MANILA, Philippines - The Philippine Insurers and Reinsurers Association (PIRA) has reported that fire and allied perils premiums for buildings, which include typhoon and flood, grew to P18.5 billion, an increase of five percent from the previous year.
“This is attributed to the increased awareness of insurance among property owners after the historic flooding caused by tropical storm Ondoy,” PIRA said.
Premiums for motor vehicle insurance rose to P13.5 billion in 2010, up 11.4 percent in 2009.
Last year, combined losses were placed at P10.115 billion, lower by 6.36 percent from 2009. The combined loss ratio, which is the percentage of losses as compared to the premiums, was an acceptable 44.16 percent.
Losses for fire and allied perils in 2010 amounted to close to P2.2 billion, about P1.2 billion less than the losses in 2009.
The higher premiums and lower losses translated to a net income of P3.6 billion for the entire non-life insurance industry, 63 percent higher than its combined net income for 2009.
Comparing the 2010 figures with those of 2008 – when the industry posted a net income of P3.35 billion – the non-life insurance industry still posted a growth rate of 7.5 percent.
But the top 10 non-life insurers continue to dominate as it accounted for more than half of the total premiums of P20.7 billion recorded last year. Premiums amounted to P19.3 billion in 2009.
The top 10 players reported a combined premium income of almost P13 billion. There are 87 players in the country’s non-life insurance industry.
The next 10 non-life firms accounted for premiums worth P3.2 billion.
In terms of net premiums written, the industry reported premiums worth P21.7 billion in 2010, or a 12.4-percent expansion from the P19.3 billion in 2009.
In terms of net income including capital gains, the top 10 accounted for a combined value of over P5 billion last year. In the same year, 12 of the total 87 reported net losses.
Meanwhile, the industry is facing challenging times with the government’s steep capitalization requirement and the ever-changing global climate that is raising the natural risks for buildings and cars.
For capitalization, PIRA members just hurdled the P125-million minimum paid-up capital requirement and many are now raising additional resources to meet the yearly increase mandated by the Department of Finance (DoF).
The DoF requires all insurance companies to have at least P500 million in paid-up capital by 2015 when the entire Association of Southeast Asian Nations (ASEAN) turns into an ASEAN Free Trade Area (AFTA). The AFTA opens the Philippine insurance market to companies from other players from the Southeast Asian countries. – Ted Torres