Non-life insurance sector in for major losses in Q4
The non-life insurance industry is poised to register a net loss in the fourth quarter, due to the anticipated deluge of claims in the aftermath of “Supertyphoon Yolanda.”
The Insurance Commission said the total insurance coverage in areas hardest hit by Supertyphoon Yolanda was estimated at P70 billion, the bulk of which was accounted for by the non-life insurance sector.
“The non-life insurance industry posted a significant increase in net income in the first three quarters of the year. Unfortunately, that net income may be wiped out in the fourth quarter,” Insurance Commissioner Emmanuel Dooc said in a briefing Wednesday.
He said the expected loss of non-life insurance firms in the last quarter of 2013 would be due to claims related to Yolanda and the recent earthquake.
Prior to the devastation by the supertyphoon, which hit Central, Eastern, and Western Visayas in November, a 7.2-magnitude earthquake struck Bohol province and nearby areas in October.
Cleto Obello Jr., a representative of the industry association of non-life insurance firms in the country, said in the same briefing that the expected spike in claims could drag income performance of non-life insurers until the first half of 2014.
In the first three quarters of the year, the country’s non-life insurance firms together posted a 69-percent year-on-year growth in net income to P2.66 billion. There are 69 non-life insurers in the country.
But despite the expected drag in net income, Dooc said the non-life insurance industry would be able to service all insurance claims.
Dooc said insurance firms could recover within the short term from their expected net loss in the fourth quarter of this year and in the first half of 2014.
“The insurance industry has proved to be a strong one. The firms will eventually recover,” he said.
Meantime, Dooc said insurance firms were directed to set up insurance-claims centers in areas hit by the supertyphoon. This is to make it easier for policyholders in the affected areas to file and get their claims.
