Efforts to Promote Insurance

Various members of the Philippine insurance industry have undertaken efforts to ensure the increased participation by the public in insurance activities. The Philippine Insurance Commission (PIC) has noted that the Philippines has one of the lowest insurance penetration rates in the region (below 2%).

Given this setting, members of the industry, both in the public and private sectors, have demonstrated their eagerness to embrace novel schemes and technologies to broaden their reach, innovate their operations, and ensure a better, faster and more efficient delivery of services to their stakeholders.

In this regard, the following provides an update on recent advancements in the realms of bancassurance and AI-powered systems that have been adopted by various entities to secure a wider coverage for insurance undertakings.

Developments on Bancassurance in the Philippines

The Bangko Sentral ng Pilipinas (BSP) has announced that it is set to release revised guidelines on bancassurance, allowing banks to offer insurance products to their clients from more insurance providers. Under current regulations on bancassurance, the bank and the insurance company must belong to the same financial conglomerate before they may undertake bancassurance activities.

The proposed revisions will allow third-party insurance companies to sell their products to the bank’s customers as long as there is a contractual relationship between the bank and the insurance company. This expanded framework is expected to enable insurance companies to broaden their market reach while giving consumers greater access to insurance products.

Moreover, the increasing use of digital platforms will facilitate real-time data sharing, allowing banks and insurers to collaborate more efficiently and reach more consumers through integrated and technology-enabled distribution channels.

At present, however, the BSP is yet to release the finalised guidelines to the public.

Philippine Regulators Back the Use of AI

In 2023, during the 16th Philippine Insurance Summit, organised by the Insurance Institute for Asia and the Pacific, the Commissioner of the PIC urged life and non-life insurance companies to take advantage of new technologies to make insurance coverage more accessible. Given the increase in the frequency and intensity of natural disasters brought about by climate change, insurance has played a critical role in improving resilience against natural calamities as a proven risk and loss transfer mechanism. As such, the Commissioner urged discussions on providing wider and more inclusive insurance coverage, taking advantage of new technologies to make financial products more accessible, innovative and efficient.

Subsequently, during the Asian Banking & Finance and Insurance Asia Summit in 2025, key players in the banking and insurance sectors in the Philippines discussed the importance of exploring AI use and applications, specifically on their customer experience management. A member of the BSP mentioned that the Philippine financial industry is generally ready when it comes to joining the AI revolution, when it comes to equipping themselves with the right risk management tools.

In light of these developments, the BSP is gearing up to issue regulations governing the financial sector that will cover untouched areas in AI regulation, such as ethical use, managing bias, and improving its accuracy. In response, members of the financial and insurance sectors emphasise having the right strategic direction in exploring AI, which includes navigating the changes in regulatory priorities. Although the PIC has yet to announce its intention to issue regulations on the use of AI, it is likely that it will eventually do so given the increasing proliferation of the use of AI in the insurance industry and the PIC’s participation in the High-Readiness Consumer Protection Consortium (as discussed in the following).

Joining the High-Readiness Consumer Protection Consortium

On 21 April 2025, the PIC has joined the High-Readiness Consumer Protection Consortium, which is deploying an integrated, AI-powered complaints management system mandated under the country’s Internet Transactions Act or Republic Act No 11967 (the “Platform”). This initiative is supported by several Philippine government agencies, including the Philippine Deposit Insurance Corporation, as part of a whole-of-government effort to strengthen and promote consumer protection. Through this AI-enabled platform, Filipino consumers, particularly those facing urgent claims disputes, may obtain mediated and binding decisions more quickly, consistently and transparently. As of publication of this guide (22 January 2026), the Platform is currently in the implementation phase and not yet fully operational for public use, as it is being rolled out in stages.

A global initiative with a local impact

The nationwide roll-out of the Platform is part of a global initiative led by Proto, a Canadian AI company, and funded by the Gates Foundation. The partnership aims to scale inclusive, multilingual AI-driven grievance redress platforms for regulators in low- and middle-income countries. The Philippines is the first beneficiary of this initiative, with additional deployments underway in Namibia, Rwanda and other African countries.

