Are Philippines Next for Disruption?

With a population of 102 million, the Philippines was the fastest-growing economy in Asia in 2016 and is one of the fastest-growing in the world.


With a population of approximately 102 million, the Philippines was the fastest-growing economy in Asia in 2016 and is one of the fastest-growing in the world. With more than half of the population under the age of 25 and buoyed by $50 billion in remittances and outsourcing annually, the economy is expected to outperform its peers over the coming years. This, combined with a $160 billion infrastructure plan, will set the stage for a rapid increase in the size of the middle class. See also: Insurtech Ecosystem Emerging in Asia The Philippine insurance sector is one of the oldest in the region, with development dating back more than 200 years — and it is among the region's most mature and competitive markets. There are now more than 32 million Filipinos covered by insurance, with 28 million of those covered by rapidly expanding micro insurance products. The ratio of coverage increased dramatically from 19% in 2010 to nearly 33% in 2016. There are currently 63 brokers, 31 life insurers, 71 non-life insurers and one reinsurance firm operating in the country. There is also a growing international presence, with global firms such as Axa and Mapfre investing heavily in the market. We believe that a country’s insurance market is ripe for disruption when it has: 1. A rapidly growing middle class; 2. Strong and sustained economic growth; 3. Increasing demand for insurance products; 4. Increasing levels of leisure and family-oriented activities; and 5. Growing levels of disposable income and, most importantly, society that is embracing digital technology and connections. The Philippines clearly has the first four attributes, but what about the digital aspect? Consider the following: The Philippines is the third-largest and fastest-growing market in smartphones in SE Asia. Three in 10 Filipinos own a smartphone. The average smartphone user spends three hours and 14 minutes a day on the internet via smartphone. Of that time, 78 minutes a day is spent on entertainment and related content, 56 minutes a day on apps and 40 minutes a day on communications services. Within 15 minutes of waking up in the morning, 79% of Filipinos have already checked their smartphones, and 40 million Filipinos are active on social media. Of those, 81% use Androids, with the remaining 19% using IOS. As to demographics and usage, 88% of users are under the age of 34, with 53% under the age of 24. The usage and social media aspects are even more telling, with 94% of all users on Facebook. And 32% of Filipino smartphone users download six or more apps per month, while 45% of those have paid for apps or made in-app purchases. Mobile banking is now used by 14% of smartphone owners, and this usage is increasing 25% per year. See also: Why Southeast Asia Is Ready for Disruption Is the Philippine insurance industry ripe for disruption? Is the Pope Catholic!

William Nobrega

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William Nobrega

William Nobrega is the Managing Partner of DTN Venture Partners, a boutique-consulting firm that focuses on advising insurance and tech companies on disruptive strategies for emerging markets and the New Consumer. Services include: Strategic planning, Market Entry Strategies, Strategic Alliances and Venture Capital strategies.


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