Insurance penetration rate slips further to 1.6 percent

MANILA, Philippines — The insurance industry saw its net income rise to P48 billion last year, but its contribution to the overall economy slipped further for the second straight year to only 1.6 percent.

Data from the Insurance Commission showed that the net income of the sector went up by 3.8 percent to P48.47 billion in 2023 from   P46.69 billion a year ago. 

This developed as the insurance density or the average spending of an individual on insurance increased by 1.45 percent to P3,450.97 from P3,401.60.

Nonetheless, the share of the sector to the country’s gross domestic product (GDP) went down to 1.6 percent from 1.73 percent, marking the second straight year of decline.

Broken down, the life insurance segment registered a 0.72-percent decrease in net income to P33.63 billion from P33.87 billion in 2022.

This even after total benefit payments declined by four percent to P101.17 billion.

Investments rose by 12 percent to P1.74 trillion, while assets went up by 10 percent to P1.79 trillion.

On the other hand, the non-life insurance segment’s net income soared by 30 percent to P9.11 billion from P7 billion.

Investments for the non-life segment grew by nearly 20 percent to P176.34 billion while assets slightly went down by less than a percentage to P368.97 billion, mainly placed on debt securities in both government and private sector, time deposits, investment property, mutual funds and real estate investment trusts, among others.

Further, the IC reported that mutual benefit associations (MBAs) increased their premiums by eight percent to P15.39 billion, while expenses slipped 25 percent to P7.19 billion.

Overall, the segment narrowed its net surplus by two percent to P5.73 billion.

Combined, total assets of the three segments improved by eight percent to P2.31 trillion in 2023 while total benefits paid went down two percent to P134.45 billion.

The 2023 insurance data came from submissions of 131 out of the 136 licensed insurers and MBAs.