The insurance industry’s premiums fell by 2.64 percent in the first half of the year, the Insurance Commission (IC) said, amid global market uncertainty and economic slowdown.
Based on the quarterly unaudited report submitted by insurance companies and mutual benefit associations (MBAs) to the IC, the industry’s premiums stood at P141.91 billion in January to June 2019, compared with P145.76 billion in the same period a year ago.
“The decrease in the total premium of the insurance industry can be attributed to the decrease in the uptake of single premium variable products due to global market uncertainty and economic slowdown,” Dennis Funa, insurance commissioner, said in a statement yesterday.
“Despite the year-on-year increase in the first year and renewal premiums in variable life products of 11.67 percent and 32.04 percent, respectively, the decline in the premium from the sale of variable life insurance products was caused by the significant decrease of single premium of 52.5 percent from P43.24 billion last year to P20.54 billion this year,” Funa added.
For traditional life insurance products, the life insurance sector recorded positive growth in all types of premiums.
“The premiums generated from the sale of traditional life insurance products increased by 12.55 percent to P31.17 billion as of end of second quarter of this year from P27.69 billion during the same period last year,” Funa said.
“A remarkable increase of 94.97 percent should also be noted in single premium policies of traditional life insurance from P1.1 billion in Q2 2018 to P2.2 billion of the same quarter in 2019,” he added.
As for the non-life insurance sector, the net premiums written grew by 12.98 percent year-on-year to P27.61 billion, from P24.44 billion the previous year.
Funa said the motor car insurance class maintained a leading position in terms of contribution to the total net premiums written, accounting for 49.47 percent of the total net premiums written of the non-life insurance sector.
The IC also said the MBA sector’s premium income as of end June this year increased by 13.54 percent to P5.88 billion, from P5.18 billion in the same period last year.
Meanwhile, the IC said the insurance industry’s asset base grew 11.79 percent to P1.72 trillion in the first half of the year, from P1.54 trillion in the same period a year ago.
“As of end of the first half of this year, the three sectors of the insurance industry registered positive growth in terms of assets. A significant portion of the industry’s assets or 88.37 percent (P1.52 trillion) were held in income generating investments,” Funa said.
The investment portfolio of the industry grew 19.59 percent as of June 2019 to P1.52 trillion, from P1.27 trillion in the same period last year.
“Government securities maintained their attractiveness to both life and non-life sectors comprising 36.21 percent of the P1.33 trillion total investment of the life sector, 32.82 percent of the P107.91 billion total investments of the non-life sector and 32.84 percent of the P85.25 billion total investments of the MBA sector,” Funa said.