From December 2024 to April 2025, Proto and its implementation partner, the University of Cambridge SupTech Lab, conducted diagnostic and design phases, including workshops with 26 participating government agencies. These activities produced the technical blueprint now being implemented on the Platform. Notably, both the BSP and the Philippine Securities and Exchange Commission (SEC) are already live on the Platform through earlier deployments.

Delivering on the Internet Transactions Act

The High-Readiness Consumer Protection Consortium operationalises Section 17 of the Internet Transactions Act, which mandates the establishment of a unified complaints tracking and referral system covering digital platforms, merchants and overlapping regulatory jurisdictions. The law aims to reduce regulatory fragmentation, improve consumer accessibility, and accelerate dispute resolution through a co-ordinated digital framework.

Further, the Internet Transactions Act provides that complaints must be acknowledged within three days, acted upon within seven days, and resolved within 20 days. These timelines are intended to be implemented through the Platform.

How the shared service model protects consumers

Beginning in June 2025, consumers were able to lodge text and voice complaints in local languages, including Tagalog and Cebuano, through AI assistants hosted on government websites and social media channels. Complaints are categorised using Proto’s proprietary natural language processing engine, routed to the appropriate agency or agencies, and tracked through a unified referral system. Government agencies will have access to real-time dashboards showing resolution timelines, sectoral trends, and sentiment analysis.

According to the PIC, the platform will address operational bottlenecks in its largely manual complaints process. Currently, eight staff members process approximately 300–400 complaints daily, with response times averaging close to 20 days – exceeding the Citizen’s Charter targets. In addition, non-complaint inquiries and misdirected cases further strain resources that could otherwise be devoted to mediation and investigation.

With this initiative, the PIC is positioned to enhance service delivery, improve regulatory responsiveness, and strengthen consumer confidence in the insurance sector through faster, more transparent and more consistent complaint resolution.

The Philippine Health Insurance Corporation’s use of AI in its operations

Following a serious ransomware attack that occurred on 22 September 2023, which possibly exposed the data of over 40 million people, affected workstations, the e-claims system, the member portal system, the collection system, and forced it to shut down some of its services, the Philippine Health Insurance Corporation (PhilHealth) has prepared to deploy AI to strengthen cybersecurity. At present, it is already implementing facial recognition and real-time verification in order to protect members’ data, prevent future attacks, enhance transparency, reduce fraudulent claims, and safeguard the integrity of its funds. Currently, PhilHealth is going around the country to educate its members about these new security features.

Furthermore, PhilHealth has announced that it is preparing to integrate AI into its operations by assisting in procurement, claims adjudication, and cleaning up its membership database. For instance, its AI-enabled pre-validation system will analyse electronically submitted claims to determine whether patients’ lab tests match their medical diagnoses. This mechanism makes it easier to flag fraudulent claims that are potentially ineligible or suspicious. This is in line with the Philippine Institute for Development Studies’ (PIDS) call for tighter implementation of fraud control measures within the state health insurer. According to PIDS, PhilHealth should expand the current scope of fraud to include other potential fraudulent practices that occur within the continuum of care, as well as those that can emerge as the system transitions to a global budget set-up. PhilHealth must develop a strategic plan to broaden the definition of fraud, strengthen fraud prevention mechanisms and deter providers from gaming the system.

In addition to technology-driven safeguards, PhilHealth also highlighted the significance of strengthening proper communication and information dissemination about the benefit packages offered to its members. In line with this, PhilHealth is targeting the clean-up of its membership data by the next year and AI implementation by 2027. PhilHealth is aiming to reduce abuse of the system while ensuring that members receive the full benefits due to them under the law through the combined use of advanced technology and improved public awareness.

Use of AI by the Private Sector

It has been reported that other players in the Philippine insurance industry have also implemented AI across their operations to optimise their business practices through AI-powered software. These include AIA Philam Life’s AI-powered digital underwriting platform to expedite insurance applications, Pru Life UK’s AI-powered health management app, and FWD Life Insurance’s AI-powered app.

