As economy recovers, insurance industry sales, profit up in end September
Insurance Commission
MANILA, Philippines—With a recovering economy and more awareness about insurance products amid a prolonged pandemic, industry sales and profit climbed during the first nine months of 2021, the Insurance Commission (IC) said on Friday (Dec. 31).
Total premiums earned, or insurance policies sold, by life and non-life insurers as well as mutual benefit associations (MBAs) from January to September rose 28.7 percent to P278.7 billion from P216.5 billion in 2020, the IC said in a statement.
IC data showed that end-September industry-wide premiums also surpassed the P224.9 billion recorded during the first nine months of 2019, pre-pandemic.
Sales dipped in 2020 due to quarantine restrictions which took a hit on face-to-face transactions, but insurers had been able to quickly adjust to the new normal wrought by COVID-19 as they increasingly tapped digital channels to sell products and services.
As such, the insurance industry’s aggregate net income climbed 31 percent to P37.5 billion from P28.6 billion in the same nine-month period last year. Their end-September 2021 bottom line was also higher than the P31.7 billion in 2019.
The stronger sales and profit came despite also larger benefits that insurance firms had to disburse in the first nine months of 2021, partly due to COVID-19 claims.
The IC said the life, non-line and MBA sectors paid out P101.2 billion in benefits as of September, a jump of 45.1 percent from P69.8 billion last year. Pre-pandemic benefit payments reached P78.1 billion in end-September 2019.
“The growth of the life and non-life insurers’ and MBAs’ aggregate premiums and contributions earned and their aggregate net income in the third quarter of 2021 are indicative of economic recovery amid the COVID-19 pandemic,” Insurance Commissioner Dennis Funa said.
Gross domestic product (GDP) reverted to an average of 4.9-percent growth during from January to September 2021 as more economic sectors were reopened from the most stringent COVID-19 lockdowns since the onset of the pandemic last year, which, in turn, had slid the Philippines to its worst post-war recession in 2020.
The bigger benefit payments, meanwhile, “highlighted the commitment and responsiveness of our insurers and MBAs to the needs of the insuring public despite the challenges posed by the COVID-19 pandemic,” Funa said.
The IC said the insurance industry’s aggregate investments grew 14 percent year-on-year to P1.78 trillion in end-September.
Also, total assets further rose by 12.5 percent to P2.01 trillion as of September — the first time it breached the P2-trillion mark. A larger asset base meant the insurance industry has more resources and better capability to assume its liabilities.
Per sector, IC data showed that life players grew their premium income by 32.8 percent year-on-year to P230.6 billion in the first nine months of 2021, mainly due to “the good performance shown by the single premiums of variable life insurance that reported a significant increase,” Funa said. As such, life insurers’ net income increased 39.4 percent to P29.9 billion.
Non-life companies’ total net premiums rose 7.6 percent year-on-year to P38.2 billion, even as motor and aviation insurance sales fell during the first nine months, Funa said. The non-life sector’s net income shrank by 10.4 percent to P4.3 billion as “total underwriting expenses are greater than the total underwriting income,” the IC chief said.
MBAs’ end-September contribution and premium income increased to P9.9 billion, such that their net surplus jumped 40.2 percent year-on-year to P3.3 billion, Funa said.
These latest IC figures were based on the reports submitted by 128 of the 135 insurance players licensed by the regulator.
