THE health maintenance organization (HMO) industry saw a significant expansion of 137.31 percent in its total net income in the third quarter of the year, according to the Insurance Commission (IC).
Reynaldo Regalado, insurance commissioner, said in a statement the industry recovered from its reported net loss of P2.15 billion as of the third quarter of 2023 to a positive net income of P800.86 million this year.
“The notable increase in net income was driven by a 22.5 percent growth in the industry’s total revenue notwithstanding the 15.75 percent growth in total expenses,” Regalado said.
“The significant turnaround from net loss in the third quarter of 2023 to net income in the third quarter of 2024 shows the HMO industry was able to overcome previous performance challenges and a return to profitability since Q1 2024,” he added.
The report was obtained from the unaudited interim financial statements submitted by 27 HMOs.
Total revenues surged to P59.65 billion in the third quarter of 2024 from P48.69 billion in the same period in 2023, marking an increase of 22.5 percent.
The IC said this was mainly due to the 20.65 percent increase in membership fees collected by the industry in the third quarter, which comprises 95.06 percent of the industry’s revenues.
The industry’s total expenses widened by 15.75 percent due to a 14.05 percent increase in healthcare benefit and claims paid, to P46.67 billion from P40.92 billion a year ago.
The industry’s total assets grew by 18.42 percent year-on-year to P75.87 billion from P64.07 billion.
The insurance regulator said this is attributable to the 16.21 percent increase in the membership fee receivable, net account, a 51.81 percent increase in cash equivalents, and a 79.75 percent rise in cash in banks.
The HMOs’ total invested assets, which accounts for 27.16 percent of the industry’s total assets, likewise grew by 11.57 percent to P20.61 billion in the third quarter of 2024 from P18.47 billion in the same period in 2023.
This was driven by a 51.81 percent rise in cash equivalents and a notable 87.47 percent growth in its investment in property and equipment, year-on-year.
Significant increases in membership fee reserves and claims reserves are the main drivers behind the 19.64 percent rise in the HMO industry’s total liabilities, which climbed from P53.66 billion in the third quarter of 2023 to P64.2 billion in the same period in 2024.
