Without any doubt, like it or not, we now live in a VUCA world — volatile, uncertain, complex and ambiguous. Just over the past two-and-a-half years, we have been besieged by momentous life changing events that came unexpectedly out of the blue. Covid has wreaked havoc on people's lives, with 615 million infected and 6.5 million deaths, as of this writing. And just as the world began to breathe somewhat easier with vaccinations gaining ground, the Ukraine-Russia war erupted. It sent all nations into an economic tailspin as oil prices ascend uncontrollably, with soaring inflation closely following its path.

As the days of hostilities and rising prices of commodities and goods turned into months, upending earlier hopeful predictions that the inflationary surge is merely transitory, because cooler heads among the geopolitical protagonists will prevail, central bankers have now been boxed into a corner and left with no choice but to shadow closely the ceasingly upward trajectory of US interest rates. This is seen as potentially veering the world closer to the edge of greater economic hardships.

In such a VUCA situation that we are faced with, aside from resorting to the heavens for some miraculous relief, the youthful wise and wrinkled wizened among us are surely looking at how to best manage the evolving risks through a traditional management tool — hedging or insuring against possible losses that could unexpectedly arise from an uncontrolled event.

Corporations, of course, are accustomed to such risk mitigation techniques. But what about the ordinary Juan like you and me? How do we cover the risks on personal properties, our health and loved ones left behind?

The obvious and simplest recourse is by buying insurance, a financial product that was introduced in the Philippines as early as the Spanish era when Lloyd's of London appointed a British local representative, Strachmann Murray & Company, to sell insurance coverage against commercial risks. But it was Sun Life Assurance of Canada that first introduced life insurance in our country in 1898, followed by the first non-life insurance, Yek Tong Lin Insurance in 1906.

Today, there are 94 licensed insurance companies in our country as of April 2022 (Source: Statista) with a penetration rate (ratio of premiums underwritten to GDP) of only 1.67 percent. For comparison, worldwide sampling as of 2019 (Source: NationMaster), Taiwan has the highest penetration rate of 20.1 percent, South Korea has 11.84 percent, Japan, 9.4 percent, Singapore, 7.4 percent, China, 4.2 percent, India, 3.3 percent, and Indonesia, 3.2 percent. Clearly, the insurance business in the Philippines still has a long way to grow compared to some Asian neighbors.