Insurance Industry Forecasts 15% Growth

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The insurance industry is forecasting a 10-15 percent industry growth this year based on premium generation as the economy and businesses exhibit robust performance in the next 18 months.

"The insurance sector was stable in 2003 but since we see better economy this year we expect to increase industry income and sales by at least 15 percent," according to Philippine Life Insurance Association president Jose L. Cuisia Jr.

Cuisia is banking on increased business activity during the election weeks when consumer spending will expand.

"2004 is an election year and the money circulation is expected to double. When people has money or dispensable cash, they can buy anything (including) insurance," he added. The Philippine presidential election will be held in May.

In the meantime the R250-billion life insurance sector has reiterated its appeal to government to approve a list of incentives to enhance its ability to mobilize long-term instruments and encourage financial savings.

Cuisia as PLIA chief said insurance is a natural source of long-term capital to bolster economic development. To absorb the funds and re-invest these in securities and other instruments, the industry is asking the Insurance Commission to grant them incentives in the form of tax perks to support its long-term investments.

They argued that since the industry is a natural ally in the campaign to develop a well-functioning fixed-income or bond market, it should be accorded enough incentives. …