A group of insurance professionals in the Philippines is pushing for the current administration to cut taxes on life insurance companies and on agents, contending this will make insurance more affordable to more Filipinos.
According to Edwin Gocuan, president of the Life Underwriters Association of the Philippines (LUAP) in Cebu, among the reasons why life insurance premiums in the Philippines are costly is the taxes imposed on both insurers and agents.
Gocuan said if such taxes are lowered, it will trickle down to more Filipinos having access to insurance products.
Right now, insurance penetration in the country stands at less than 3 percent, and the factors contributing to this low rate are low financial literacy and price concerns. Insurance agents in the Philippines are currently taxed 32 percent.
Gocuan, nonetheless, explained that premiums will naturally come more expensive in a developing country like the Philippines because the mortality risk is higher.
Fewer Nonlife Insurers This Year
Meanwhile, the number of nonlife insurance players in the Philippines is expected to decline this year as the regulator imposes higher capital requirements for insurers.
From 63 nonlife companies as of end of 2016, the number may go down to 55, according to Insurance Commissioner Dennis Funa.
At least four insurers will close shop while eight of them will be merging, he added. Of the four companies that will shut down, three are still winding up the process.
Funa said he is sure that Manila Surety and Fidelity Co will close. According to the new regulation, insurers need to have a paid-up capital of P550 million (US$11 million) by end-2016.
Compliance-wise, at least 26 life and 47 nonlife insurance players have already satisfied the new requirement based on latest data from the Insurance Commission.
But such data will still be subject for validation based on the 2016 annual statements of the companies which are due on 30 Apr 2017. – [BusinessTimes.ph]