Create more products, insurance firms told
FINANCE Secretary Carlos Dominguez 3rd urged the Philippine insurance sector to come up with new products to encourage more Filipinos to avail themselves of insurance packages.
During the Philippine Life Insurance Association Inc.’s (PLIA) 68th anniversary celebration in Makati City recently, Dominguez said “there should be a way for the insurance industry to design products that would broaden the base of life insurance coverage.”
According to him, the sector should take advantage of the increased disposable income workers now enjoy because of the implementation of Republic Act (RA)10963, or the Tax Reform for Acceleration and Inclusion (Train) Act.
Signed by President Rodrigo Duterte on December 19, 2017 and implemented on January 1, Train is the first package of the government’s Comprehensive Tax Reform Program (CTRP) that reduced personal income taxes and slapped excise taxes on fuel, coal, automobiles, and sugar-sweetened beverages.
The law, which added a combined P12 billion to taxpayers’ wallets, gives the industry “an opportunity to tap more life insurance investments from people,” Dominguez said.
“I hope that your salespeople are visiting all offices and offering insurance products. Otherwise, they will just spend it on Jollibee, whose profits have gone up 20 percent [in]the first quarter of this year, along with McDonald’s and 7-Eleven,” he added.
The Finance chief also said Insurance Commission (IC) chief Dennis Funa had assured him that the industry would continue to grow, noting that it would likely “surpass its 2017 feat.”
The IC reported in January that the sector’s premium income hit P259.64 billion last year, up 11.9 percent from P231.88 billion in 2016. The life sector grew by 10.6 percent to P202.34 billion, while non-life premiums increased by 16.7 percent to P48.56 billion.
That feat, Dominguez said, “suggests that there is too much headroom for expansion in the non-life sector, where insurance coverage will help our enterprises better manage risks.”
He also reiterated his call for insurance firms to join in the government’s “Build Build Build” infrastructure program.
The IC “is now working on the circular setting the framework for these investments in infrastructure, which, from a risk-management standpoint, diversifies the insurance industry’s profit-making ventures that are mainly concentrated in accumulating real estate assets,” Dominguez explained.
“I urge you to more closely review the investment opportunities opened by the infrastructure program and making a conscious effort to participate. It not only makes sound business sense to do so, [but]it is also a patriotic thing to do,” he said.
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