MANILA, Philippines - The Insurance Commission (IC) expects total premium income of the insurance industry to reach P300 billion in 2015, a 29-percent increase over the record P233 billion in 2014.
IC commissioner Emmanuel F. Dooc said the country’s insurance penetration rate (total premium income over gross domestic product) is also seen to surpass the two percent figure. From a low of 0.9 percent in 2010, it rose to 1.8 percent after the third quarter of 2015.
Over the past four years, the industry composed of life, non-life and mutual benefit associations (MBAs) recorded premium income growth by an average annual rate of 27 percent.
The country’s GDP has been averaging over 6.2 percent over a five-year period, the highest average in decades. The approaching national elections imply a very liquid environment, and the improving capital markets give more optimism for strong sales on insurance products this year, Dooc noted.
The IC head said he expects the new entrants in the life insurance sector to make major contributions in terms of premiums.
FWD Life Insurance, which has a bancassurance arrangement with Security Bank Corp., reported P2.5 billion in premiums in its first year. EastWest Ageas Life, the bancassurance joint venture between East West Banking Corp. and Ageas Insurance International Life of Belgium, starts the year with a six-month momentum.
Philippine National Bank (PNB) has entered into an arrangement with Allianz AG of Germany in the last quarter of 2015, and expectations are high as the bank is one of the largest in terms of branches while Allianz is one of the biggest on a global scale.
Last year, the non-life sector achieved a record level P37.3 billion premium income, roughly 58 percent higher than the previous year’s P23.6 billion.
The record quarterly net premiums of P11 billion in the fourth quarter of 2015 will serve as a strong momentum builder moving forward. Auto sales have been registering double-digit growth in terms of sales that would continue to fuel auto insurance sales. Property development in both residential and office space have not slowed down, increasing optimism in the sale of the other non-life lines including fire, engineering, marine, construction-related, among others. The MBAs reported premium earnings at a record P7.6 billion, small compared to its life and non-life counterparts. “But what is more important is that it increased the number of Filipinos with insurance coverage regardless of the amount of premium or the size of the policy,” Dooc said.
An estimated 30 million Filipinos are covered by micro-insurance products as of end-2015.