Leading global insurance brand Allianz has recently released its Allianz Global Wealth Report 2022, which compounds facts and figures based on the asset and debt situation of households in almost 60 countries, including the Philippines.
According to the report, 2019 to 2021 saw an exponential boom in the growth of global financial assets, with bullish stock markets powered by monetary policy and an increase in private wealth among households. Asia (excluding Japan), Eastern Europe and North America stood out as major contributors to asset growth, and savings were powered primarily by bank deposits, insurance and pensions.
However, the inflation crisis due to escalating situations in Europe seems to have stifled the global economic recovery from the effects of the COVID-19 pandemic. Based on current estimations, global financial assets are set to decline by more than 2% this year, making it the first significant decrease since the 2008-2009 Global Financial Crisis (GFC). The projected increase in the next three years stands at only 4.6%, less than half the growth experienced in 2019 to 2021.
Fortunately, the Philippines remains one of the stronger players in Asia Pacific when it comes to financial asset growth. According to Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla, the Philippine economy is much stronger now in comparison to during the GFC. In fact, the country’s gross domestic product (GDP) grew by 7.8% in the first half of 2022.
Even amid rate hikes imposed by the US Federal Reserve System (US Fed) to combat inflation, Medalla stated the Philippine economy could remain stable, as long as appropriate policies are implemented.
Meanwhile, Department of Finance (DOF) Secretary Benjamin Diokno agreed with the ASEAN+3 Macroeconomic Research Office (AMRO) projection that the Philippines is expected to post the highest economic growth rate in the region, due in part to the reopening of the economy, domestic consumption, and infrastructure investment.
In terms of gross financial assets, the Philippines has seen a 10.4% increase, primarily driven by the development of life insurance and pension assets. Insurance growth, in particular, rose by 13.0%. However, insurance penetration in the Philippines is still among the lowest in Asia.
“There is a massive need for financial protection and literacy in the Philippines, considering an insurance penetration rate of just around 2%. This translates to millions of Filipinos exposed to financial losses, and a protection gap that amounts to trillions of pesos,” said Allianz PNB Life’s Chief Financial Officer, Fang Siong Chong. “But as observed, Filipinos are gradually investing in insurance protection products. In 2021, the Insurance Commission reported the annual growth rate in premiums earned was at its highest since 2016 at 25.03%. Whether it’s through the realizations made during the pandemic, or because a new generation of Filipinos are thinking more about securing their future, we are confident that the insurance gap will continue to diminish.”
As one of the leading insurance companies in the Philippines, Allianz PNB Life plays a major role in closing the insurance gap. It ranked Top 4 in terms of Gross Written Premium (GWP) and New Business Annualized Premium Equivalent (NBAPE) in 2021, and in the latest ranking by the Insurance Commission for the first quarter of 2022, the company rose to occupy the Top 3 spot for GWP and NBAPE.
Allianz PNB Life is also strong in its efforts to further improve financial literacy and access to financial services in the Philippines. Through Allianz Kaagapay, the company’s financial literacy education program, it is able to encourage financial wellness and inclusion among underserved Filipino communities. Participants receive free life insurance for one year to give them an appreciation for the importance of being covered. The organization is also well known for its Ride Safe programs promoting sustainable mobility in partnership with local government units and cycling advocacy groups.
“The Asia Pacific region is a substantial value contributor to the Allianz Group. We at Allianz PNB Life proudly play a more significant role in the region given our success in realizing the immense potential of the Philippine insurance market” said Allianz PNB Life President and CEO, Alexander Grenz.
With regard to the economic stability of the Philippines in the next few years, Allianz PNB Life echoes the optimism of the Allianz Global Wealth Report. “The Philippines is an emerging market with double-digit financial asset growth. Alongside the outlook provided by AMRO, as well as the commitment of the government to implementing measures and policies that will ensure that the Philippines will be able to carry itself through the current economic weather, I am positive that we will see a continued trend of growth financially within the country.”
Since 2019, Allianz has been recognized as the number one insurance brand in the world. As a leading insurance provider, Allianz PNB Life’s products and services are designed to meet the lifetime financial planning, wealth accumulation, and well-being aspirations of Filipinos. To learn more about the Allianz Global Wealth Report 2022, view the video here. For more information on Allianz PNB Life’s products and services, please visit www.allianzpnblife.ph.
