Insurance sector seen to post double-digit growth in 1st half

Insurance Commissioner Dennis B. Funa

THE Insurance Commission (IC) is hopeful that the insurance industry will continue to post double-digit growth during the first half of the year, coming from the strong performance of the industry in the first quarter.

Insurance Commissioner Dennis B. Funa, talking to financial reporters, noted how well the life, nonlife and mutual benefit associations (MBAs) fared in the first three months of 2018.

“Well we are hoping [for double-digit growth in the first half], but of course the first quarter was very good, there’s no indication that the second quarter will not be good,” Funa said.

In terms of inflation, the insurance commissioner conveyed the feedback of most industry players that their sales were not affected by such. Funa pointed out that the IC does not see any adverse impact from inflation on the insurance industry.

“I’ve been asking around if the insurance companies are affected by inflation and apparently they are not. We don’t see any adverse impact,” he added.

The Philippine economy posted an inflation rate of 5.2 percent for June, exceeding the Bangko Sentral ng Pilipinas’s (BSP) target range of 2 percent to 4 percent by the end of the year.

“Inflation doesn’t affect the consumer side because they still purchase compulsory insurance even if they don’t want to,” he said.

In May this year the IC reported the total premium of the insurance industry in the first quarter posted a double-digit increase of 34.38 percent to P76.64 billion, from the P57.04 billion it posted in the same period in 2017, with all three sectors exhibiting strong performances.

Broken down, the life-insurance sector posted P61.79 billion in premiums collected as of end-March, up by 40.18 percent, as well as the premiums of the nonlife-insurance sector growing by 13.29 percent to P12.34 billion. Income generated from contributions or premiums by MBAs reached P2.51 billion in the first three months of the year, posting an expansion of 21.75 percent.

The IC said the rise in premium collection can be traced from the sale of variable life insurance (VUL) products which grew by 51.24 percent for the period, while premium generated from motor and fire insurance products accounted for the majority share in the total premium collected by the nonlife-insurance sector.

In terms of paid-up capital, the insurance industry’s total paid-up capital grew by 10.88 percent to P52.87 billion, from P47.68 billion year-on-year. This was traced to the significant increases in the paid-up capital of four life-insurance companies.

The insurance industry’s total investments hit P1.32 trillion in the first quarter, up 6.85 percent from P1.24 trillion last year. In terms of total assets, the industry grew by 8.81 percent to P1.55 trillion, from P1.42 trillion last year.

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