Insurance industry posts flat growth in 2016

MANILA, Philippines - Total premiums generated by the insurance industry inched up 0.29 percent to P231.90 billion last year from P231.20 billion in 2015, Insurance Commission head Dennis Funa said.

“Based on this data, we can say that the growth of the insurance industry from 2015 to 2016 is flat. But we are glad that there is no decline,” Funa told reporters in a press briefing.

He said while the life insurance sector registered a decline in premium income in 2016, the growth of the non-life insurance sector was able to slightly cover that deficiency.

“Whatever decline there was in the life sector it was slightly offset by the increase in the non-life sector,” Funa said.

Premiums collected by life insurance firms reached P182.80 billion last year, 3.04 percent lower than the 2015 data of P188.50 billion.

Funa said majority of the top players in the life insurance business saw a decline in their premium incomes.

Premiums generated from variable insurance products also decreased 4.23 percent during the period, due to less single premiums and the “unimpressive” performance of the stock market during the fourth quarter of last year.

On the other hand, the net premium written by non-life insurance companies during the period climbed 16.24 percent to P41.6 billion from P35.8 billion in 2015.

Funa said this growth was contributed by the good performance of seven non-life firms who posted significant increases in net premiums written, as well as the growing motor business in the Philippines.

Total premium generated by the mutual benefit association, the dominant players in the microinsurance sector, rose 8.78 percent to P7.5 billion as compared to P6.9 billion in the previous year.

Meanwhile, Funa also reported the industry’s total net worth increased 18.29 percent to P271.2 billion in 2016 from P229.3 billion in 2015 as some insurance companies raised their paid up capital.

This is in response to the mandatory increase in minimum net worth and paid up capital of insurance companies to P550 million effective Dec. 31, 2016.

The insurance industry also gained 11.38 percent in terms of assets to P1.3 trillion in 2016 from P1.2 trillion the earlier year.

Funa said insurance density, or the average amount spent on insurance by each individual in the country, decreased to P2,246.90 last year from P2,286 in 2015 as the growth in population outpaced the industry’s premium generation.