MANILA, Philippines — The premium income generated by the local insurance industry declined in the first quarter as the life insurance industry posted a decrease in premium collections, according to the Insurance Commission.
Citing the unaudited quarterly reports submitted by local insurers, Insurance Commissioner Dennis Funa said the industry’s total premium income in the first three months went down by 7.74 percent to P70.71 billion from P76.64 billion in the same period last year.
Funa attributed the declline to the contraction in the premiums collected by the life insurance industry, particularly from single premium variable life insurance products.
“While the non-life insurance and MBA (mutual benefit association) sectors posted increases in net premiums written and contribution, respectively, the life insurance sector recorded a decrease in total premiums,” Funa said.
“The decrease in the total premiums of the life sector can be attributed to the year-on-year 59 percent decrease in premiums collected from single premium variable life insurance products,” he said.
With the decrease, IC data showed that insurance penetration – or the ratio of the premium volume to the country’s gross domestic product – declined to 1.68 percent in the first quarter from 1.96 percent a year ago.
Insurance density, or the ratio of premiums to the total population, also shrunk to P658.35 per capita from P724.41 billion.
Nevertheless, Funa said the insurance industry was able to book a high double-digit growth in net income during the first quarter.
He said total net income as of end-March jumped by 45.77 percent to P11.72 billion from P8.04 billion in the same period last year.
The life insurance sector, in particular, generated P9.08 billion in net income during the first quarter, 43.9 percent up from P6.31 billion a year ago.
Funa said this may be attributed to the decreases in reserve, benefits payment, and other underwriting expenses of life insurers.
He said the net income of the non-life sector likewise surged by 121 percent to P1.04 billion compared to P470 million last year, which can be attributed to the increase in premiums earned, commissions earned, and other underwriting income.
The MBA sector also recorded a net surplus of P1.6 billion as of end-March, higher by 27 percent from the P1.26 billion recorded in the same period last year.
As of end-March, the industry’s total assets stood at P1.68 trillion, up by 8.41 percent from last year’s level of P1.55 trillion.
Total net worth also increased by 20.17 percent to P371.38 billion from P309.05 billion, while total investments rose by 13 percent to P1.49 trillion from P1.32 trillion.