THE squeeze is real, and it is being felt in every household ledger and every company budget in the country. Renewed hostilities between the United States and Iran have sent fuel and energy prices surging to levels we have not seen in years. Shipping through the Strait of Hormuz and the Red Sea is disrupted, and everything that arrives on our shores by sea — which is to say, nearly everything — now costs more to bring here. Inflation remains stubbornly above target. Food prices are under pressure, with an El Niño looming over our rice supply. Growth forecasts for the year have been cut, one after another.
When money is tight, families and businesses look for things to cut. And in our industry, we are seeing exactly where the knife falls first. Renewals are coming in lower than expected. Take-up on new policies is soft. Some clients are reducing their sums insured to shave the premium; others are letting their cover lapse altogether. I understand the impulse completely. Insurance is invisible until the day it is not, and an invisible expense is the easiest one to strike from a strained budget.
But I must say this plainly, as someone who has spent a working lifetime in this industry: dropping your insurance now is a false economy, and the timing could hardly be worse.
Consider the moment we are in. We are entering the heart of typhoon season. We are in an El Niño year, with all the drought, crop failure and fire risk that brings. And it has been barely seven weeks since a magnitude 7.8 earthquake struck off Sarangani — a stark reminder, if we needed one, that this archipelago sits on one of the most hazard-exposed stretches of the planet. To walk away from protection at precisely this moment is to gamble the roof over one’s head against the hope of a quiet year. Our history offers no basis for that hope.
There is a second, quieter danger, and it is the one that troubles me most. Because inflation has driven up the cost of construction materials, imported parts and labor, the price of rebuilding a home or repairing a vehicle has risen sharply. This means that even those who keep their policies, but freeze or trim their sums insured to save on premium, are drifting into underinsurance without knowing it. The cruelest moment in our business is not a denied claim; it is a valid claim honestly paid, that turns out to cover only a fraction of what it costs to rebuild. Families discover this only after the flood, after the fire, after the quake — when it is too late to fix.
And behind every individual decision to lapse lies a national problem. Around 98 percent of our natural catastrophe losses are already uninsured. Every policy dropped this year widens that gap and shifts the burden of the next disaster onto savings, onto borrowed money, onto the charity of relatives, and ultimately onto the national government and the taxpayer. We have seen this movie before. It does not end well, and it never ends cheaply.
Let me be equally honest about our industry’s side of the bargain. If affordability is the problem, the answer cannot simply be to tell hard-pressed Filipinos to pay up. It is our job to offer better structures: installment payment terms that match household cash flow, rightsized covers that protect the essentials rather than lapse entirely, and parametric products that pay out quickly and transparently at a lower cost. It is also why the industry continues to press for policy reforms — the rationalization of premium taxes that make protection more expensive than it needs to be, and tax-deductible catastrophe reserves that let insurers absorb shocks without passing every peso through to price. Affordability must be engineered, not merely wished for.
To every family and business owner weighing whether to renew: before you drop your cover, talk to your insurer or broker. Ask about restructuring, about payment terms, about what a smaller but honest level of protection would cost. Between full cover and no cover lies a wide middle ground, and we would rather meet you there than meet you after the storm.
The winds will come. The ground will shake. The only real question is who will still be standing behind you when they do.
