Insurance growth slows in 9 months

MANILA, Philippines - The country’s insurance industry continued to take a beating as total premium and net income registered negative growth in the first nine months of 2014.

The insurance industry consists of 26 life and 71 non-life insurance companies.

From total premium income of P156.8 billion in the first nine months of 2013, it fell 15.26 percent this year to just P132.9 billion.

Total net earnings also slipped 15.64 percent to P12.3 billion by the end of September this year, from P14.6 billion in the same period last year.

Life insurers once more dragged the industry down as total premium income shrunk 19.4 percent and net income contracted 10.45 percent.

Non-life insurers total gross premiums written (GPW) expanded 0.23 percent but earnings fell 38.89 percent, due mainly to the huge claims from several natural disasters.

But beyond premium income, the country’s insurers conspired to bring total assets to a record P1.04 trillion, 21.97 percent better than the P855 billion in the same period last year.

Insurance Commissioner Emmanuel F. Dooc admitted that the target was to hit the P1-trillion mark in the last quarter of the year. “While we had new entrants in the industry, it was the capital build-up and investments that reflected industry’ true positive health,” Dooc said.

Total investments grew to P799.4 billion end September, up 8.87 percent from the P734.3 billion in the same period last year.

Investments were made in government securities (GS), private or corporate bonds, in the equity market, property sector, loans and mutual funds, among others.

Bulk of the investments went to the bond market, with amounts reaching P417.8 billion, and majority invested in GS. The balance was split equally in stocks and other private investments.

Total networth grew by 38 percent to P236.7 billion, while paid-up capital expanded by 21.22 percent from P32.5 billion the previous year.

Of the total industry assets, the life sector accounted for P878.8 billion up by 21.28 percent from the P724.6 billion.

Total investments expanded by almost 10-percent to P738.6 billion.

Total networth ballooned by 51.2 percent to P173.2 billion, while paid-up capital grew 15.3 percent to P14.3 billion.

Dooc said that the consistent drop in sale of single pay premiums remains the main reason for the poor performance in total premiums. “However, sale of traditional life insurance policies are doing very well, while the investment-linked products remained strong,” he added.

The non-life insurance sector accounted for P164.2 billion in assets, up 25.7 percent from the P130.5 billion last year.

Total networth grew by 13.65 percent to P63.3 billion while total paid-up capital expanded by 24.9 percent to P25.1 billion.

Increasing incidences of natural calamities were eating into their profits with mounting number of claims. Industry leaders added that the industry’s tax burden only made it difficult to cope with increasing calamities, such as floods, typhoons.