MANILA, Philippines - The Insurance Commission (IC) sees the Philippine insurance industry booking a record premium income this year as it recovers from a major slump last year.
IC Commissioner Emmanuel Dooc said the industry is seen booking a 28 percent jump in record premium income to P240 billion this year after registering a five percent decline to P188 billion last year from the previous record level of P198.1 billion in 2013.
“Taking into account the industry’s consistent performance during the first three quarters, our target is achievable,” Dooc said.
The combined premium production of life and non-life insurers surged 29.7 percent to P172.4 billion from January to September this year compared to P132.8 billion in the same period last year.
Traditionally, premiums in the second semester do better than the first six months of the year.
“The year 2015 promises to be the best year ever for the insurance industry in the Philippines,” Dooc added.
Philippine Life Insurance Association president Rizalina Mantaring not only shares the commissioners’ optimism for the life sector, where majority of the premiums are generated.
Mantaring, who is also chief executive of Sun Life Financial Philippines, believes the life insurance sector is not only on-track to outperform last year’s premium income, but in fact, register a new record. And even do better in 2016.
Premium income from the life sector surged 33.2 percent to P145.5 billion in the first nine months of the year from P109.25 billion in the same period last year.
The industry’s premium income slipped seven percent to P158.7 billion last year from a record level of P171.1 billion in 2013.
Also working in favor of a record year in 2015, is the entry of new players as well as the impact these have on the overall performance of the industry.
FWD Life Philippines forged a bancassurance agreement with the Security Banking Corp. late last year. The insurance arm of the Pacific Century Group is on track to hit over P2 billion at the end of September this year.
Ageas Insurance International formed a joint venture bancassurance company with East West Banking Corp.
The IC admitted that major financial institutions from Japan, Korea, Taiwan, and Europe, have sought government’s assistance to locate prospective acquisitions or partners.
Mantaring said the new entrants have the option of acquiring an existing player or buying a license.
“If you get a fresh license, everything is clean although expensive (at least P1 billion). If you buy an existing company, you have to think about what value does the company gives you – do they have the distribution network, do they have existing client base, are there hidden liabilities?” she said.
Meanwhile, AXA Philippines took one step more by acquiring Charter Ping An, the non-life insurance company of GT Capital.
AXA Philippines is already the second leading life insurer while Charter Ping An ranked fourth among the 62-strong non-life industry.
BDO Life, on the other hand, will take center stage in its bancassurance activities as it ends its 15-year partnership with Generali Pilipinas Life Assurance.
Generali will continue its life insurance activities but it is reportedly mulling returning to the non-life sector.