Philippine insurance lacks clear definition of vulnerable buyers: AXA

The lack of clear regulatory guidance also remains an issue.

The Philippine insurance sector lacks a clear definition of vulnerable customers despite the large number of Filipinos who may face barriers to accessing financial services, said Karen Jill Espineli, chief compliance officer and general counsel at AXA Philippines.

The country has about 11 million senior citizens, 2.6 million persons with disabilities (PWDs), and 17.8 million people living in poverty, Espineli told the Asian Banking & Finance and Insurance Asia Summit in the Philippines.

“Meanwhile, around 28.7 million Filipinos have only basic financial literacy,” she said. “Within AXA, we define vulnerable customers as individuals whose personal situation makes them more likely to experience harm at any stage of the customer journey.”

The lack of clear regulatory guidance also remains an issue.

The Bangko Sentral ng Pilipinas defines vulnerable sectors as groups such as the poor, children, women, persons with disabilities, indigenous peoples, overseas Filipinos and their families, and older persons, as well as individuals facing economic risks like low or irregular incomes.

Other definitions also appear in the Philippine Development Plan, which includes low-income individuals, women, indigenous peoples, the elderly, and persons with disabilities, Espineli noted.

“However, in the insurance industry, there is still no single definition of vulnerable customers,” she said.

Other jurisdictions have introduced more specific protections. “In Hong Kong, banks are required to consider the needs of vulnerable customers when designing and promoting products.”

Meanwhile, Espineli pointed out that the shift towards digitalisation in financial services could also create challenges for certain groups. “If you are a senior citizen, how can you keep up with AI?”

Vulnerable customers also face risks such as exposure to unsuitable products, she said. “Financial products are becoming more complex, and terms such as personalisation or investment-linked products may be difficult for some customers to understand.”

Espineli urged insurers to define vulnerable customers within organisations, train employees to recognise vulnerability, test products with vulnerable groups, strengthen controls to prevent abuse, and monitor outcomes.

“We want to make sure that when elderly customers, PWDs, women, and farmers interact with us, they know they are protected,” she added.