Several decades ago a survey was conducted on the general impressions of the public on the insurance industry. The findings were, sad to say, not favorable. At that time, the industry was overcrowded, poorly capitalized and managed by inadequate professional management. These are some of the impressions:

1. Insurance is a racket.

2. Insurance companies are fast in collecting premiums but slow in paying claims.

3. Insurance companies are more concerned with making profit than improving benefits and services to their policyholders.

4. Insurance agents are more interested in increasing their commission than in providing adequate protection for their clients.

5. The insurance industry lacks social consciousness.

We now have a much different and improved environment. The capital requirements of all insurance companies was increased by the new Insurance Code to P900 million as of December 31, 2019 and to be further strengthened to P1.2 billion by December 31, 2022, which will make capital requirements of Philippine insurance companies the highest among Asean countries and further strengthens their financial position. This, however, has resulted in the reduction of players in the market. On the other hand, insurance companies have embarked on a massive training of their staff and agency force. They have also invested significantly in technology to improve the level of service and claims payment. The Insurance Commission has also embarked on the same path by introducing regulations for effective supervision and assistance to the industry as they were also given the authority to supervise the health maintenance organizations, the pre-need industry, and the mutual benefit associations.

The Covid-19 pandemic has been somewhat of a booster for the insurance industry. In a recent survey conducted by the AIA Group, 75 percent of Filipinos agreed that insurance has become more important than ever for protection in case of unexpected incidents such as the Covid-19 pandemic. Initially, the agency force had a difficult time in selling their products, but subsequently with the support of the Insurance Commission of endorsing sales through digital technology, the volume of new business increased. In fact, this was notably proven in the sales of investment-linked products.

Insurance is a rather technical business so it behooves the industry to make itself appear less technical and complicated. The industry has introduced much more sustained customer-focused initiatives to build trust and confidence. It must always consider the interest of its clients and policyholders, which is not at odds with theirs. It is therefore safe to say that the image of the insurance industry has improved as insurance companies have regained the trust of the general public.

The author is a risk management consultant and Editor of Insurance Philippines magazine.

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