MANILA, Philippines — The insurance industry recovered in 2017 as the life, non-life and microinsurance sectors posted growth during the period, according to the Insurance Commission (IC).
According to unaudited statistics from the IC, the insurance industry recorded a total premium income of P259.65 billion, 11.97 percent higher than the 2016 result of P231.88 billion.
This was an improvement from the 0.29 percent growth reported by the industry in 2016.
Total assets also expanded by 17.89 percent to P1.55 trillion from the P1.31 trillion recorded in the previous year, while the industry’s total net worth rose by 16.32 percent to P315.44 billion.
The industry’s paid-up capital was likewise higher by 10.47 percent to P50.75 billion in 2017 from P45.94 billion a year ago.
“2017 has turned out to be another banner year for us, with industries under our jurisdiction performing exceedingly well,” Insurance commissioner Dennis Funa said in his speech during the 69th Anniversary celebration of the IC.
“The three sectors, life, non-life and MBAs (mutual benefit association), all posted positive growth in the four parameters of assets, premiums earned, net worth and paid-up capital or guaranty fund,” he said.
The life insurance sector, alone, reported a premium income of P202.34 billion in 2017, up 10.69 percent from P182.79 billion in the previous year.
Total assets of life insurance firms also amounted to P1.26 trillion as of end-2017, while net worth and paid-up capital reached P202.90 billion and P20.56 billion, respectively.
“Equities is a big factor. If you focus on the life sector, a significant portion of that is derived from variable life insurance that is really the driving force of the sale of life insurance today. It’s the investment product that insuring public is looking into,” Funa said.
The non-life insurance sector accounted for P48.56 billion of the industry’s total premium income, an improvement of 16.71 percent from 2016.
The sector’s total assets stood at P207.33 billion as of end-December, with total net worth and paid up capital reaching P81.98 billion and P29.28 billion, respectively.
“I think (this is driven by)the overall performance of the economy. One big growth sector is car insurance. Motor vehicle continues to go up,” Funa said.
Lastly, the mutual benefit associations (MBA), the biggest players in the microinsurance business, reported a 16.89 percent increase in the premium collected in 2017 to P8.74 billion from P7.48 billion in 2016.
Total assets of MBA amoun-ted to P77.45 billion, while total fund balance rose to P30.55 billion. The sector’s guaranty fund also totaled P908 million.
Going forward, Funa said the Insurance Commission would continue seeking reforms to improve its services and help sustain the financial strength of the industry.
However, the insurance chief cited some challenges along the way, including the implementation of the Tax Reform for Acceleration and Inclusion Act.
“I understand that the lower and simplified tax on estates will likely affect the business of insurance, particularly life insurance whose proceeds were previously, commonly used to pay off estate taxes. With the new lower tax scheme, resorting to this course may no longer be necessary,” he said.
Despite these challenges, Funa said the industry should not be discouraged as life insurance remains to be a viable and beneficial product.
The commissioner said the growth of the industry is expected to continue in 2018 with the strong performance of the local bourse and the Build Build Build initiative of the government.