PREMIUMS earned by the insurance industry for the first quarter of 2020 grew by 10.53 percent to P78.15 billion compared to the same period in 2019, data that regulators said do not fully reflect yet the impact of the Covid-19 pandemic. This, even as they aired hopes the sector’s hit during the quarantines would be blunted by the government’s response.
Citing insurers’ unaudited quarterly reports, Insurance Commissioner Dennis Funa said the figure was up from P70.71 billion as of end-March last year.
In terms of net worth, the entire insurance industry suffered a 7.03-percent drop to P345.27 billion in the first quarter this year from P371.39 billion in 2019.
Nevertheless, insurance density —the amount of premium per capita or average spending of each individual on insurance—climbed by 9.89 percent.
Still, Funa said, the figures “do not yet fully reflect the effects of the pandemic” given that the national government implemented the enhanced community quarantine in Luzon on March 16.
“The Insurance Commission is hopeful that the economic and financial impact of the pandemic in the succeeding reporting quarter will, to a certain degree, be mitigated by the measures in the various Covid-19-related Circular Letters that we have issued,” Funa added.
The schedule for the submission of the insurance industry’s unaudited Quarterly Reports on Selected Financial Statistics was extended until June 30 and extended again until July 31 due to the effects of the Covid-19 pandemic.
Of the total premium income generated by the industry for the first three months of the year, P60.9 billion came from the life insurance sector. This was up from its total premium income of P54.4 billion a year ago.
“Despite the decrease in first-year variable life insurance premiums of 6.04 percent, single and renewal premiums posted a significant increase of 25.80 percent and 18.49 percent, respectively. Traditional life insurance products also posted an overall increase of 4.28 percent,” Funa said in a statement.
However, the life insurance sector saw a “remarkable” 19.83-percent decrease in its total net worth to P201.6 billion as of end-March this year from last year’s P251.5 billion.
The IC said this can be attributed to the 80.89-percent drop in fluctuation reserves to P14 billion from P73 billion a year ago, as well as to the decline in market value of investments for the first quarter of this year.
On the other hand, non-life insurance industry’s aggregate net worth surged by 21.24 percent to P100.37 billion as of end-March this year from P82.78 billion in the same period in 2019. The sector’s total assets also rose by 15.68 percent for the three-month period this year to P269.5 billion from P232.94 billion last year.
Moreover, its net premiums written also climbed by 7.01 percent with a total of P14.40 billion in the first quarter compared to P13.46 billion in the same period last year.
“The increase in NPW of the non-life sector is attributable to increases in Fire and Accident Insurance at 59.69 percent and 18.60 percent, respectively. Similar with the past reporting periods, Motor Car business still comprised the major share of the NPW with 44.44 percent followed by Fire business with 19.88 percent, and Accident with 9.05 percent share. These three lines of business accounted for 73.37 percent of the total NPW for Q1 2020,” Funa said.
Meanwhile, the Mutual Benefit Associations’ (MBAs) net surplus for the first quarter of the year contracted by 28.2 percent to P1.15 billion from the previous year’s P1.6 billion. Funa said this may be traced to the decrease in collections and other income coupled with the increases in operating expense and benefit expense by 23.87 percent and 4.43 percent, respectively.
Nonetheless, MBAs’ total assets as of end-March surged by 15.41 percent to P105.5 billion from P91.4 billion in the same period last year. Its total fund balance also jumped by 16.66 percent to P43.3 billion for the first quarter this year from P37.1 billion in 2019.