Sun Life sees insurance market expanding as outlook improves

SUN LIFE of Canada ( Philippines), Inc. sees a bigger market for insurance by the end of the year as economic uncertainties ease following the extension of a looser quarantine in the country.

Sun Life Philippines said the continued general community quarantine (GCQ) in Metro Manila signals greater economic stability as more people can return to work and save up for insurance amid the coronavirus disease 2019 (COVID-19) crisis.

“Unlike before when insurance-awakened individuals took a wait-and-see stance while recognizing the greater risks that the pandemic has brought to their lives and health, but would not part with their cash to maintain liquidity, they would correspondingly loosen up,” Sun Life Philippines Chief Executive Officer Benedict C. Sison said in an e-mail.

Metro Manila will remain under eased lockdown measures this month. Under GCQ, there are more routes for public transportation and businesses, such as hair salons and gyms, can reopen. Restaurants can also accept dinein customers.

The Sun Life Philippines chief said increased business operations will strengthen demand for investment- linked products as its clients are expected to regain shares of profits from various companies.

“The stirring up of economic activity in the last quarter of this year by an upgraded quarantine status in the National Capital Region should also help perk up the investment landscape that will boost recovery efforts of insurance companies,” Mr. Sison said.

Aside from looser quarantine measures, Mr. Sison expects the decline in coronavirus cases to boost economic prospects and encourage consumer spending.

“The favorable signs from the slowing down of new infection cases, the declared flattening of the curve by health experts and the bright outlook on the availability of a vaccine by early next year should bring about brighter days ahead,” he said.

Premiums earned by the insurance industry, composed of all life and nonlife insurance companies and mutual benefit associations, increased by 10.53% year on year to P78.15 billion in the first quarter, the Insurance Commission (IC) reported last month based on insurers’ unaudited quarterly reports.

The life insurance sector booked a premium income of P60.9 billion in the first quarter, up by 12.02% from P54.4 billion in the same month last year, which the IC said was attributable to the increase in variable life insurance premiums of 15.22%. Traditional life insurance products also posted an overall increase of 4.28%.

However, life insurers saw their net worth decline by 19.83% to P201.6 billion in the quarter due to a decrease in fluctuation reserves and the market value of their investments. —