Insurance premiums soar 70% to record P108 B

MANILA, Philippines - Total gross premiums of the country’s insurance industry swelled nearly 70 percent to P108 billion in the first semester of 2013, the highest ever attained despite undergoing consolidation in both the life and non-life sectors.

In the similar period in 2012, total premiums reached P64 billion. Combined gross premiums at the end of 2012 stood at P170 billion.

The country’s insurance industry has reported total assets worth P737 billion in the first semester of 2013, up nearly 10 percent from the P672 billion in the same period last year.

This figure, however, is just 8.26 percent of the total assets of the country’s banking sector, which was valued at P8.9 trillion. Almost equal to the P739 billion of the thrift banking sector, and larger than the rural bank’s P190 billion.

Total net income grew by 22.16 percent to P9.4 billion by end June 2013, from P7.74 billion registered in the same period last year. Total net income for the whole of 2012 was P12.2 billion.

Total investments meanwhile grew to P529 billion, up 11.37 percent from the P475 billion in the same period in 2012.

For the whole of 2012, combined investments reached approximately P514 billion.

Total networth amounted to P170 billion in the first semester of 2013, up 7.78 percent from the P158 billion in the similar period last year. Last year, total networth was already worth P180 billion.

Total benefits paid out rose to P31.9 billion, up slightly from P24.6 billion released last year.

Due to the closure of some life and non-life companies, total paid-up capital shrunk 3.65 percent to P31.9 billion.

Meanwhile, the country’s insurance penetration rate stood at a measly 1.97 percent, one of the lowest in the Asia Pacific region.

The penetration rate is measured as the ratio of premium underwritten to the country’s gross domestic product (GDP).

“The target is to reach three percent by 2016,” Emmanuel Dooc, Commissioner of the Insurance Commission, said in a briefing over the weekend.

Market penetration grew by 27 percent to 22 million of the country’s total population of 97 million.

Unfortunately, majority of the insurance premiums are in the life sector or 78 percent of the total insured.

Dooc is optimistic that the number of insured in both life and non-life insurance sector as well as the profitability of the country’s insurance industry would break all records, with the implementation of Republic Act (RA) 10607.

RA 10607, or the amendments to the Insurance Code 1974, will update the industry to new products, new investment opportunities, and new technologies.

It would likewise empower the IC to settle disputes as well as equitable powers to the public sector.