A study conducted by the Swiss Re Institute in May 2023 found that the Philippines, as an emerging digital growth market, has shown a high level of trust in AI and companies that use AI. It has been observed that key players in both the private and public sectors of the Philippine insurance industry have already adopted AI in their operations and business processes. A member of a Philippine advisory firm has expressed that AI is not just a tool for efficiency but is a catalyst for innovation in the insurance industry. In the Philippines, there is a growing interest to leverage AI in order to enhance customer experiences and streamline operations.

On this point, the following sets out the various ways through which the public and private sectors of the insurance industry have recently allowed AI to influence their activities, conduct and performance.

In February 2020, it was reported that PruLife introduced its AI-powered health app, Pulse, which provides Filipinos with free, accessible digital tools for health management and wellness. Pulse also offers various health services and insurance products. Similarly, in October 2024, FWD launched FWD FitForMe, an AI-powered tool which provides users with AI-recommended insurance coverage plans based on profiles of people with similar backgrounds. Recommended options may range from comprehensive insurance plans to relevant digital products.

Furthermore, Igloo Insure, a Singapore-based Insurtech company in Southeast Asia, is planning to rebuild its business around AI by 2026. Igloo Insure’s strategy is for AI to support product configuration, consumer distribution, sales agents, claims teams and back-office operations. Its AI Claims Assistant initiates claims instantly, cutting the back-and-forth that frustrates customers. Moreover, its fraud detection models automate reviews and leave only complex cases for humans.

A Philippine partner of Igloo Insure has already integrated its AI Claims Assistant into its app. Its customers began submitting more complete claims on the first try because of the instant guidance they received. Consequently, there were fewer follow-ups, faster processing, and a noticeable increase in satisfaction.

The Philippines is cited as one of the more AI-ready markets in South-East Asia. In a study conducted by Public First and commissioned by Google in February 2025, financial and insurance services in the Philippines may see as much as PHP300 billion in added value if AI is used effectively.

Regulatory Measures to Ensure Data Privacy Protection Amidst AI Use

The adoption of AI tools and software may increase the risk of data breaches with the sharing and processing by AI of personal and sensitive data. Insurance providers must ensure that the data they collect remains safe and is used responsibly. In this regard, the PIC and the National Privacy Commission (NPC) issued Joint Advisory No 2025-001 to provide considerations on the use of Privacy Enhancing Technologies (PETs) in the insurance industry, specifically to insurance providers, insurance and pre-need companies, health maintenance organisations, mutual benefit associations, their respective agents, brokers, adjusters, intermediaries, all other entities under the regulatory control and supervision of the PIC, and personal information processors (PIP) of the foregoing entities (Covered Entities).

PETs are a “collection of digital technologies, approaches and tools that permit data processing and analysis while protecting the confidentiality, and in some cases also the integrity and availability, of the data and thus the privacy of the data subjects and commercial interests of [entities].”

Categories of PETs include:

• Data Obfuscation Tools such as anonymisation, pseudonymisation, synthetic data, differential privacy, and zero-knowledge proofs;
• Encrypted Data Processing Tools such as homomorphic encryption, multi-party computation, and trusted execution environments;
• Federated and Distributed Analytics such as federated learning, and distributed analytics; and
• Data Accountability Tools such as threshold secret sharing, and personal data stores.

Under the Joint Advisory, Covered Entities may adopt PETs to analyse data and develop insights from such data while upholding privacy and maintaining an appropriate level of security. Covered Entities shall be responsible for any processing of personal data through the adoption of PETs, including when the processing is outsourced or subcontracted. As such, Covered Entities must ensure that their use of PETs is compliant with data privacy laws and regulations, including breach notification.

In assessing which PET is most suitable for its business purpose, a Covered Entity may consider industry standards and best practices, technical compatibility, costs and efficiency. It may also utilise more than one PET.

However, prior to the adoption of PETs and thereafter as may be necessary, the Covered Entities must conduct a privacy impact assessment on the data processing system.