Insurers post record P37 B profit in 2018

MANILA, Philippines — The local insurance industry’s total net income rose to a new record high of P37.43 billion in 2018 as all sectors saw an increase in the premiums they generated, according to the Insurance Commission.

Citing unaudited quarterly reports sent by insurance companies to the IC, Insurance Commissioner Dennis Funa said the industry’s net income for 2018 increased by three percent to P37.43 billion from the P36.39 billion recorded in 2017, marking 2018 a new banner year for the industry.

This happened as the industry’s total premium income improved by 11.67 percent to P290.15 billion last year from P259.82 billion in the previous year.

According to Funa, all sectors, composed of life insurance, non-life insurance and mutual benefit associations (MBAs) posted positive growth in their premium income in 2018.

The life insurance sector, in particular, generated P228.61 billion in premium income last year, 12.89 percent higher than the P202.50 billion reported in 2017. This accounted for 78.79 percent of the whole premium income of the insurance industry.

Of the amount, Funa said 75 percent or P170.22 billion was contributed by variable life insurance products, up by 14.3 percent from P148.9 billion in 2017.

Premiums collected from traditional life insurance products also increased by 8.91 percent to P58.40 billion from P53.62 billion.

Funa said the non-life insurance sector also reported a 4.63-percent increase in net premiums to P50.83 billion in 2018 from P48.58 billion in the prior year.

He said the motor car business comprised more than half of the total premium income of the non-life insurance sector, which climbed by 8.55 percent to P26.9 billion from P24.72 billion in 2017.

Lastly, the premium generated by the MBA sector in 2018 grew by 22.42 percent to P10.7 billion from the previous year’s level of P8.47 billion.

Meanwhile, the IC chief said the insurance industry also continued to expand its resources, with total assets reaching P1.58 trillion as of end-2018. This represented a 1.28 percent growth from the P1.56 trillion recorded as of end-2017.

“Despite the slight year-on-year decrease in the total assets of the life insurance sector, the industry’s overall assets reached an all-time high. The life insurance sector maintains to hold the bulk of the assets of the industry with P1.26 trillion in assets or 79.75 percent of the total assets of the industry, while the non-life insurance sector and MBA sectors shared the remaining 20.25 percent with P230 billion and P90 billion, respectively,” Funa said.

Furthermore, he said the insurance industry also posted a record-high net worth amounting to P337.37 billion in 2018, a 5.33 percent increase from P320.3 billion in the previous year.

He said the life insurance industry and the MBA sector increased their total net worth to P219.91 billion and P35.13 billion, respectively, while the non-life insurance industry’s net worth declined to P82.33 billion.