Serving underserved markets

The Philippines’ Insurance Commission reported that the insurance industry only contributed 1.72% to the country’s gross domestic product (GDP) in the past year, underscoring how it lags behind its Asian neighbors in insurance penetration. While the growth of micro, term, and flexible insurance options catering primarily to the lower-income and middle-class sectors has made insurance products more accessible, Filipinos’ low financial literacy remains a significant hurdle. Financial advisors have a unique opportunity to be among the country’s frontliners in addressing this reality with their know-how and diverse skill sets. Three MDRT members from the Philippines shared how they are reaching out to underserved markets and educating them about insurance benefits for themselves and their loved ones.  

Reaching out to the most financially vulnerable   

In her day job as a social worker, Christianne Santos, a one-year MDRT member, often deals with people asking for monetary aid. She encourages fellow financial advisors to use such opportunities as a springboard for discussions on how prospects can better empower themselves financially, with a particular focus on educating them about life insurance. She doesn’t get intimidated by concerns about their ability to pay premiums. “The ones who think they can’t afford insurance usually need it. They are likely to get hurt the most in the face of illnesses, accidents, and unexpected deaths of family members,” she said. “This can severely strain their already limited resources and sink them deeper into financial vulnerability.”  

Santos advises working with prospects to determine which insurance options are manageable. “They must not be afraid to start small, which is better than not starting at all.”  She highlights reaching out to the youth. “When younger, they will likely be healthier and have more time. These factors make it easier to fit their premiums into their budget.”     

Santos believes in inspiring prospects to dream of bigger, better things for themselves and contextualizing how insurance can support them in achieving their life goals. “I then commit to journey with them in growing and pursuing these dreams,” she said.     

Engage blue-collar service workers 

Working as a public servant and a financial advisor, Arlene Genove, a seven-year MDRT member from Sariaya, Quezon, takes some time to treat herself, such as hiring a massage therapist and an eyelash specialist. While her main goal is to rejuvenate herself before the next grind of a working week, she naturally engages the service professionals in small talk. “Since these sessions usually take an hour, I prod them to tell me about their lives. Eventually, they open up about their financial challenges, such as tuition and other fees, since they send their kids to school. I’ve learned that they have limited insurance knowledge and are not financially educated as they struggle to budget their income. As a concerned city councilor and financial advisor, I seek ways to help them.” 

Blue-collar service workers make up more than half of the Philippines working population, often engaged in industries like construction, manufacturing, hospitality, home maintenance, and personal care, which may further increase, as recent employment reports found that blue-collar jobs registered among the highest growth as the country’s labor market strives to return to pre-pandemic levels. Unfortunately, they continue to face job insecurity and low wages, making them vulnerable to income fluctuations without access to benefits like health insurance or retirement plans. Furthermore, limited financial literacy hampers informed decision-making, savings, and investments.  

While these realities suggest that financial advising these workers will be an uphill climb, Genove believes it is worth engaging them because they benefit significantly from insurance coverage. Casual conversations about managing money may yield potential solutions to their financial struggles, which may open their eyes to insurance later on. The first step is to probe and listen to their stories.  “We won’t know the people’s struggles if we don’t listen to them. Who knows? You might be in a position to help them at some point.”  

Educate micro, small and medium enterprises (MSMEs) about group insurance    

For Paolo Lipana, a two-year MDRT from Makati City, Philippines, she suggests for financial advisors to consider making a concerted effort to reach MSMEs. “As far as helping people is concerned, these small business owners need protection for themselves, their staff, and businesses. Knowing that these MSMEs are one of the biggest contributors to the country’s growth, I took steps to protect them and their employees.”  

MSMEs comprise 99.6% of all registered businesses in the Philippines and are considered the backbone of the economy. As around 80% of MSMEs in the Philippines employ family members, extending insurance coverage to these businesses allows opportunities to pitch products that protect loved ones.   

However,  MSMEs are underserved as financial advisors prioritize more prominent companies, according to Lipana. MSMEs need to be made aware of the group insurance they can avail of from financial advisors. Given this challenge, he needed to thoroughly discuss the importance of having one for the owners. “Initially, similar to individuals, it is seen as an expense for the company. However, I needed to explain that this type of insurance would save money for the business as they don’t need to cover all expenses if something happens to their staff. Attracting and retaining people in their business is an added benefit.”  
 

Contact: MDRTeditorial@teamlewis.com