By Herminia S. Jacinto
IN the last few days, we have had a series of good news. The new cases of Covid-19 being reported have gone down to below the 5,000 level. The Department of Health reports that hospital beds, especially the ICUs (intensive care units), are not in full capacity. Face-to-face classes are being resumed in selected areas to the delight of our students. Travelers are allowed to enter the country without requiring quarantine in hotels and other facilities. This is really good news for our OFWs (overseas Filipino workers). They will not lose five days (used to be eight days) of their vacation and will not incur extra cost for the hotel quarantine stay.
Restaurants, tourist places and shopping malls are now experiencing increased patronage as people adjust to the safety protocols. Business is expected to perk up some more in the coming months as the alert levels are relaxed.
The insurance industry, both life and property and casualty, will be directly benefited by this improvement. There will be jobs again; thus, increasing the funds available to purchase insurance protection.
The Insurance Commission reports that premium income from the life sector increased by 64 percent to P278.7 billion in the third quarter of 2021. In the same period, insurance penetration grew by a high 2.09 percent as compared to the average of 1.5 percent from year 2017. Insurance penetration is considered as the indicator of insurance development in a country and is calculated as the ratio of insurance premiums to the gross domestic product of a country. The industry players anticipate a more enhanced growth in business as people become more aware of insurance protection and the availability of products that cover losses on Covid-19. The companies are more than ready for the anticipated growth with an inspired sales force and efficient administration structure.
The property and casualty sector, or the non-life sector as it is more popularly known locally, experienced growth also but not as much as the life business. Non-life insurance is very sensitive to the movement of the economy and the business sector. While coverages for fire and allied perils were maintained, there was a big reduction in inventories, imports and exports. Business activity was virtually paralyzed at some point during the last two years and this has resulted in less demand for insurance. Travel and tourism — which require a lot of insurance covers — were at their lowest levels, resulting in very low premium income from this source. The non-life sector is quite excited with the positive developments in the health condition of the country so business can resume and get back with vengeance, as they say. The borders have been opened and business activity is expected to peak again. The companies are more than ready to meet the demand for insurance. Their financial condition has been beefed up with an increase in the net worth in 2020 and the good results in operations in both 2020 and 2021.
Growth will be slow approximating the movement of business so this is a good time for the insurance companies to help their clients how to secure the best protection for their properties with the minimum cost.
During the pandemic, we saw more small and medium enterprises which did business from home. We saw the proliferation of delivery couriers which moved the products, mostly food, from the producer to the consumer! Maybe insurance can create a cover for this new way of doing business.
There is no limit to the creativity that can be done by the insurance providers, both life and non-life, to respond to the current needs of their clients, especially now that buying power has increased. There continues to be a need for good insurance education and awareness, which should be provided by the insurance provider, the insurance company. In addition to their sales force, the companies should train additional personnel to respond to the needs of their prospective clients.
The events that passed should challenge our industry to grow better and faster as we provide our people the best service and products ever. A strong insurance industry provides not only protection but resources for the country's development in the form of investments.