The Philippine Insurance Commission (IC)
recently reported that the life insurance sector’s total premium revenues of
P229.9 billion through the third quarter of 2023, with Annual Premium
Equivalent (APE) premiums on new insurance sales of P46.6 billion, increased by
13.9% compared to the same period in 2022. APE is the annual total value of all single and recurring
premium policies.
Growth in new life premiums comes from the sale
of “good old fashioned” traditional life insurance. As sales of variable life
insurance eased, owing to the volatility of equity markets the past several
years, life companies have turned to traditional life sales to shore up new
business.
“Acquiring life insurance coverage goes well
beyond securing a family’s financial future,” said veteran insurance
practitioner, Renato A. Vergel De Dios, President and CEO of BDO Life Assurance
Company, Inc. (BDO Life).
Very few Filipinos are aware of how the life
insurance industry participates in nation-building by virtue of its ability to
pool together long-term capital that an emerging economy like the Philippines
critically needs. Premiums generated, especially from traditional life
insurance sales, are well poised to do exactly this.
Insurance companies help fuel economic growth by
strategically channeling long-term funds generated from premiums into areas
like infrastructure development and manufacturing capacity expansion, to name a
few, that serve as catalysts for national development. The Asian Development
Bank (ADB) has emphasized the pivotal role of such investments in sustaining
economic progress.
By encouraging all Filipinos, including Overseas
Filipino Workers (OFWs) deployed all over the world, to acquire life insurance
coverage, insurance companies protect their earning capability and fortify
family financial security. At the same time, the amounts devoted to premiums
contribute to forming long-term capital funds which, when invested, spur the
nation's development and financial prosperity.
Life insurers are among the largest corporate
investors in the country, given their access to long-term capital. “We hope
that our investments as an industry create ample material and local job
opportunities down the road so as to help minimize the need for Filipinos to
endure isolation from their loved ones in search of meaningful work abroad,"
added Vergel De Dios.
Bancassurance
business
With more and more Filipinos recognizing the
value of life insurance protection, BDO expects bancassurance to remain a
consistent, complementary contributor to its overall financial services
business.
“The steady rise of life insurance sales over
the years clearly indicates the growing awareness of the importance of
insurance protection among Filipinos," said Vergel De Dios.
BDO Life, the Bank’s life insurance carrier,
exhibited strong business recovery in 2022 to claim the 4th spot in new sales,
measured in terms of New Business Annual Premium Equivalents (NBAPE). NBAPE is
a weighted measure of premiums from new business.
