Finance Secretary Ralph G. Recto has challenged the life insurance industry to become a key poverty-fighting force by increasing its market penetration and turning life insurance into a mainstream consideration and a basic necessity for Filipinos.
“Risk is a significant driver of poverty, and adequate insurance coverage is among the powerful tools for mitigating this challenge. Therefore, all of you [in life insurance industry] hold key positions in winning our battle against poverty,” he told the Philippine Life Insurance Association (PLIA) during its 74th Anniversary celebration on July 30, 2024.
The Finance Chief stressed that the government’s ultimate goal is to reduce poverty incidence to a single digit or 9% by 2028.
As of 2023, the government has successfully lifted 2.5 million Filipinos out of poverty, lowering the poverty rate to 15.5%.
To meet its target, it must elevate 10 million more Filipinos above the poverty line in the next four years.
According to the 2024 World Insurance Report, life insurance penetration (premiums as percentage of GDP) in the Philippines remains relatively low at 1.2% in 2023, compared to the global average of 2.9% and 2.2% in emerging Asia.
“This is both a challenge and an opportunity—a call to action for the industry to step up efforts in ensuring that every Filipino, especially those in low-income brackets, is protected and shielded from falling below the poverty line,” Secretary Recto said.
He strongly encouraged the members of the PLIA to aggressively innovate, educate, and advocate life insurance in a manner that every Filipino recognizes its indispensable importance.
The Finance Chief urged the PLIA to redefine the way people perceive life insurance, which is about legacy planning as well as protecting and empowering families to build a better future.
“It is not a mere transaction but a selfless act of love that they can bestow upon their families. Hindi lang ito dapat tingnan na isang gastos. Hindi lang ito para sa may-kaya. At hindi lang ito napapakinabangan kapag pumanaw na ang isang mahal sa buhay,” Secretary Recto said.
“These investments are stepping stones towards getting higher education, owning a home, or starting a small business—all meant to help more Filipinos live healthier, longer, and better lives,” he added.
Secretary Recto called on the life insurance industry to take advantage of the Philippines’ vibrant labor market, growing middle class, its demographic sweet spot, and its projected ascent to becoming an upper-middle-income country in 2025 as well as the world’s 13th largest market in 2030.
“Favorable factors are in place to provide greater headroom for the industry to increase its market penetration,” he stressed.
Secretary Recto urged industry to break free from conventional solutions and innovate beyond boundaries to make products simpler and more affordable, responsive, customer-centric, and digitally integrated.
He also encouraged companies to package life insurance as a holistic solution that includes protection, savings, and investments tailored to Filipinos’ evolving life stages.
Secretary Recto likewise advocated for the promotion of micro-insurance to ensure that every household is capable of securing a decent future without the need to shell out huge sums of money.
Moreover, the Finance Chief reminded the industry to constantly prove itself worthy of its clients’ trust and expectations by continuing to provide them with the best service possible, delivered with both passion and compassion.
In return, he assured PLIA of the Department of Finance (DOF)’s strong commitment and support to the insurance industry, through the Insurance Commission (IC), in closing the protection gap.
In 2023, the life insurance industry provided coverage equivalent to about 84 million lives––a 16% increase from the pre-pandemic figure of 72 million.
Of this number, 44 million lives were covered by micro-insurance products.
Meanwhile, the average amount Filipinos invest in life insurance has risen to PHP 2,745.7 in 2023 from PHP 2,182.8 pre-pandemic.
