The microinsurance sector’s premium production declined by 14.5 percent in 2020, amid implemented protocols as a response to the coronavirus disease 2019 (COVID-19) pandemic crisis, the Insurance Commission (IC) reported yesterday.
The IC said in a statement that based on unaudited quarterly reports on selected financial statistics from microinsurance providers, the industry collected P7.8 billion in contributions in 2020, down from the P9.12 billion recorded in 2019.
“It is highly likely that the decrease is due to the effects of the implementation of community quarantine protocols to curb the spread of the COVID-19 pandemic,” Dennis Funa, insurance commissioner, said.
The non-life insurance sector took the largest hit due to the continuing implementation of said protocols, with the sector’s premium production down by 25.46 percent year-on-year to P913.51 million from P1.23 billion the previous year.
The mutual benefit associations (MBAs) sector followed, exhibiting a 15.13 percent contraction to P4.46 billion last year from P5.26 billion in 2019.
The life insurance sector likewise posted an 8.17 percent decrease to P2.42 billion from P2.64 billion a year ago.
“Nevertheless, we are hopeful that these adverse effects are only temporary; and that the situation will improve in the succeeding months,” Funa said.
In contrast, the total number of estimated insured lives by microinsurance products grew by 11.56 percent to 50.35 million in 2020 from 45.13 million the previous year.
“We hope that these figures will be confirmed by the later submission of audited annual statements for the year 2020 by our microinsurance providers,” Funa said.
If (this) will be confirmed, then the IC will have reached its target of 50 million microinsured lives two years earlier — a target that we initially foresaw that will be reached by 2022,” he added.
MBAs remain to have the largest market share in terms of the number of estimated lives insured by microinsurance products, accounting for 57.52 percent of 50.35 million, or 28.96 million lives.
The life and non-life insurance sectors accounted for 29.19 percent and 13.29 percent of the market share, or 14.7 million and 6.69 million lives microinsured, respectively.
“It is likely that the inverse relationship of the decrease in contribution or premium production of the microinsurance sector, on the one hand, and the increase in the estimated number of lives insured by microinsurance, on the other, may be attributed to the effects of the extension of grace periods in microinsurance products and the grant of similar extensions in payment of microinsurance premiums or contributions due to the COVID-19 pandemic,” Funa said. – Angela Celis
