Philippines: Insurers feel pinch of high consumer prices
MANILA, Philippines — The insurance industry is expecting a difficult year as consumers feel the pinch of high commodity prices due to global developments, even as the world slowly recovers from the health crisis.
Insurance firm AXA Philippines maintained that predicting the market remains difficult as of now given market volatility and rising costs that impact every consumer’s ability to purchase goods and services.
On the sidelines of AXA’s latest insurance product focused on retirement, AXA MyLifeChoice segment director Lyzen Zapanta admitted that this year is much tougher even as the firm ramps up its efforts in terms of increasing its sales.
“A big factor would be the Russia-Ukraine war, its disruptions and if you look at prices, consumers feel that prices are very high especially fuel,” Zapanta told The STAR.
“It’s much tougher because of all that’s happening globally,” he said.
AXA Investment Tools and GAIN Fund segment director Dex Agcaoili echoed the same sentiment, saying it has been challenging for the industry as global markets are down. Such a scenario has an impact on insurers who also offer global funds.
Agcaoili noted that the threat of global recession is also dampening overall demand.
“The pandemic has impacted our disposable income. So when it comes to prioritizing, we will prioritize the essentials and those who got unemployed will have to make ends meet. That’s one dampener when it comes to the industry,” Agcaoili told The STAR.
Despite the challenging situation, AXA continues to bank on the heightened and improving appreciation for insurance, especially when COVID hit.
Zapanta said Filipinos are now seeing the importance of insurance although the cash flows of people have somewhat been limited.
“That’s probably the reason why there’s been a decline in the purchase of [insurance] policies. But in terms of the appreciation for insurance, it’s there,” Zapanta said.
Agcaoili, for his part, maintained that awareness right now is no longer just about knowing insurance through information, but experiencing the hardship of not having one and appreciating the value of it.
“The pandemic exposed the need to be insured. That growing awareness can effectively translate to the growth of the insurance industry as a whole,” he said.