Insurance industry nets P40 billion in 9 months

MANILA, Philippines — The country’s insurance industry saw its net income inch up by 4.2 percent to P39.93 billion as of end-September, mainly driven by earnings from the non-life sector.

Latest data released by the Insurance Commission (IC) showed that the net income of the industry went up compared to the revised P38.31 billion in the same period in 2023.

Insurance density, or the average spending of an individual on insurance, increased by 12.4 percent to P2,910 from P2,588.

Broken down, the non-life insurance segment’s net income improved by 17.2 percent to P6.41 billion from P5.47 billion a year ago.

Net premiums written, fire insurance, motor car, health, accident and aviation lines all posted improvements. Only the suretyship insurance line declined during the period.

Total premiums earned for the non-life segment went up by 10.3 percent to P49.02 billion from P44.46 billion in the comparable year-ago period.

On the other hand, losses incurred climbed by 19.2 percent to P21.85 billion from January to September compared to the P18.32 billion in the same time last year.

Meanwhile, the life insurance segment registered a 0.13-percent decrease in net income to P28.75 billion from P28.79 billion in 2023.

Total premium income grew by 14.5 percent to P263.21 billion in the first nine months from P229.9 billion previously. Invested assets also grew by 15 percent to P1.93 trillion, while assets rose by 14.5 percent to P2 trillion.

But, the IC recorded a 14.1-percent contraction in total benefit payments to P63 billion from P73.3 billion a year ago.

The mutual benefit associations saw their premiums go up by 6.3 percent to P12.2 billion from P11.5 billion last year. Total invested assets increased by 13.2 percent to P148.09 billion.

In a separate release, the IC said it has approved the guidelines on investments in infrastructure projects under the Philippine Development Plan (PDP).

“With the issuance of the PDP for 2023 to 2028, there was a need for the commission to review and update its guidelines on allowable investments in infrastructure projects under the PDP,” Insurance Commissioner Reynaldo Regalado said.

The guidelines provide market players a framework for infrastructure investments that an insurance or professional reinsurance company may undertake.

For life insurance companies, the total allowable investments in infrastructure projects under the PDP should not be above 40 percent of their admitted assets, based on their latest approved annual statements.

For non-life insurance companies and professional reinsurers, the maximum allowable investments in infrastructure projects under the PDP should not exceed 40 percent of their respective net worths.

The new guidelines also impose risk charges on investments in PDP infrastructure projects. The risk charge for equity instruments stood at nine percent, while the charge for debt instruments was at six percent.

However, the IC may impose a lower risk charge for debt instruments if the same have high credit ratings given by an external credit rating agency.