Insurers’ sales declined 2.6 percent to P141.9 billion in the first half as fewer consumers bought insurance products when the global economic prospects turned sour, the Insurance Commission (IC) said.
The latest data released by the regulator on Thursday showed that the industry’s premiums as of end-June were lower than the P145.8 billion reported by life and nonlife insurance firms in the same six-month period last year.
“The decrease in the total premium of the insurance industry can be attributed to the decrease in the uptake of single premium variable products due to global market uncertainty and economic slowdown,” Insurance Commissioner Dennis B. Funa explained in a statement.
“Despite the year-on-year increase in the first year and renewal premiums in variable life products of 11.7 percent and 32 percent, respectively, the decline in the premium from the sale of variable life insurance products was caused by the significant decrease of single premium of 52.5 percent from P43.2 billion last year to P20.5 billion this year,” Funa added.
Funa nonetheless said life insurers increased their sales of traditional products.
“The premiums generated from the sale of traditional life insurance products increased by 12.6 percent to P31.2 billion as of end of second quarter of this year from P27.7 billion during the same period last year. A remarkable increase of 94.9 percent should also be noted in single premium policies of traditional life insurance from P1.1 billion in the second quarter of 2018 to P2.2 billion of the same quarter in 2019,” according to Funa.
The first-half net premiums written by nonlife insurers also rose 12.9 percent to P27.6 billion from P24.4 billion a year ago.
“The motor car insurance class maintained a leading position in terms of contribution to the total net premiums written accounting for 49.5 percent of the total net premiums written of the nonlife insurance sector,” Funa said.
As for the mutual benefit association (MBA) sector, its premium income climbed 13.5 percent to P5.9 billion at the end of the first six months from P5.2 billion last year, the IC data showed.