Foreign investors wait for next wave of market consolidation

The life market has been undergoing fundamental change since about half of the foreign companies that obtained licences during the period 1995 to 2000 have withdrawn or merged. Interest rates have fallen and the larger life offices, in particular the foreign companies, have repriced their traditional products and are moving away from guaranteed interest rate returns to participating and investment-linked contracts, which will put further pressure on the smaller domestic companies to compete

In the past, the sale of life insurance products in the Philippines has been concentrated on Manila and the surrounding areas of the main island, Luzon, but the challenge is now to sell the benefits of life insurance to the other parts of the country. As a result of the wide spread population and the low level of incomes in many areas the density of life insurance is not high.