Life insurers’ premium income up 6%
THE OVERALL premium income of the life insurance industry inched up by 5.9% in 2020 despite the coronavirus pandemic’s impact on overall sales, data from the Insurance Commission (IC) showed.
The industry saw its premium earnings go up to P247.72 billion last year from P233.92 billion in 2019, the IC said in a statement on Tuesday, citing reports from 31 life insurance companies in the country.
The increase mainly came from the 7.7% growth in the premium income from variable life insurance products, which rose to P183.2 billion last year from P170 billion in 2019. Single premiums and renewal premiums went up by 19.72% and 13.58%, respectively.
Meanwhile, premiums written in traditional life policies inched up by 1.09% to P64.48 billion in 2020 from P63.78 billion in 2019, largely from the 13.7% growth in renewal premiums.
“It has been observed by the financial sector leaders that generally the savings of the middle-class sector grew due to restraints in consumer spending because of the pandemic,” Insurance Commissioner Dennis B. Funa said in a statement.
The life insurance industry saw its paid-up capital jump by 7.66% to P25.28 billion in 2020.
The regulator attributed this to higher investments of companies both in traditional and segregated businesses, which grew by 6.5% to P1.48 trillion in 2020 from P1.39 trillion the year prior.
This pushed the sector’s combined assets to hit P1.53 trillion in 2020, up 7.7% from P1.42 trillion in 2019.
Despite higher overall premiums written, however, the industry’s total sales measured through new business annual premium equivalent (NBAPE) still declined last year because of the limited face-to-face selling that agents could do during the coronavirus pandemic.
The IC said life insurers’ NBAPE fell by 19.8% to P46.2 billion last year from P57.6 billion in 2019.
“The industry grappled with the on-and-off quarantine and lock-down measures, and the fact that we were unable to continuously offer insurance agents’ examinations greatly hampered the production of insurance companies,” Mr. Funa said.
The regulator said NBAPE is computed by adding the value of first year premiums from products newly sold in a certain year and 10% of single premiums written.
The regulator said it is expecting that the pandemic’s impact on the industry last year to taper off this year, especially once the government’s mass vaccination program gains traction in the second half.
“It will be interesting to see the impact of the shift from face-to-face selling to remote selling via videoconferencing technologies in the sale of insurance products, which was already institutionalized in the Circular Letters issued by the IC,” Mr. Funa said.
“Also, we also hope to see the impact of the increased awareness of the importance of having life insurance as a way to provide security and peace of mind amid the threats of the COVID-19 pandemic to the lives and health of the Filipino people,” he added. — BML
