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Philippine-American Life and General Insurance Co. (Philam Life) is planning to venture into microinsurance to help narrow the country’s massive insurance gap.
“The Philippines has a protection gap of PHP1.5 trillion (US$27.7 billion) and if not addressed, it could grow to PHP2.7 trillion (US$50 billion) by 2020,” Leonardo Tan Jr, Philam Life’s chief marketing officer, said in a report by BusinessWorld.
However, for Philam Life to successfully launch a microinsurance operation, it will have to borrow expertise from other firms, Tan said.
“But microinsurance might entail a different distribution platform,” he told BusinessWorld. “That’s where probably [there is a] need to partner with certain institutions who have a captive markets when it comes to that segment.”
Philam Life is part of the AIA Group and currently has 8,000 agents, as well as a bancassurance agreement with Bank of the Philippine Islands (BPI), the third-largest bank in the market. It has 600,000 individual policyholders and over 2.2 million insured group members.
According to Tan, the insurer is focusing more on refining the customer experience over growing its already expansive distribution network.
“What we want to do is improve that entire journey from learning, buying, after-sales, claiming and hopefully referring us to our customers’ friends and family,” he said, adding that it is investing in digital platforms to enhance its customers’ experience.
But Tan said that it will not abandon face-to-face distribution methods.
“In Asia, face-to-face transaction is still important since insurance is highly emotional,” he said. “Digital will form a part, but customers will still opt to sit down with advisers and have that honest conversation.”
