The Philippine non-life insurance
segment grew in written premium value at a compound annual growth rate (CAGR)
of 8.9% during the review period (2007–2011). This was supported by the
country’s economic growth, expanding automobile industry, improving awareness
of the benefits of insurance and demographic changes such as its growing
middle-class population. Over the forecast period (2012–2016), the non-life
insurance segment’s growth will be driven by the development of the automobile
industry and the rising construction activity in the country. Property
insurance is the largest category in the non-life segment, which accounted for
45.2% of the category’s written premium in 2011, followed by motor insurance
with 37.0%. The marine, aviation and transit, and general liability insurance
categories accounted for 13.1% and 4.7% shares respectively.
Property and motor
insurance categories will drive the non-life segment
Property insurance accounted for
the largest share of the Philippine non-life insurance segment during the
review period, with 45.2% of the total non-life insurance written premiums in
2011. Despite the global economic crisis, property insurance grew at a CAGR of
8.1% during the review period. This category is expected to grow at a CAGR of
5.5% over the forecast period. Furthermore, the country’s rising consumer
disposable income levels and expanding middle-class population are encouraging
the growth of the Philippine automobile industry. Consequently, new vehicle
sales in the Philippines increased significantly in 2011, and are expected to
continue increasing over the forecast period. As the automobile industry
expands, the customer base and demand for motor insurance also increases. As a
result, the motor insurance category registered a CAGR of 9.6% during the
review period.
Opportunity from an
underdeveloped customer base
The Philippine non-life segment
grew in value at a CAGR of 8.9% during the review period. The non-life segment
also recorded an annual growth rate of 10.8% during 2011. Non-life insurance
penetration as a percentage of GDP was 0.34% in 2011, which is considerably
lower than that of other Asian countries such as Malaysia, China and India with
penetration levels of 1.49%, 0.99% and 0.41% respectively. This low penetration
rate reflects the large underdeveloped customer base in the Philippines, and
with less than 13% of the population having any kind of insurance, there is a
huge potential for non-life insurance, particularly in the property and motor
insurance categories.
Expanding
middle-class population and rising per capita annual disposable income
The Philippines recorded sustained economic growth during
the review period, with an expanding middle-class population and rising
disposable income levels. The country’s per capita annual disposable income
(PCADI) increased at a CAGR of 6.7% during the review period. This growth in
PCADI, rising consumer awareness and the frequent occurrence of natural
disasters is expected to drive the growth of the non-life segment over the
forecast period.
