Vulnerability to natural disasters and public infrastructure spending will see the general insurance market in the Philippines grow by more than 25% by 2022, new forecasts suggest.
After assessing the value of gross written premiums in the Philippines, GlobalData found a compound annual growth rate of 10.7% between 2013 and 2017.
The researchers expect the value to rise from PHP 89.22bn ($1.74bn) in 2019 to PHP 112.1bn in 2022, reflecting the government's growing appetite to safeguard assets.
"Government spending has a key role to play in the expansion of the general insurance business, both in expanding the aggregate demand, and procuring insurance coverage against natural calamities," commented Pratyusha Mekala, GlobalData senior insurance analyst.
The Philippines is among the world's most vulnerable countries to natural disasters, and faces average annual asset losses of PHP 184.7bn due to typhoons and earthquakes.
At the same time, general insurance penetration - as a percentage of GDP - was just 0.48% in 2017, compared to the 3.28% average for developed markets, according to GlobalData.
The government renewed its parametric insurance policy for coverage of PHP 20.5bn in 2018, which was double the previous year's coverage.
How the value of general insurance gross written premiums in the Philippines has changed since 2013, and is forecast to change by 2022, is shown below (PHP bn):
GlobalData said that there is now also a growing micro-insurance market in the Philippines that is helping expand coverage to lover-income households.
For instance, InsurTech firm Saphron is deploying technologies such as artificial intelligence and real-time data analytics for insurance underwriting and customer services.
The findings show that gross written premiums based on micro-insurance in the Philippines registered a compound annual growth rate of 33.2% between 2013 and 2017.
"One of the key trends to be observed is the gradual adoption of technology across the value chain, which is playing a vital role in expanding the insurance reach," Mekala said.
"Product innovations in technology, rising micro-insurance market as well as the enhanced investment expenditure through government spending are expected to enable an expansion in the Philippines general insurance business."