By Aubrey Rose A. Inosante, Reporter
INSURANCE PENETRATION in the Philippines will continue to increase amid strong economic prospects and a growing middle class, said Benedicto C. Sison, chief executive officer and country head of Sun Life of Canada (Philippines), Inc. (Sun Life Philippines).
“We anticipate a gradual increase in insurance penetration rate,” Mr. Sison told BusinessWorld in an interview. “What will drive this are three factors. First is economic growth, second is evolving consumer needs, and third is industry innovation.”
Insurance penetration, or premium volume as a share of gross domestic product or the contribution of the insurance sector to the economy, stood at 1.74% as of September 2024, higher than the 1.68% ratio a year prior.
Mr. Sison said a penetration rate close to 2% would be “a major achievement,” although this would still be behind those of neighboring Association of Southeast Asian Nations countries — which he sees as a growth opportunity for the Philippine insurance industry.
Sun Life Philippines is seeing “encouraging trends, particularly in urban areas and among the rising middle class,” he said.
“Economic growth definitely creates a more conducive environment for insurance adoption, with the expanding middle class and increasing disposable income,” Mr. Sison said.
He added that as the country’s overall economic condition improves, Filipinos will have more means to allocate resources towards insurance products.
More Filipinos are now considering insurance as a vital part of their financial planning amid growing financial literacy and awareness about health risks and the rising cost of healthcare, Mr. Sison said, although income disparity and limited access to and understanding of financial products are key challenges.
To help address these, Sun Life Philippines is reimagining its distribution channels, leveraging digital transformation, and making continuous investments in financial literacy programs, he said.
“As we progress towards upper middle-income status, increasing insurance penetration will require concerted effort, not only from the industry but also from the government and educational institutions.”
The life insurer is also developing products with lower entry points to make insurance more accessible to a wider range of Filipinos, he said.
Mr. Sison said he expects Sun Life Philippines to remain as the leading insurance provider in the country this year as it continues to grow its market share.
“While we anticipate headwinds, including potential market volatility, regulatory changes like sustainability regulations, stricter compliance with data privacy and cybersecurity, continued pursuit of IFRS (International Financial Reporting Standards) 17, expansion of financial inclusion,” he said.
US President Donald J. Trump’s second term could “certainly influence our local insurance landscape” but the impact will likely be “nuanced,” Mr. Sison said.
“For instance, while a stronger dollar might benefit our overseas Filipino workers clients, it could pose challenges for importers and local financial markets,” he said, but noted that the insurer remains optimistic about the country’s resilience.
He added that he expects growing focus on health and wellness-oriented policies among insurers this year.
“This trend is driven by the integration of wearable devices and health apps, allowing for more personalized premiums and incentives based on individual health behaviors.”
Sun Life Philippines was the top life insurer in the country in terms of premium income, net income, and assets in 2023, based on latest available data from the Insurance Commission (IC) based on companies’ submitted annual statements.
The company’s premium income stood at P55.78 billion in 2023, with its net profit at P8.8 billion. It also had assets worth P306.21 billion at end-2023. Its new business annual premium equivalent stood at P10.07 billion that year.
Meanwhile, the Philippine life insurance industry booked a combined premium income of P263.206 billion as of September 2024, up from P229.895 billion a year prior, latest IC data showed. The sector’s net profit inched down to P28.75 billion from P28.79 billion in the same period.
WORKING WITH SUN LIFEBefore assuming his role as Sun Life Philippines country head in 2018, Mr. Sison previously worked at a fast-moving consumer goods company, where he took on various leadership roles across the United States, India, Canada and China.
In 2010, amid the backdrop of a booming Asian market, he found himself at a crossroads, he said. A chance encounter with a Singapore-based headhunter presented him with an unexpected opportunity: the position of chief financial officer (CFO) at Sun Life Philippines.
“I was initially hesitant due to my lack of experience in financial services,” Mr. Sison recalled. “I decided to pursue the opportunity, intrigued by the prospect of a new challenge.”
He said Sun Life appealed to him “as a stable international organization with ambitious growth plans for Asia.”
Since his first stint with Sun Life Philippines that began in 2010, Mr. Sison took on various roles within the Sun Life group of companies, including leadership roles in its various Asia units, including being CFO of Sun Life Financial Asia.
Prior to becoming Sun Life Philippines country head in 2018, he served as the chief strategy and financial management officer of the life insurer for three years.
“These roles not only challenged my leadership, mental, and interpersonal skills but also allowed me to leverage my background in finance and strategy to navigate unpredictable environments and respond to rapid market shifts,” Mr. Sison said.