By Herminia S. Jacinto
THIS is the time of the year, albeit quite late already, for companies to prepare their budgets and plans for the coming year/years. Shall we just skip 2021 and plan for 2022? How do we plan for a year that seems to be full of uncertainties? Coming from a negative GDP growth ranging from minus 6 percent to -9 percent, how do we look at 2021? Dr. Cielito Habito, the well-known economist, wrote in his column in the Philippine Daily Inquirer that the reason for the shrinking economy is that those who are supposed to spend money are not doing that.
Government should have been the biggest spender as it implements its various projects under the Build, Build, Build program. Funds could have been spent on preventing the spread of the much-feared Covid-19 virus! Instead of spending on preventive measures like testing and contact tracing, they resorted to strict lockdowns.
The forced lockdowns caused a lot of disruption in the business sector. For some time, factories and business establishments had to stop operating to counter the spread of the virus. Tourism, which is a major source of revenues, came to a halt due to travel restrictions. Can you imagine how much was lost on plane fares, hotel bookings, dining in restaurants, etc? Our dear OFWs, on whom many families depend for livelihood and other benefits, were also grounded and sent home by the countries where they had been working. To top it all, we had to deal with the increasing number of people affected or even dying from the virus. It looked so dismal at one point that there was a general feeling of hopelessness.
Is there some good news at all now that we are almost ending the year? Will there be Christmas? Government is slowly lifting some restrictions to allow people to go back to work and other commitments. Transportation is almost back to normal — traffic too!
Vaccines have been developed by various medical experts overseas, and we are in line to get a supply from some vaccine makers. I just hope that they choose the right provider and assure the population of availability for all. We need this confidence to be able to look forward to 2021 with a degree of optimism.
How does the insurance industry see 2021? Are they seeing economic growth and recovery?
Will insurance companies stay and be strong enough to service the needs of the insuring public? Will there be buyers of insurance? Will it be considered an “essential” like food and medicine?
The good news is that your insurance industry is as strong as ever. The minimum net worth requirement was required to be increased to P900 million which made them even stronger and financially viable. The insurance companies are looking at 2021 with a positive outlook and are definitely firm in their commitment to serve the insuring public.
Our inherent attitude toward protecting our families, especially our children, became even stronger in the light of the adverse effects of the pandemic. I sincerely think that the insured will keep their policies in force and put their insurance premiums in their “must pay” list as they prepare their budgets for the next year. Insurance companies are coming up with easier payment terms and sometimes provide loan facilities to assist their insured’s financial condition in the near term. The last two strong typhoons resulted in a substantial destruction to lives, property and crops. Those who have insurance can recover with their coverages, and have funds to rebuild or start over their business operations.
Planes are flying again. They can’t fly without insurance. Vehicles are back on our roads, and they need insurance to protect them just in case accidents occur. Factories are running again, maybe on a limited capacity. Malls and other shopping centers have reopened with the necessary protocols, but to insurers this simply means more inventory to protect with marine and property insurance.
Insurance is a necessary partner of our economic recovery. It would double the confidence that we are hoping to get with the coming of the vaccine and the efforts to fight the virus!
Trust your favorite insurer, broker or insurance agent (they also go by the title financial advisers). We are with you in your journey to recovery and success!
Merry Christmas and a toast to the New 2021!