(from left) Insurance Institute of Asia and the Pacific (IIAP) President Raul Tan, IIAP Chairman of the Board of Trustees Herminia S. Jacinto, Insurance Commission Deputy Commissioner Atty. Martin Yasay and IIAP Treasurer Esther Tan lead the ribbon-cutting ceremony celebrating the IIAP’S 50th Anniversary.
The insurance industry will sustain income growth with the increase in the minimum capital requirement for local companies, according to an industry leader.
Insurance Institute for Asia and the Pacific (IIAP) Chairman of the Board of Trustees Herminia S. Jacinto told the BusinessMirror on Friday that she is optimistic about the growth prospects for life and non-life insurance sectors.
“With an increase in their net worth, confidence among the public to purchase insurance products would also increase,” Jacinto said.
A high net worth would ensure the stability of local insurance companies and help them maintain their good financial position. This, in turn, would give assurance to insureds that the companies have the capacity to settle claims.
Under Republic Act 10607 or the Amended Insurance Code, existing insurance companies are required to have a net worth of at least P550 million by December 2016, P900 million by December 2019 and at least P1.3 billion by December 2022.
Data from the Insurance Commission (IC) showed that the net income of the insurance industry grew 44.98 percent to P14.287 billion in the first quarter from last year’s P9.855 billion.
Insurance density, or the amount of premium or average spending of an individual on insurance, rose by 10.66 percent to P965.56 as of end-March from P872.56 in the same period a year ago.
Despite this, insurance penetration, or the share of the sector to the country’s gross domestic product (GDP), remained low at 1.78 percent in the first quarter.
Jacinto attributes the low insurance penetration to the affordability of the insurance products.
“Ideally, we should insure all properties, but being able to afford it is still an issue,” she added.
IIAP, the center of learning for executives and employees of life and non-life insurance industries, aims to fill in the gap by reaching out and equipping potential buyers of insurance.
Jacinto said apart from training insurers to effectively and genuinely sell insurance products, the IIAP also makes the public understand the importance of taking out insurance policies.
“We’re trying to teach other people, especially the younger ones, to appreciate insurance and help us propagate,” Jacinto added.
Data from the IC showed total lives insured reached 83.678 million in 2023, higher by 9.50 percent than the 76.419 million lives insured in 2022.
Source: businessmirror.com.ph
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