Insurance sector’s profit jumped in Q1

The insurance industry’s profit jumped by a fourth in the first quarter on the back of higher sales by both the life and non-life sectors.

Moving forward, Insurance Commissioner Dennis B. Funa said in a statement that he was “confident that the stronger growth in the first quarter of this year can be sustained by the industry,” although the official did not provide yearend targets.

The latest preliminary Insurance Commission data showed that the industry’s net income amounted P6.336 billion as of end-March, up 25.77 percent from P5.038 billion a year ago.

The life sector’s profit grew 6.52 percent year-on-year to P4.81 billion, while non-life posted an 11.98-percent growth to P580 million, the Insurance Commission said.

Total first-quarter premiums climbed 19.51 percent to P57.035 billion from P47.725 billion last year.

At the end of the first three months, life insurers’ premiums increased 14.19 percent year-on-year to P44.08 billion.

“The positive growth in the premium income of the life sector can be attributed to the increase in the premiums generated from the sale of variable life insurance products. While the premium income in traditional life insurance declined by 3.87 percent, the life insurance sector registered a 23.21-percent increase in premium income from the sale of variable life insurance products,” Funa explained.

As for non-life insurers, their net premiums written rose 19.4 percent year-on-year to P10.89 billion during the first quarter.

“One of the factors in the increase in net premiums written of the non-life sector is due to the increase in the premiums generated from the fire and motor business. The fire business contributes to almost half or 48.24 percent of the total net premiums written of the non-life insurance sector. On the other hand, the net premiums written from motor business comprises 18.01 percent of the total net premiums written,” Funa said.

Members of the Chamber of Automotive Manufacturers of the Philippines Inc. and the Truck Manufacturers Association sold 94,026 vehicles from January to March, up 23 percent year-on-year.

Car companies belonging to the Association of Vehicle Importers and Distributors, meanwhile, sold 23,312 units during the three-month period, up by a tenth.

As for mutual benefit associations, they contributed P2.06 million to the industry’s premiums during the January to March period, according to the Insurance Commission.

In the first quarter, industry assets totaled P1.425 trillion, up 22.26 percent.

Also, first-quarter net worth jumped 35.85 percent year-on-year to P292.951 billion.

Total investments at end-March also grew 21.35 percent to P1.237 trillion.

“The life insurance sector’s total investment stood at P1.1 trillion, 40 percent of which were invested in government bonds, while the non-life insurance sector’s total investment amounted to P74.65 billion, 39.08 percent or P29.17 billion of which were invested in government bonds,” according to Funa.