MANILA, Philippines – The insurance industry is expected by a group of life insurances in the Philippines to maintain a double-digit growth this year on the back of the country’s stable macroeconomic fundamentals and the newly enacted tax reform law.
The newly appointed president of the Philippine Life Insurance Association Inc., Olaf Kliesow, said in an interview followed by the induction ceremony for the 2018 PLIA officers, “in the Philippines, the macro (economic) fundamentals are very sound so I would expect double-digit growth.” As a result of the Tax Reform for Acceleration and Inclusion (TRAIN) Act., he visions 2018 as a good year for the insurance industry expects to robust economic growth. Kliesow is also the president and Chief Executive Officer of Allianz PNB Life Insurance Inc.
He also noted that the positive growth projections are mostly above the seven percent level as studied by analysts on the country’s gross domestic product this year. Despite the price effect by the TRAIN law, he also stated that inflation would remain manageable.
“I look at the tax reform more from a positive point of view. If you look at it from an insurance angle, you might say that there are some aspects that are more on the difficult side, like the state tax, the DST (documentary stamp tax). But overall, the additional income by lowering the income tax should lead to more money in the pocket and more available assets. That means also lower income classes can start accumulating wealth and protecting themselves,” Kliesow stated that the insurance industry counteracting its disadvantageous effects would be a positive impact of the TRAIN.
He said PLIA will continue to focus on public’s awareness about insurance since this is a big opportunity for growth considering that a large number of the population still has no knowledge about insurance products.
The insurance industry achieved a total premium income of P259.65 billion, based on unaudited statistics gathered from the Insurance Commission. Compared to the 2016 result of P231.88 billion, it is 11.97 percent higher.
From the P1.31 trillion assets recorded in the previous year, the total asset grew 17.89 percent resulting in P1.55 trillion. The insurance industry’s total net worth also expanded to 16.32 percent resulting in P315.44 billion.
Likewise, from the insurance industry’s paid-up capital of P45.94 billion in 2017, it also increased by 10.47 percent resulting in P50.75 billion.