Insurers earn P8 billion in Q1, 27% more than 2017

MANILA, Philippines — The insurance industry’s net income grew by 27 percent to P8.03 billion in the first quarter from P6.34 billion in the same period last year, the Insurance Commission (IC) reported yesterday.

Insurance commissioner Dennis Funa said the industry posted a double-digit growth in net income despite the decline in the net income of the non-life insurance sector, which was offset by the growth in the life insurance segment.

According to preliminary data from the IC, the net income of the life insurance sector in the first three months of the year rose by 31.16 percent to P6.31 billion from P4.81 billion in the same period in 2017.

This accounted for 78 percent of the industry’s total net income for the review period.

“The life insurance sector posted an increase of 31.16 percent to P6.31 billion from P4.81 billion during the same period which was brought about mainly by the remarkable increases in premium income, underwriting income, and gross investment income,” Funa said.

On the other hand, the non-life insurance sector’s net income as of end-March declined 19.21 percent to P469 million from P580.5 million a year ago.

“The 19.21 percent decrease in the reported net income of the non-life insurance sector from P580.5 million to P469 million was due to the decreases in premiums earned and commissions earned, coupled with the increases in losses incurred, commission expenses and other underwriting expenses,” Funa said.

The IC said the remaining P1.26 billion in the industry’s net income came from the mutual benefit associations, the biggest player in the microinsurance business.

Meanwhile, data from the IC also showed that the insurance industry’s premium income in the first quarter increased 34.38 percent to P76.64 billion from P57.04 billion in the same period last year.

All sectors – life insurance, non-life insurance and mutual benefit associations – posted double digit growth during the period.

The life insurance sector, for its part, collected P61.79 billion in premiums as of end-March, up by 40.18 percent from the P44.08 billion recorded in the same period in 2017.

“While the premiums generated from both traditional life insurance products and variable life insurance products posted double-digit growth, the increase in the premiums collected of the life sector is attributed to the 51.24 percent growth in the sale of variable life insurance products,” Funa said.

Premiums collected by the non-life insurance sector, likewise, rose by 13.29 percent to P12.34 billion from P10.89 billion a year ago. The bulk of the amount came from the sale of motor and fire insurance products, according to Funa.

Lastly, contributions or premiums generated by mutual benefit associations (MBAs) reached P2.51 billion in the first three months, up 21.75 percent from the P2.06 billion posted a year ago.

The IC said the industry’s total paid-up capital grew by 10.88 percent to P52.87 billion from P47.68 billion year-on-year due to the significant increases in the paid-up capital of four life insurance companies.

In terms of total assets, the insurance industry posted an increase of 8.81 percent to P1.55 trillion from P1.42 trillion.

“With the impressive performance of the insurance industry during the beginning quarter of the year, we are optimistic industry players will maintain this momentum for the rest of the year,” Funa said.