Insurance sector bullish on growth

MANILA, Philippines — The domestic insurance industry likely sustained its growth momentum in the first half despite a high inflation environment, according to the Insurance Commission (IC).

In an interview, Insurance Commissioner Dennis Funa is optimistic the insurance industry would grow by a double-digit rate in the first half after a strong performance in the first three months.

“We are hoping, but of course the first quarter was very good. There is no indication that the second quarter will not be good,” Funa told reporters.

According to the IC chief, the insurance industry has remained strong against headwinds, such as inflation.

“I’ve been asking around if they (the insurance companies) are effected by inflation but apparently not,” he said.

Funa said there was not much impact particularly on the non-life insurance sector as most products, such as motor vehicle insurance products, are mandatory.

He said there was no adverse impact seen on the life insurance sector, as well.

In a separate interview, AXA Philippines president and chief executive officer Rahul Hora said while inflation created an upward pressure on the prices of goods, customers now have higher disposable income due to the Tax Reform for Acceleration and Inclusion (TRAIN) law.

“Yes, inflation is higher but also we’re happy that the TRAIN law has created more funds available to the customers. So I think overall, when people are more affluent, they would definitely want to insure themselves and their families,” he said.

According to data from the IC, the insurance industry’s premium income in the first quarter increased by 34.38 percent to P76.64 billion from P57.04 billion in the same period last year.

The life insurance sector, for its part, collected P61.79 billion in premiums as of end-March, up by 40.18 percent from the P44.08 billion recorded in the same period in 2017. Premiums collected by the non-life insurance sector likewise rose by 13.29 percent to P12.34 billion from P10.89 billion a year ago.

The whole industry also posted a net income of P8.03 billion in the first three months, 26.72 percent up from P6.34 billion last year.

As of end-March, the net income of the life insurance sector rose by 31.16 percent to P6.31 billion from P4.81 billion in the same period in 2017. On the other hand, non-life insurance sector’s net income as of end-March declined by 19.21 percent to P469 million from P580 a year ago.