A look at the Philippines insurance market from GlobalData;
The Philippine life insurance industry is forecasted to grow at a compound annual growth rate (CAGR) of 5.4% from PHP319.8 billion ($5.8 billion) in 2024 to PHP395 billion ($7.1 billion) in 2028, in terms of net written premiums (NWP), according to GlobalData, a leading data, and analytics company.
According to GlobalData’s Insurance Database, the life insurance sector in the Philippines is expected to record an annual growth rate of 3% in 2024, driven by economic recovery, and the country’s demographic trend of an aging population with a growing life expectancy.
Prasanth Katam, Insurance Analyst at GlobalData, comments: “The real GDP in the Philippines grew by 5.6% in 2023, driven by robust consumer spending, a strong labor market, and a recovery in tourism and financial services activities. The GDP is further expected to grow by 6.1% in 2024 and 6.3% in 2025, which will support the growth of life insurance.”
The country’s aging population with a growing life expectancy will also lead to an increase in the demand for various life insurance and pension products. GlobalData predicts that the share of the population aged 65 and above is expected to increase to 6.1% by 2028 from 5.4% in 2023.
Foreign currency-denominated life insurance products, particularly those in US dollars, have gained popularity among Filipinos due to their potential currency appreciation and higher interest rates as compared to peso-denominated investments.
Katam adds: “Insurers in the Philippines have responded to this demand by introducing investment-linked life insurance policies denominated in US dollars, providing customers with the opportunity to invest in foreign currency while enjoying insurance benefits.”
The growth of the life insurance sector in the Philippines can also be attributed to favorable regulatory developments and government support. In April 2024, the Cebu provincial government approved the Sugbo Segurado plan, an accident and life insurance plan designed to cover a wide range of government officials and workers. The plan aims to provide financial security to provincial government employees in Cebu province and promote insurance penetration.
The Philippines is also considering easing regulations for Overseas Filipino Workers (OFWs), who are a potential major consumer segment for insurers. Currently, OFWs are required to be physically present in the country to purchase life insurance from local companies, hindering their access to financial protection. Simplifying access to insurance for OFWs would incentivize them to save and send more money to the Philippines, ultimately stimulating growth in the sector.
Katam continues: “Digital transformation is also propelling the expansion of the life insurance industry in the Philippines. Insurers are investing heavily in technology to streamline operations, enhance customer experience, and improve policy distribution.”
The life insurance industry in the Philippines has witnessed significant innovation and initiatives aimed at promoting insurance penetration over the last five years. Insurers have leveraged AI and data analytics to offer policies that are tailored to the needs of specific customers. This shift from a product-centric to a customer-centric approach has been made possible by the availability of digital insurance products and easy access to purchase these products via digital platforms.
Katam concludes: “The outlook for the life insurance industry in the Philippines is positive, driven by demographic trends, favorable regulatory developments, and the increasing adoption of technology. However, catering to the insurance demands of an aging population will be a focus area for insurers over the next five years.”
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