THE INSURANCE INDUSTRY’S total net income booked double-digit growth in 2019 buoyed by a spike in the life insurance sector’s net profit.
In a statement on Tuesday, Insurance Commissioner Dennis B. Funa said net income of the insurance industry jumped 20.38% to P45.12 billion last year from P37.48 billion in 2018.
Mr. Funa said the figures were based on the unaudited quarterly reports on selected financial statistics submitted by insurance firms.
He said the spike in overall net income was largely due to the increase in the life insurance sector’s net earnings which grew 25.76% to P36.13 billion last year from P28.73 billion in 2018.
However, net income of other sectors including nonlife firms and mutual benefit associations (MBAs) were not available as of writing.
“We learned from said reports that the significant growth of the life insurance industry’s net income, which was due to increases in premium income, commissions earned, and underwriting income, drove the overall increase of the net income of the entire insurance industry,” Mr. Funa was quoted as saying.
Broken down, the insurance industry’s total investments rose 20% to P1.59 trillion last year from the P1.33 trillion seen the year prior.
Total assets grew 13% year on year to P1.78 trillion in 2019 from P1.58 trillion in 2018, while its aggregate net worth hit P382 billion, also up 13% from P338 billion the prior year.
The industry’s total premiums collected likewise increased by around five percent to P304.64 billion from P290.15 billion the previous year.
Mr. Funa said all sectors recorded growth last year in terms of assets, net worth, investments and total premiums collected.
For the life insurance sector in particular, investments rose 20% year on year to P1.39 trillion from P1.16 trillion. Its “assets, net worth, premiums collected, and paid-up capital likewise grew,” according to Mr. Funa, but without citing exact figures.
The nonlife insurance sector’s total investments also spiked 31% to P117.5 billion in 2019 from P89.77 billion.
“This notable increase in the total investments of the nonlife insurance industry can be attributed to the 63% increase in equity securities investments, 16% increase in investments in government debt securities, and 33% increase in investments in debt securities from private sector, year on year,” Mr. Funa said.
The nonlife sector’s overall net worth also increased 19.2% year on year to P98.14 billion in 2019 from P82.33 billion, while its total assets, paid-up capital and net premiums written all “recorded positive growth,” according to the regulator.
Meanwhile, the MBA sector saw its total assets grow 15.02% to P101.06 billion from P87.86 billion in 2018, while total fund balance also increased 17.39% year on year to P41.45 billion.
“The MBA industry’s other performance indicators displayed an upward trend year on year, particularly its total guaranty fund, investments, contributions/premiums collected, and net surplus,” Mr. Funa said.
“These figures were obtained prior to the onset of the community quarantine due to the 2019 coronavirus disease pandemic. Nevertheless, we hope that the economic and financial impact of the pandemic in the succeeding reporting quarter will be softened by the measures adopted by the Commission through the various COVID-19-related Circular Letters that we have issued,” he said.
He added that insurance density, the amount of premium per capita, inched up 3.35% year on year. — Beatrice M. Laforga (BussinessWorld)