Life insurance premiums hit P50 B in six months

MANILA, Philippines - The country’s life insurance industry has reported total premium income of P50 billion in the first six months of 2012.

That strengthened the forecast of the Insurance Commission (IC) that the industry is on track to hit the P100-billion mark this year.

In 2011, life insurers posted a record P85.6 billion in total premium income.

On the sidelines of the formal launching of the mobile microinsurance partnership between Smart Communications (Smart) and Beneficial Life Insurance (BenLife) last week, IC Commissioner Emmanuel L. Dooc said that the full year target was achievable with traditional life insurance products being complemented with stronger sales of microinsurance products.

The introduction of new protection products, variable or investment-laced life products, and the double-digit growth of policies sold through bancassurance are still the leading drivers for the strong growth of the industry.

The IC said that the aggressive behavior of the industry is spurred by the strong economic growth, as well as the increased competition between the top life insurance players, mostly foreign dominated.

 Aside from the contribution of the premium income coming from traditional protection products and the investment-laced variable or unit-linked products, the IC is looking at the microinsurance sector as increasing its share of the premium income pie.

Microinsurance products have been predominantly sold through mutual benefit associations (MBAs).

But in the past few years, life and non-life insurance companies have joined the bandwagon.

There are now over four million individuals in the Philippines covered by microinsurance, or protection that offers affordable premium rates focused on the previously un-served segment of the country’s population.

From 2007 to 2010, 10 life insurers alone generated total premiums of P1.9-billion while paying claims for death benefits recorded P920 million and P1 million in medical/health benefits.

General or non-life insurers in the same period collected P102 million in premiums while paying P12 million for fire losses, P38 million for death benefits, and P153,322 for medical/health.

But the bulk of the microinsurance premiums was earned by 14 MBA amounting to P4.2 million while death claims recorded P706 million and P5.2 million in medical/health.

The Asia Pacific region is the acknowledged leader in the development of the microinsurance industry.

Of the 500-million protected by the uncomplicated and inexpensive form of institutional protection end 2011, 400 million are domiciled in Asia.

According to a study by the International Labor Organization (ILO) and the Munich Re Foundation, the “microinsured” global population stood at 78 million in 2006 to the present 500 million.

“Asia is spearheading microinsurance development, in part because of large and dense populations, interest from public and private insurers, willing aggregators or distribution channels, and, perhaps most importantly, active government involvement, for example through subsidies,” the study added.

There are 50 million individuals covered by microinsurance in Latin America and another 24 million in Africa.