THE INSURANCE INDUSTRY’S premium income declined in the first half as the uptake of single premium variable products decreased, the Insurance Commission (IC) reported yesterday.
IC said the industry’s overall premium income went down 2.64% to P141.91 billion in the first six months, lower than the P145.76 billion logged a year ago, based on the unaudited quarterly reports submitted by life and non-life insurance firms and mutual benefit associations (MBA).
“The decrease in the total premium of the insurance industry can be attributed to the decrease in the uptake of single premium variable products due to global market uncertainty and economic slowdown,” Insurance Commissioner Dennis B. Funa was quoted as saying in a statement.
Single premium sales dropped 52.5% to P20.54 billion in the first semester from the P43.24 billion posted in the same period last year.
Meanwhile, premiums collected from traditional life products grew 12.55% to P31.17 billion from the P27.69 billion a year ago, the IC reported.
“A remarkable increase of 94.97% should also be noted in single premium policies of traditional life insurance from P1.1 billion in Q2 2018 to P2.2 billion in the same quarter in 2019,” Mr. Funa said.
Meanwhile, first-year and renewal premiums for variable life products increased year-on-year by 11.67% and 32.94%, respectively, while the “significant” drop in single premiums dragged the overall sale of variable life insurance products.
The non-life insurance sector’s net premiums, meanwhile, climbed 12.98% year-on-year to P27.61 billion from P24.44 billion from a year ago. Of this total, motor car insurance contributed around 49.47% or the majority of total net premiums.
Likewise, premium income of the MBA sector grew to P5.88 billion as of June, 13.54% higher from the P5.18 billion booked from the same period in 2018.
Overall, the industry’s total assets stood at P1.72 trillion in the first half, 11.79% higher than the P1.54 trillion posted a year ago.
Mr. Funa said bulk of industry’s assets or 88.37% worth P1.52 trillion were held in income-generating investments.
“As of end of the first half of this year, the three sectors of the insurance industry registered positive growth in terms of assets,” he said.
The sector’s total investment portfolio also grew 19.59% in the first semester to P1.52 trillion from P1.27 trillion a year ago.
By sector, total investments of life insurers stood at P1.33 trillion, P107.91 billion for non-life firms, while the MBA sector had P85.25 billion.
“Government securities maintained their attractiveness to both life and non-life sectors,” Mr. Funa said.
Such instruments comprised 36.21% or P480.93 billion of the life insurance sector’s total investments, 32.82% or P35.42 billion of non-life sector’s and 32.84% or P28 billion for the MBA sector. — B.M. Laforga