Philippines: Insurance industry posts strong 76.5% net income growth
Source: Asia Insurance Review | Oct 2016
The Philippine insurance industry recorded total net income of PHP19.17 billion (US$413.6 million) for the first half of this year, a 76.52% growth from PHP10.86 billion for the corresponding period in 2015, per preliminary data based on quarterly reports submitted by the life and non-life insurance sectors to the Insurance Commission (IC).
Insurance Commissioner Emmanuel F. Dooc said: “In terms of net income, the life sector fared better than the non-life sector. The life sector posted a 68.73% increase in its net income during the first half of the year from PHP9.05 billion to PHP15.27 billion. This increase can be attributed to the significant increase in capital gains, as well as increase in commissions earned and other miscellaneous income of some insurance companies. The same can also be attributed to the decline in underwriting expense of some companies.”
The non-life sector, on the other hand, posted an increase in net income of 18.23% year-on-year from PHP1.81 billion to PHP2.14 billion.
Total premium fell 9%
However, the total premium income of the insurance industry in the second quarter of 2016 fell by 9.12% to PHP105.52 billion.
“Broken down, the life insurance sector’s premium income dropped by 16.83% from PHP98.83 billion to PHP82.20 billion while the non-life insurance sector rose by 13.95% from PHP17.28 billion to PHP19.69 billion,” said Mr Dooc.
He added: “Based on the submission of the industry players, the decline in the total premium was mainly due to the lower sales performance by the life insurance sector. In particular, there was a significant drop in the premium production in variable life insurance products of the major players in the life insurance sector.”
Despite the dip in the premium income of the industry, he is very optimistic that the premium income of the industry players will grow for the year. Based on past experience, the industry performs better in terms of premium production in the second half of the year, he added.