Low Philippine insurance penetration cited

INSURANCE penetration in the Philippines remains low due to lack of financial literacy and awareness, according to Sun Life of Canada (Philippines), Inc.

“There’s a lot of financial literacy that we still need to work on,” Sun Life Philippines Chief Distribution Officer Al D. Quitangon said in an interview on Wednesday. “We need to continue to educate more Filipinos on the importance of financial security.”

Sun Life wants more Filipinos to understand how insurance benefits them especially with the Philippines’ young demographics, he added.

The Philippines’ insurance penetration stood at 1.68% — the ratio of premiums to gross domestic product — at the end of the third quarter, according to data from the Insurance Commission (IC).

“When it catches you by surprise, we don’t want more Filipinos to experience that financial drought or financial dilemma when unexpected events in their life happen,” Mr. Quitangon said.

He said awareness is still key for Filipinos to appreciate insurance more. “The younger generation really would like to have a purposeful and balanced life. They want to work; they want to enjoy life at the same time.”

“It’s taking out the fear.

To take out the fear is simply education and awareness. If you’re more aware, then you get less scared,” he added.

Filipino adults who had insurance fell to 17% in 2021 from 23% in 2019, according to the Bangko Sentral ng Pilipinas’ (BSP) financial inclusion survey.

Only 2% of Filipinos correctly answered all six basic financial literacy questions, while 69% correctly answered half of the questions.

Literacy efforts should focus on the youth because they account for the majority of the working population, Mr. Quitangon said.