Demand for insurance in the country could grow by 9.2 percent by 2035 as its population continues to expand while social protection policies remain inefficient, a study by Allianz revealed.

“This growth is largely fueled by policy inaction: underinvestment in adaptation is leading to increasing climate damage, while delayed pension reforms are requiring higher savings efforts from individuals,” Allianz chief economist Ludovic Subran said.

The Germany-based insurance firm said life insurance will mainly drive local expansion of the overall industry as the sub-sector grows by 9.5 percent by 2035.

Previously, Allianz said life insurance improved by 6.5 percent from 2014 to 2024.

“Asia and China remain the growth engines, driven by the need for private provision in the face of accelerating demographic change,” Allianz said.

The Insurance Commission (IC) reported that the country’s overall insurance penetration rate increased to 1.89 percent in the first quarter of this year, up from 1.78 percent in the same period in 2024.

The IC stated that the penetration rate indicates the growth of insurance premiums paid by clients in relation to the country’s gross domestic product (GDP). Thus, a higher penetration rate means more people are insured.

“The increase in insurance penetration is due to the faster growth in premiums than the GDP expansion of 7.8 percent at current prices during this review period,” IC Commissioner Reynaldo Regalado.

The government agency reported life insurers grew their total premium income by nearly 14 percent to P99.9 billion in the first quarter this year from P87.7 billion in the same period in 2024.

Meanwhile, Regalado said non-life insurers increased their total premiums by 19 percent to P20.27 billion during this period.

Allianz said the non-life insurance sector could grow slower by 8.3 percent in the next 10 years.

In the past decade, this sector had expanded by 7.2 percent.

Thus, Allianz said life insurance is expected to continue attracting a higher total premium worth 15.1 billion euros in the next decade.

Meanwhile, Allianz said non-life insurance will likely register a lower total premium amounting to 5.2 billion euros.

Price increases loom

However, Allianz said global economic risks might temper growth as insurers raise their prices to account for possible bigger damage on life and non-life assets.

“Geopolitical uncertainties and trade tensions may weigh on insurance volumes through weaker economic growth, trade slowing down and higher credit and market risks,” the company said.