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October 1, 2014
The ongoing shift in the focus of multi-national corporations towards Asia, the
expected golden age brought about by a demographic sweet spot of the Philippines n
ext year and the financial integration of the Association of the Southeast Asian
Nations (ASEAN) provide challenges and opportunities for the countrys trillion-p
eso insurance industry.
The confluence of these developments points to tremendous opportunities for grow
th for the Philippines, not only in the insurance industry but also in other ind
ustries such as services, manufacturing, banking etc. But the government, the pr
ivate sector and the countrys workforce should play their roles correctly to allo
w the Philippines to take advantage of these opportunities and compete when the
ASEAN economic community starts integrating in 2015.
According to a recent forum on strategic planning in the insurance industry, ind
ustry leaders said that innovation and the ability to evolve with the trends are
the keys to tapping the potential for growth and competing in an increasingly c
ompetitive business environment that is focused on the Asia-Pacific region.
During the forum entitled Insurance 2025: Strategic Planning for the Next Decade,
business futurist David Smith, chief executive of Global Futures and Foresight,
talked about the projections of the global business community about the growth p
rospects in Asia.
Smith said that the dominant driver of insurance growth in the world is the Asia
-Pacific region, where half of the total additional Euro2.2 trillion expected to
be paid by all policyholders by 2020 would come from. By 2030, the emerging eco
nomies will contribute 70 percent of the total economic growth, with 25 percent
of that growth coming from China.
In the ASEAN region alone, the projection is that the economy of the ASEAN will
more than double from $2 trillion in 2012 to $4.7 trillion by 2020.
These projections on the economic growth that is focused on Asia are reflected i
n the decisions of multi-national corporations in basing their businesses in Asi
a. In 2010, 85 out of the global list of Fortune 500 companies are headquartered
in emerging markets, and this is expected to balloon to 230 or 46 percent of th
e Fortune 500 list by 2025.
With the upcoming ASEAN integration, the Philippines and the local insurance ind
ustry need to innovate to be able to take advantage of the opportunities that wi
ll be offered by the increased market brought about by the integration.
According to current statistics, the ten-member ASEAN has the third biggest popu
lation in the world with 600 million people. Its combined gross domestic product
is estimated to be $2.3 trillion, the 7th largest economy in the world.
Insurance Commissioner Emmanuel F. Dooc pointed out that with the huge market th
at will be offered by the ASEAN financial integration, the Philippines stands to
gain more than lose in the ensuing tighter competition.
This is because the Philippines has more players in the insurance industry in a
local market that is smaller compared to the markets of its ASEAN neighbors.
If you compare the number of players in the Philippines with the other ASEAN neig
hbors, you will realize that we have more insurance companies than other other c