MANILA, Philippines — Slower economic growth, as well as uncertainties caused by headwinds in the international market dragged down the performance of the local insurance industry in the first half, according to the Insurance Commission.
In a statement, Insurance Commissioner Dennis Funa said the insurance industry’s total premium income from January to June declined by 2.64 percent to P141.91 billion from the P145.76 billion in the same period last year.
Funa attributed this to the decline in the sales of variable life insurance products amid uncertainties in the global market.
“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,” Funa said.
In particular, Funa said premium generated from the sale of single premium variable products plunged by 52.5 percent to P20.54 billion in the first six months from P43.24 billion last year.
On the other hand, Funa noted that traditional insurance products sold by life insurance firms 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 from P27.69 billion in 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 the second quarter of 2018 to P2.2 billion in the same quarter in 2019,” he said.
Meanwhile, Funa said the non-life insurance sector posted P27.61 billion in net premiums written in the first semester, 12.98 percent up from P24.44 billion a year ago.
The IC chief said almost half of the premiums generated by the non-life insurance sector were contributed by motor car insurance.
The mutual benefit association (MBA) sector, the biggest contributor to microinsurance, likewise improved its premium income by 13.54 percent to P5.88 billion from P5.18 billion in 2018.
Funa said IC’s data has been extracted from the quarterly unaudited report submitted by insurance companies and MBAs to the IC.
Based on their reports, the insurance industry’s asset base grew by 11.79 percent to P1.72 trillion as of end-June from P1.54 trillion in the same month of last year.
“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.
He said the industry’s investment portfolio as of June 30 expanded by 19.59 percent to P1.52 trillion from P1.27 trillion.