AI adoption could unlock the Philippine insurance industry’s potential

Insurers report strong gains from integrating AI, potentially helping the Philippine insurance industry capture up to ₱300 billion in value, according to think-tank analysis.

Insurance in the Philippines is still heavily reliant on legacy systems, which slows down operations and limits growth. Experts say many insurers operate with outdated IT infrastructure, fragmented data, and manual workflows, which hinder scale and digitization.

But Artificial Intelligence (AI) may just be the key to moving this industry forward. 

Industry players that have integrated AI into the core of their operations have yielded positive results, particularly in providing quicker responses to customer inquiries and complaints, which are often among the biggest lagging problems of the sector.

AI has been used to craft product or package recommendations tailored to a customer’s specific interest, profile, and even activity history. Insurance technology company Igloo said that with AI, they’re now able to deliver this service “within seconds,” compared to the usual days-long waiting time.

AI improves claims processing and customer service

Cutting down the time to process claims through an AI claims assistant and providing 24/7 customer service via a chatbot can significantly reduce customer queuing, accelerate resolution of issues, and help insurers close more deals. These improvements also reduce operational strain on frontline staff, a recurring challenge for firms relying on manual processes.

Industry analysts also point out that the Philippines still has one of the lowest insurance penetration rates in Southeast Asia, hovering below two percent of GDP. This leaves a large portion of the population without coverage, creating what insurers call the “protection gap.” AI-enabled tools, especially for underwriting and distribution, could help broaden access by making products easier to understand, cheaper to process, and faster to approve.

According to Insurance Asia, total industry premiums in the Philippines grew 13.45% year‑on‑year in Q3 2024, while insurance density rose by 12.44% in the same period.

Legacy systems remain a hurdle

While business might be booming, 40.6 percent of local insurers cite legacy systems as a major hurdle, pointing to tedious manual labor and paper-heavy workflows as key operational bottlenecks.

Companies also cite that the old system does not have a comprehensive customer database, making it difficult to pull and analyze profiles. This limits underwriting accuracy, slows down verification, and makes it harder to design products for specific market segments.

But the Philippine insurance industry is projected to get a P300-billion boost once it starts adopting AI into the core of its operations, according to a study by think tank Public First.

Managing risk and fraud

Another factor driving urgency is the Philippines’ exposure to natural disasters—one of the leading drivers of insurance losses in the country. Local insurers say that AI-powered risk modeling and faster claims validation could help them respond more efficiently after typhoons, floods, or earthquakes. This could also strengthen insurers’ ability to price risk more accurately and improve their long-term financial resilience.

AI has also been used by companies to perform bulk reviews of claims and detect fraud, helping address security risks and inconsistencies that arise from scattered or non-unified databases.

In the future, AI could even be used for marketing to craft more personalized messaging for specific customer groups and expand insurance services to more Filipinos. Local industry players share the view that AI integration is the next step forward to realize their potential and strengthen the sector’s role as a financial safety net, especially in a time of increasing natural disasters.

 

 

Cutting down the time to process claims through an AI claims assistant and providing 24/7 customer service via a chatbot can significantly reduce customer queuing, accelerate resolution of issues, and help insurers close more deals.

 

 

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