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Philippines Insurance Report Q1 2008Published by: Business Monitor International Published: Mar. 11, 2008 - 32 Pages Table of Contents
AbstractThis report differs from its predecessors in that it includes BMI’s Insurance Business Environment Rating(IBER). The rating brings together a number of pieces of relevant quantitative data, together with BMI’sCountry Risk Rating (CRR). It is now much easier to consider the business environment for the insurancesector in any one country relative to the business environment for other industries in that country that aresurveyed by BMI, and the business environment for the insurance sector in other countries.The Philippines IBER is 51.4. Relative to other countries in the Asia Pacific it is a medium-sized market,although much less-developed than it immediate neighbours. Regionally it equates to Indonesia in termsof penetration and density. Its IBER is significantly held back by a heavy bureaucratic and tax burden in agenerally unhelpful regulatory environment. The Philippines stands out for its highly fragmentedinsurance market. Over the forecast period, we anticipate that non-life premiums will grow by 20% annually in localcurrency terms and by 10% in US$ terms. Life premiums are expected to increase by 6% annually in localcurrency terms and by 9% in US$ terms. The key drivers of growth in the non-life segment in 2007-2012are the anticipated rise in nominal GDP from around US$141.4bn to US$196.9bn. Nevertheless in nonlifepenetration from is expected to be sluggish from around 0.65% to 0.75% of GDP. Life penetration islikely to perform even worse rising from 0.85% to 0.94% over the period. However, life density isexpected to be the key driver of growth with the envisaged rise from a miniscule US$14.02 per capita in2007 to US$20 per capita in 2012. The Philippines’ total population is growing slowly. The competitive landscape, in both the non-life and the life segment, is extremely fragmented by anycomparison. Both segments are open to participation by foreign groups and these have been prepared tooverlook the challenges of doing business in the Philippines, possibly because their ability to insureoffshore against risks inn the country give them an advantage over local groups. The Philippines insurance sector has relatively few barriers to entry and has tried and tested strong brandsthat have weathered many adverse conditions in the market over the year. It is, however, extremelyfragmented in both in the life and non-life segments. Perhaps the most significant obstacle the industry faces is the heavy tax burden put on premiums whicherodes corporate profit margins and discourages new customers. Combined with this, the economy isexpected to continue a slowdown and there are ongoing security and stability concerns in the country.Nothwithstanding these negatives, with low penetration rates there is obviously room for growth shouldother issues be successfully dealt with. Get Full Details About This Report >> |
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