Photo credit: DOF

In a passionate address to the Philippine Life Insurance Association (PLIA) during its 74th Anniversary celebration on July 30, 2024, Department of Finance (DoF) Secretary Ralph G. Recto urged the life insurance industry to play a crucial role in combating poverty in the Philippines.

"Risk is a significant driver of poverty, and adequate insurance coverage is among the powerful tools for mitigating this challenge. Therefore, all of you [in the life insurance industry] hold key positions in winning our battle against poverty," Recto emphasized.

The Finance Chief outlined the government's ambitious goal of reducing poverty incidence to a single digit, targeting 9% by 2028. Notably, as of 2023, the government has successfully lifted 2.5 million Filipinos out of poverty, lowering the poverty rate to 15.5%. However, to achieve its target, 10 million more Filipinos need to rise above the poverty line in the next four years.

The 2024 World Insurance Report highlighted that life insurance penetration in the Philippines stands at 1.2% of GDP, lagging behind the global average of 2.9% and emerging Asia's 2.2%. Recto sees this as both a challenge and an opportunity for the industry to step up efforts in protecting low-income families from falling below the poverty line.

"This is a call to action for the industry to ensure that every Filipino, especially those in low-income brackets, is protected and shielded from poverty," he said.

Recto encouraged PLIA members to innovate, educate, and advocate for life insurance, emphasizing its indispensable importance. He urged them to redefine how people perceive life insurance—not just as legacy planning, but as a means to protect and empower families for a better future.

"It is not a mere transaction but a selfless act of love for their families. Life insurance should not be seen as just an expense. It's not only for the wealthy, and it's not something that benefits only when a loved one passes away," Recto stressed.

He added that life insurance investments are stepping stones towards higher education, home ownership, or starting a small business, helping more Filipinos live healthier, longer, and better lives.

Recto also called on the industry to take advantage of the Philippines’ vibrant labor market, growing middle class, and its demographic sweet spot. With the country's projected rise to an upper-middle-income status in 2025 and becoming the world’s 13th largest market by 2030, he believes these factors provide greater opportunities for market penetration.

He urged the industry to innovate beyond conventional solutions, making products simpler, more affordable, responsive, customer-centric, and digitally integrated. Additionally, he advocated for promoting micro-insurance to ensure that every household can secure a decent future without needing to spend large sums of money.

Moreover, Recto reminded the industry to continuously earn their clients’ trust by providing the best possible service with passion and compassion. In return, he assured the PLIA of the Department of Finance's strong commitment and support to the insurance industry through the Insurance Commission in closing the protection gap.

In 2023, the life insurance industry covered approximately 84 million lives—a 16% increase from the pre-pandemic figure of 72 million, with 44 million covered by micro-insurance products. The average amount Filipinos invest in life insurance has also risen to PHP 2,745.7 in 2023 from PHP 2,182.8 pre-pandemic.