The Philippines' general insurance industry is set to grow at a compound annual growth rate (CAGR) of 9.5% from PHP145.4bn ($2.6bn) in 2024 to PHP209.0bn ($3.8bn) in 2028, in terms of gross written premiums (GWP), forecasts GlobalData, a leading data and analytics company.
GlobalData’s Insurance Database reveals that the Philippines’ general insurance industry is expected to grow by 14.0% in 2024, supported by a strong economic growth, uptake in the construction sector, and the country’s exposure to natural catastrophic (Nat CAT) events.
Mr Sutirtha Dutta, insurance analyst at GlobalData, said, “The Philippines general insurance industry grew by 33.8% in 2023, the highest growth in the last five years, supported by strong growth in the key economic sectors such as automobiles, construction and financial services. The initiatives by the government to improve financial literacy, through financial inclusion have also supported the general insurance growth. The trend is expected to continue in 2024.”
Property
Property insurance is the leading line of business in the Philippines general insurance industry, which is expected to account for 41.5% share of the general insurance GWP in 2024. Property insurance is estimated to grow by 17.2% in 2024, supported by rising demand for policies covering Nat CAT events.
According to Philippines Statistical Authority, major natural disasters in the country like typhoons, floods and earthquakes affected 12.1m people in 2023 and accounted for losses of PHP23.2bn.
Mr Dutta added, “The initiatives by the government to expand crop insurance and encourage financial inclusion will support the general insurance growth. In the first quarter of 2024, the Department of Budget and Management (DBM) provided PHP900m of crop insurance cover out of a planned PHP4.5bn for subsistence farmers and fishermen through the state-owned Philippine Crop Insurance Corporation (PCIC).”
PCIC has also entered into an agreement with CARD Pioneer Microinsurance Inc (CPMI) to further expand crop insurance. This is the first step towards public-private partnership in agriculture insurance in the country, which will support the growth of property insurance during 2024-28. Property insurance is expected to grow at a CAGR of 12.3% during 2024-2028.
Motor
Motor insurance is the second-largest line that is expected to account for 24.5% share of general insurance GWP in 2024. Motor insurance is expected to grow by 12.4% in 2024, driven by rising vehicle sales.
As per the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) and the Truck Manufacturers Association (TMA), vehicle sales registered a growth of 12.7% in the first quarter of 2024 as compared to the same period in 2023. Motor insurance is expected to grow at a CAGR of 7.5% during 2024-28.
Marine, aviation and transit (MAT) insurance is expected to account for 6.3% share of the general insurance GWP in 2024. MAT insurance is expected to grow by 12.2% in 2024, supported by the growth of foreign trade and the development of the country’s port which will support the increase in trade and cargo volume with Japan, one of the top trading partners with the Philippines. The revival of the Philippines-EU free trade agreement (FTA), which is currently under negotiations, will also expand the country’s export business and support MAT insurance growth.
Liability, financial lines, and miscellaneous insurance are expected to account for the remaining 27.8% share of the general insurance GWP in 2024.
Mr Dutta said, “Growth in the construction and trade sectors and rising vehicle sales are expected to present a positive outlook for the general insurance industry over the next five years. Increasing losses from nat-cat events will prompt insurers to reassess their risk exposure and strengthen their underwriting practices that will lead to higher premium prices.”