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Doubling insurance coverage for residents in six Southeast Asian economies, including the Philippines, could supercharge individual and national economic output, with life insurance alone potentially adding up to 8.8 percent to the economy.
According to Prudential plc’s study, which focused on the social and economic impact of insurance, expanding insurance coverage in six ASEAN countries could add more than four percent to gross domestic product (GDP) in key markets from 2023 to 2050.
A 100-percent increase in life insurance coverage could add 8.8 percent to the country’s GDP and 10.4 percent to GDP per capita. Meanwhile, a 100-percent increase in non-life coverage could add 5.3 percent to GDP and 6.2 percent to GDP per capita.
For a 50-percent increase in life insurance coverage, the boost to GDP and GDP per capita would be 4.4 percent and 5.1 percent, respectively. For non-life insurance, it would be 2.6 percent and 3.1 percent.
“These gains can be attributed to a more robust workforce and greater financial confidence,” the report, published on Tuesday, Sept. 23, stated.
Findings for these scenarios were based on quantitative modeling of annual data from 1999 to 2019 for the six countries—Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.
“Insurance is shown to play a crucial role in fueling long-term economic growth across scenarios between 2023 and 2050 in ASEAN-6,” the report said.
The study noted that life and non-life insurance, including health coverage, play an important role in advancing the Sustainable Development Goals (SDGs) and supporting long-term economic growth through higher labor participation, capital investment, and human capital development.
Neil Moge, group chief investment officer at Prudential plc, said the insurance industry’s “ability to direct long-term capital into critical sectors, such as infrastructure and green energy, fuels economic advancement and social well-being.”
Moge added that the continued expansion of insurance in ASEAN will create more opportunities, support inclusive development, and strengthen the region’s economy.
Steven Chan, group chief government relations and policy officer at Prudential plc, said the study offers significant opportunities for policymakers and industry leaders to maximize the benefits of insurance.
He added that the findings aim to provide insights and initial policy recommendations to support the industry’s sustainable and inclusive growth.
“In the short term, priorities include implementing fiscal incentives such as tax deductions for insurance premiums and establishing supportive regulatory frameworks to capture the benefits of insurance,” Chan said.
“Long-term strategies focus on talent development and public-private partnerships to improve the insurance ecosystem and public awareness,” Chan added.
