According to the Chamber of Automotive Manufacturers of the Philippines, automobile sales year-on-year increased by 44.8% in May 2023. Additionally, the government initiative to promote electric vehicles will support the motor insurance growth.

In February 2023, the government implemented a zero-tariff rate on fully electric vehicle models until 2028 to increase the demand for such vehicles in the country. Consequently, the Philippines electric vehicle distributors expect 30% rise in EV sales in 2023.

Marine, aviation, and transit (MAT) is estimated to account for a 5% share of premiums in 2023. It is forecast to grow at a CAGR of 6.3% over 2023-27, supported by increased export and import activities, favorable movements in air travel, and offshore energy developments.

Liability, financial lines, and miscellaneous insurance are expected to account for the remaining 33.9% share of GWP in 2023.

Vangari concludes: “Sustained economic growth along with the rapid growth in the construction and automobile sectors presents a positive outlook for the general insurance sector over the next five years. The general insurance penetration in the Philippines’ is 0.6% in 2023, significantly lower compared to the advanced APAC economies like Australia (3.6%), New Zealand (2.3%), and Japan (1.8%). This indicates a huge growth potential for general insurers.”

About alastair walker 12548 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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