Insurance penetration declines to 1.75% of GDP

MANILA, Philippines — The insurance industry saw its net income slightly decline to almost P10 billion in the first quarter amid a drop in the life segment.

According to data released by the Insurance Commission, the sector’s net income fell to P9.86 billion from the previous year’s P9.95 billion.

Insurance density or average spending of an individual on insurance decreased by one percent to P872.56 from P881.49.

The share of the sector to the country’s gross domestic product (GDP) also dropped to 1.75 percent from nearly two percent in the first quarter last year.

Broken down, the life insurance segment registered a 12.87 percent drop in net earnings to P6.5 billion, largely due to lower premium income, particularly in single premiums in variable life insurance products.

Investments, meanwhile,  improved by 3.21 percent to P1.64 trillion, while assets went up by 3.3 percent to P1.71 trillion.

According to the IC, there was a measly 0.99 percent increase in benefit payments to P25.97 billion.

On the other hand, the non-life insurance segment’s net income more than doubled to P2.63 billion from P1.11 billion.

Investments for the non-life segment grew by 7.61 percent to P150.61 billion while assets climbed by 7.85 percent to P373.16 billion, mostly going to debt securities in both government and private sector, time deposits, investment property, mutual funds, and real estate investment trusts, among others.

Mutual benefit associations (MBAs) increased their premiums by 15 percent to P3.78 billion, but expenses picked up by 21 percent to P2.51 billion.

Overall, the segment narrowed its net surplus by 47 percent to  P731 million.

Combined, total assets of the three segments improved modestly to P2.22 trillion while total benefits paid inched up  by five percent to P35.03 billion.

The first quarter insurance data came from submissions of 130 out of the 136 licensed insurers and MBAs.