#FinancePh - Allianz Global Wealth Report 2022 sees positive outcomes in financial asset growth and insurance coverage for PH

The top-tier insurance company Allianz recently unveiled its Allianz Global Wealth Report 2022, which compiles statistics based on household asset and debt situations in nearly 60 nations, including the Philippines.

The paper claims that from 2019 to 2021, the rise of global financial assets grew exponentially, with positive stock markets driven by monetary policy and an increase in household wealth. Savings were generally driven by bank deposits, insurance, and pensions, with the exception of Japan, Asia (excluding), Eastern Europe, and North America standing out as significant contributors to asset growth.

The global economic recovery from the COVID-19 pandemic's consequences appears to have been slowed down by the inflation issue brought on by the deteriorating conditions in Europe. The first big downturn since the 2008–2009 Global Financial Crisis is predicted to occur this year, with global financial assets expected to fall by more than 2%. (GFC). Only 4.6% growth is anticipated during the next three years, which is less than half of the growth from 2019 to 2021.

Fortunately, the Philippines is still one of Asia Pacific's top performers in terms of the increase of financial assets. Governor of the Bangko Sentral ng Pilipinas (BSP), Felipe Medalla, claims that the Philippine economy is far better today than it was during the Global Financial Crisis (GFC). In fact, the country's gross domestic product (GDP) grew by 7.8% in the first half of 2022. 

Medalla claimed that the Philippine economy may remain stable even in the face of rate increases imposed by the US Federal Reserve System (US Fed) to combat inflation, provided that the right policies are put in place.

Benjamin Diokno, secretary of the Department of Finance (DOF), concurred with the ASEAN+3 Macroeconomic Research Office's (AMRO) forecast that the Philippines will have the highest economic growth rate in the region, in part because of the country's economy's reopening, domestic consumption, and infrastructure investment.

In terms of gross financial assets, the Philippines has seen a 10.4% increase, primarily driven by the development of life insurance and pension assets. Insurance growth, in particular, rose by 13.0%. However, insurance penetration in the Philippines is still among the lowest in Asia.

“There is a massive need for financial protection and literacy in the Philippines, considering an insurance penetration rate of just around 2%. This translates to millions of Filipinos exposed to financial losses, and a protection gap that amounts to trillions of pesos,” said Allianz PNB Life’s Chief Financial Officer, Fang Siong Chong. “But as observed, Filipinos are gradually investing in insurance protection products. In 2021, the Insurance Commission reported the annual growth rate in premiums earned was at its highest since 2016 at 25.03%.  Whether it’s through the realizations made during the pandemic, or because a new generation of Filipinos are thinking more about securing their future, we are confident that the insurance gap will continue to diminish.”

As one of the leading insurance companies in the Philippines, Allianz PNB Life plays a major role in closing the insurance gap. It ranked Top 4 in terms of Gross Written Premium (GWP) and New Business Annualized Premium Equivalent (NBAPE) in 2021, and in the latest ranking by the Insurance Commission for the first quarter of 2022, the company rose to occupy the Top 3 spot for GWP and NBAPE.

Allianz PNB Life is also strong in its efforts to further improve financial literacy and access to financial services in the Philippines. Through Allianz Kaagapay, the company’s financial literacy education program, it is able to encourage financial wellness and inclusion among underserved Filipino communities. Participants receive free life insurance for one year to give them an appreciation for the importance of being covered. The organization is also well known for its Ride Safe programs promoting sustainable mobility in partnership with local government units and cycling advocacy groups. 

“The Asia Pacific region is a substantial value contributor to the Allianz Group. We at Allianz PNB Life proudly play a more significant role in the region given our success in realizing the immense potential of the Philippine insurance market” said Allianz PNB Life President and CEO, Alexander Grenz. 

With regard to the economic stability of the Philippines in the next few years, Allianz PNB Life echoes the optimism of the Allianz Global Wealth Report. “The Philippines is an emerging market with double-digit financial asset growth. Alongside the outlook provided by AMRO, as well as the commitment of the government to implementing measures and policies that will ensure that the Philippines will be able to carry itself through the current economic weather, I am positive that we will see a continued trend of growth financially within the country.”

Since 2019, Allianz has been recognized as the number one insurance brand in the world. As a leading insurance provider, Allianz PNB Life’s products and services are designed to meet the lifetime financial planning, wealth accumulation, and well-being aspirations of Filipinos. To learn more about the Allianz Global Wealth Report 2022, view the video here. For more information on Allianz PNB Life’s products and services, please visit www.allianzpnblife.ph.