In the Philippines, access to insurance has traditionally been limited to those who can afford to pay high premiums and complete lengthy application processes. However, the rise of electronic know-your-customer (eKYC) technology is changing this narrative, making it easier for Filipinos to access insurance coverage.
How Many People in the Philippines Are Insured?
less than 2% of the population in the Philippines has access to insurance coverage, which is one of the lowest rates compared to other Asian countries. However, insurance companies can take advantage of the widespread usage of mobile phones in the country by developing mobile applications to cater to customers and increase their appeal.
Challenges Facing the Philippine Insurance Industry?
1) Low Insurance Penetration
The Philippine Life Insurance Association (PLIA) conducted a study which found that the life insurance penetration rate was only 1.6% in 2018, leaving the vast majority of Filipinos without any form of life insurance. This means they are vulnerable to financial hardship in the event of a sudden death or disability.
2) Low Insurance Literacy
In addition to low insurance penetration, the Philippine insurance industry also faces a challenge in low levels of insurance literacy. Many Filipinos are not familiar with the different types of insurance products available, nor do they fully understand the benefits of it. As a result, insurance companies may find it difficult to effectively market their products to potential customers.
Digital Insurance as a Means To Expand Access to the Philippines?
The use of digital technology can help to expand access to insurance for Filipinos. Digital insurance platforms makes it easier and more convenient for people to purchase insurance policies, as well as provide information and support.
The transition to a digital platform can help to improve insurance accessibility in a few ways:
- Improves financial literacy by making insurance products more accessible and understandable. Customers are able to research and compare insurance products and access educational resources presented in an engaging way.
- Simplifies the onboarding process and provides real-time updates on policies and claims, reducing confusion and increasing transparency.
eKYC as a Tool to Supplement the Transition to Digital Insurance
💡 eKYC (electronic know your customer) is a process of verifying a customer’s identity using electronic means, such as facial recognition, biometric scanning, and other digital tools.
eKYC technology enables a more efficient and streamlined process for verifying a customer’s identity, aiding insurance companies in transitioning to digital insurance platforms. Insurers no longer have to conduct time-consuming and labor-intensive manual verification.
The digital insurance experience can be enhanced through eKYC in several ways:
- Eliminates the need for physical documents which can be a significant barrier to insurance access for many Filipinos, particularly low-income families and individuals who may lack the necessary documents for traditional application processes.
- With eKYC, all that is required is a smartphone or computer with an internet connection, making insurance more accessible to a wider range of people.
- Enables insurers to expand their reach beyond traditional geographic boundaries, reaching customers who live in remote areas or lack access to traditional banking services. This is particularly important in the Philippines, where many people live in rural areas that are difficult to access.
- Reduce fraud in the insurance industry. By using digital tools to verify customers’ identities, insurers can reduce the risk of identity theft and other types of fraud. This can help to reduce costs and make insurance more affordable for everyone.
Bottom Line
eKYC is playing a critical role in expanding access to insurance for Filipinos. By reducing barriers to entry, improving efficiency, and reducing fraud, eKYC is helping to make insurance more accessible, affordable, and secure for everyone.
As this technology continues to evolve, it is likely that we will see more innovative solutions that will help to make insurance accessible to even more people in the Philippines and beyond.
How Innov8tif Can Help
Our EMAS eKYC systems are holistically developed to provide an integrated and extensive cybersecurity framework to protect both the interests of your business and your customers.
To learn more about EMAS eKYC and how it helps to make insurance coverage more accessible to the general public, head over to our wiki page.
