Pandemic drives demand for life insurance among new small business owners

MAJORITY of new business owners in the country bought life insurance products for protection and security during the coronavirus pandemic, according to a study by The Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife Philippines).

The study, titled “Filipino entrepreneurship and the bayanihan spirit: The resurgence of micro and small businesses in the Philippines,” was conducted in partnership with research firm InSites Consulting, Manulife Philippines said in a statement on Monday.

It surveyed 500 Filipinos nationwide aged 18 to 55 in May 2022.

Manulife Philippines said 40% of the respondents said life insurance was the top financial product they bought in the last 12 months, with 41% of the respondents also saying they planned to buy life insurance in the next 12 months.

This was followed by medical/health/accident insurance (36%) and nonlife insurance (17%) as the top financial products Filipino bought.

“These new business owners… became more conscious about preparing for financial challenges or crises, encouraging them to seek to buy life protection and security for themselves, and indicating their openness to consider financially protecting their employees,” Manulife Philippines said.

According to the survey, 41% of respondents started micro and small businesses during the pandemic, and 50% said they are very likely to continue their operations in the new normal.

The survey showed earning income was the top reason for starting a business at 43%, followed by maintaining financial stability (34%), and providing convenience and accessibility to people (8%).

The nature of their businesses also reflected market needs during the pandemic, with most of them going into food preparation and processing (41%), retail (30%), or delivery of essential goods and services (24%).

“The pandemic emphasized the vital role of micro and small businesses in sustaining our local and national economies, especially in times of crisis. Manulife aims to help Filipino entrepreneurs to protect their businesses by securing their most valued asset — their employees,” Manulife Philippines President and Chief Executive Officer Rahul Hora said.

“With our customizable insurance solutions, entrepreneurs can empower their employees with confidence and a sense of security in the midst of financial setbacks,” he added.

The life insurer said these businesses have “flourished” amid support from communities in the country.

Majority or 65% of respondents said they availed of products and services from local small and micro businesses, with 32% doing so more than once a week. The top reasons for their patronage were to support the economy (66%) and the community (63%).

“This study’s findings coincide with our previous studies that show how the pandemic spurred significant behavioral shifts among Filipinos, including business owners, regarding their finances. The socioeconomic disruptions Filipinos experienced in the past two years drove increased interest in purchasing life insurance as a financial safety net,” Manulife Philippines Chief Marketing Officer Melissa L. Henson said.

“Manulife aims to respond to this growing demand by offering relevant and affordable solutions that can give them the protection and financial security that they deserve,” Ms. Henson added.

Manulife Philippines said they offer group insurance products to help business owners provide their employees protection, such as “Group Protect,” a comprehensive life and accident insurance package with benefit add-ons.

The company was ranked eighth among life insurers in terms of premium income in 2021 with P17.51 billion, based on Insurance Commission data. It also booked a net income of P2.86 billion in 2021. — A.M.C. Sy