Kathmandu. The economic progress of the ASEAN region is now at the centre of global discussions. With a rapidly growing population, urbanization, and technological change, the challenge for the region is to ensure long-term financial stability and social security.
A recent study by Prudential has provided important insights in this regard. Expanding life and health insurance is not only a safety net but also a powerful catalyst for economic growth and sustainable development, says the study. The study, titled “Beyond Coverage: The Social and Economic Impact of Insurance in ASEAN,” analysed data from Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam over two decades.
According to the report, increasing life insurance coverage by 50 per cent by 2050 would increase per capita GDP by about 5 per cent and overall GDP by more than 4 per cent. On the other hand, if non-life insurance (which includes health insurance) increases by 50 percent in the same period, then per capita income could increase by 3 percent and GDP by more than 2 percent.
These statistics prove the importance of insurance not only in terms of economic growth but also in terms of social welfare. Insurance brings financial security to people’s lives. Health insurance improves the quality of life by reducing medical expenses. This leads to a healthier workforce and increased productivity in the workplace.
Life insurance reduces risk by providing financial security to families. It enables people to make long-term plans. Which has a positive impact on economic activity. In short, the insurance sector plays a direct role in workforce and human resource development.
Prudential’s proposal makes it clear that supportive policies such as short-term tax incentives and premium tax exemptions will boost the insurance sector. But in the long run, the real challenge is to build a skilled workforce, public-private partnerships, and raise public awareness.
There is a huge opportunity for policymakers to put insurance at the heart of economic planning. Insurance not only provides protection in times of crisis but also strengthens the economy by mobilizing investment, infrastructure, green energy and capital.
However, this progress has not been easy. In many ASEAN countries, the rural population still considers insurance to be an unnecessary expense. Lack of trust in insurance companies is also a major obstacle. Therefore, not only policies, but also transparency, credibility and public awareness will be prerequisites for the long-term success of this sector.
ASEAN economies are now at the pinnacle of global potential. At this time, the expansion of life and health insurance should be seen not only as a means of financial security but also as a strategic investment in economic growth and a sustainable future. Source: Insurance Asia
