The Philippine American Life and General Insurance Company (Philam Life) aims to bridge the so-called protection gap among Filipinos by expanding its services to include microinsurance and tap the lower economic classes.
This was learned from AIA Philam Life CEO Kelvin Ang over the weekend who noted the majority of covered individuals belong to the upper A and B economic classes.
These covered individuals make up less than 10 percent of the total penetration and bring the market penetration of life insurance companies to only two percent, a number that has not improved over the years.
“The growing protection gap in the Philippines is alarming and as one of the market leaders in the local life insurance industry, we have a responsibility to bring back the focus on protection,” Ang said.
“We strongly advocate holistic wellness and as such, give much importance on having basic protection as one aspect of having peace of mind. Living a healthier, longer and better life is not just about being physically healthy, but also making sure that you and your family will be taken care of when illness or an unfortunate event happens,” he added.
Data from the insurer show the protection gap at P1.5 trillion and if not be addressed, could balloon to P2.7 trillion by 2020.
Ang said tapping individuals who live “from check to check” is crucial as they need the most protection and comprise the larger part of the population. The bulk of their number remain tapped.
“We are still working on a platform (and looking to launch it) sometime in 2020,” Ang said, referring to the proposed microinsurance venture that will cater to lower economic classes.
Also, the venture aims to partner with non-traditional insurance channels like pawnshops in marketing and distributing microinsurance products.
Also, Philam plans to boost the low 25 percent financial literacy rate in the country which had also been blamed for the low insurance penetration rate.
According to Ang, they target 100,000 individuals in secondary schools that include, parents and teachers to teach financial literacy.
Philam Life, one of the country’s biggest insurers, has P249.6 billion inf assets as of 31 December 2018 while having a client base of over 700,000 individual policyholders and over three million insured group members.