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 driven by a lack of policy action,” said Allianz chief economist Ludovic Subran. “Governments are underinvesting in climate adaptation, which is leading to rising climate-related damages. At the same time, delays in pension reforms are forcing individuals to save more on their own.”

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 said the country's overall insurance penetration rate improved to 1.89 percent in the first quarter this year from 1.78 percent in the same period in 2024.

The IC said the penetration rate indicates the growth of insurance premiums paid by clients compared to the country's gross domestic product. 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," said 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

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.

"In the longer term, financial fragmentation and weakening international cooperation including on climate, cyber or pandemic preparedness could increase the cost of insuring these risks," Allianz added.