IC to assess pandemic impact on insurers

MANILA, Philippines — The Insurance Commission (IC) plans to conduct a survey to assess the impact of the coronavirus disease 2019 (COVID-19) pandemic on the business condition of local insurance companies.

In a phone interview with The STAR, Insurance Commissioner Dennis Funa said the regulator is eyeing a second round of survey to see how the pandemic has affected the financial position of industry players.

“Basically, the first survey focused on the impact of the pandemic on the amount of health claims. So maybe we can expand from that,” Funa said. “The survey will focus on the financial position and overall business condition of insurers.”

The results of the first survey, which was released last June, showed that insurers, mutual benefit associations, and health maintenance organizations (HMOs) disbursed P326.95 million worth of benefits to clients who were affected by COVID-19 from April 16 to May 8.

However, Funa said the survey may only focus on insurance firms.

The IC earlier said it recognizes that insurance companies may be suffering due to COVID-19 in a variety of ways such as declining revenues, volatility in the stock market, interest rate changes, increased claims, credit risks, supply chain and service disruptions, and overall decrease in the value of assets and investments.

Insurance players have also said that the pandemic had an adverse impact on their performance.

In particular, the Philippine Insurers and Reinsurers Association (PIRA) said sales went down “drastically” amid the imposition of community lockdowns to contain the spread of the pandemic.

Moreover, PIRA said industry players also saw an erosion in their asset base due to the volatility in the financial markets.

Nevertheless, Sun Life of Canada (Philippines) Inc. chief executive officer and country head Benedict Sison, who also heads the Philippine Life Insurance Association, expressed confidence that the local insurance industry would recover post-pandemic as more Filipinos now see the need for financial protection and security.

The IC had also assured the public before that insurance companies are well-capitalized to meet their obligations to policyholders.

On the pre-need industry, Funa confirmed that PhilPlans First Inc. has closed down most of its branches “as part of its cost-cutting strategy and migration to an online system.”

Funa said the IC is exhausting all efforts to support the insurance industry, HMO and pre-need industries amid the health crisis through regulatory reliefs in the form of circular letters.

Earlier, the IC allowed life insurance and non-life insurance industries to conduct remote selling of insurance products.

The agency has also eased the quarterly net worth and risk-based capital requirement of insurers.

This November, Funa said the IC is expected to issue more circular letters to assist pre-need firms on accounting matters.