Declining inflation seen driving insurance takeup

INSURANCE penetration in the country is seen increasing with the projected downtrend in PHILIPPINE INFLATION.

Manulife Philippines Chief Marketing Officer Sonali Verma said in a press briefing on Monday that with the easing of inflation, individuals now have ample opportunity to allocate funds for health care insurance.

“I think, again, counterintuitively after Covid, Filipinos do want to protect themselves because they’ve seen the ill effects of not being protected,” Verma said.

“So, I think it will settle down. Sometime in the next couple of years when hopefully inflation will keep trending down and the perception of health care cost, we can get a hold of, then we should see more solutions like Healthflex or FutureBoost retirement taking root,” she added.

Inflation has settled within the 2- to 4-percent target range of the Bangko Sentral ng Pilipinas (BSP) for three consecutive months.

In February, however, inflation rose to 3.4 percent due to the surge in rice inflation, snapping the four-month downtrend in January at 2.8 percent.

Verma added that younger people are becoming more aware of the need to prepare for retirement.

“I think the newer generation is becoming more aware of how much it will cost when they retire. They are trying to save and put away for their later years and taking care of their health. So, that number [insurance penetration] can go up,” she said.

Currently, the insurance penetration rate in the Philippines, standing at 1.68 percent, falls below the Southeast Asia average of about 4.0 percent, and notably lower globally, at 7.0 percent.

Within the region, the Philippines closely follows Vietnam but trails behind Thailand and Malaysia, which have nearly 6.0 percent, and Singapore, which boasts 10 percent.

“The number is not that off,” Verma said. “But specifically in the Philippines, the awareness has to go up in terms of how much is needed to protect yourself and your family.”

“I think there is a bit of a skew in appreciating that very little is needed to get started,” she added.

“We need to do a better job of educating [people] that it’s (insurance) not that expensive. And digital would be a great way to do that,” Verma added.