Insurance industry slows down in H1

MANILA, Philippines - After several years of continued growth, the country’s insurance industry took a beating in the first six months of 2014 as net earnings and premium income fell.

Data from the Insurance Commission showed that in the first semester of 2014, total premiums generated by the industry amounted to P81.7 billion, down 24.49 percent from P108.2 billion in the same period last year.

Likewise, net earnings shrunk 13.45 percent to just P8.18 billion this year from P9.4 billion in the first half of 2013.

The life and non-life insurers are the key contributors to the insurance sector.

But on a positive note, the industry’s total assets remain on track to reach the target P1-trillion level by the end of the year.

By the end of June this year, total assets hit P951.7 billion, up 14.53 percent from P830 billion last year.

Likewise, total investments went up 8.19 percent to P573.6 billion while networth grew 5.82 percent to P181.2 billion.

Total paid-up capital expanded 22.26 percent to P38.9 billion due to the entry of new players aside from the mandatory increase in capital.

The life insurance sector took a heavy beating in terms of total premium income as the dominant single-pay premiums went down. From P95.7 billion in the first semester of 2013, it plummeted 30.92 percent to P66.1 billion this year.

Net income contracted to P6.9 billion this year, seven percent lower than the P7.4 billion in the first semester of 2013.

However, both assets and paid up capital reflected gains of 12.18 percent and 18.17 percent, respectively.

Total assets expanded from P706.6 billion last year to P792.6 billion. Paid-up capital rose to P14.2 billion as of end-June from P12 billion in the same period last year.

Meanwhile, the non-life insurance sector incurred huge losses in earnings due mainly to large pay-outs related to natural catastrophes such as typhoons.

From a net income of P2 billion by the end of June 2013, earnings shrunk 36.8 percent to P1.28 billion this year.

Total gross premiums written and total premiums earned both reflected positive gains of 19.68 percent and 20.70 percent, respectively.

Total assets ballooned by 27.89 percent to P159 billion this year from P124.3 billion last year. Paid-up capital grew to P24.7 billion or 24.75 percent more than the P19.8 billion last year.

Investments grew 12.75 percent to P64.9 billion as insurers rushed to build up reserves for anticipated losses due to natural catastrophes.