The income of the insurance industry fell 16 percent in the first quarter of the year following the money laundering controversy that rocked the Philippine banking industry in April, a top executive of the Insurance Commission said Wednesday.
Latest data from the IC showed that the industry’s performance lagged in the January-to-March period of 2016, with total premiums dropping 15 percent to P47.7 billion from P56.3 billion year-on-year.
“In Q1 there was a dip in the production…. the variable life production suffers. I think it’s also related to the issues affecting some banks, because some major players and producers are related to some banks which have undergone some problems and it affected the industry,” Insurance Commissioner Emmanuel Dooc said.
The life sector insurance declined 20 percent year-on-year to P38.6 billion.
The non-life sector, meanwhile, rose 11 percent to P9.1 billion.
“The life suffers loss in premium income, but the non-life I think posted growth,” Dooc said.
“But if you look at the cycle, normally, the first quarter in the past couple of years showed growth in the past. But the second or third dipped, and recovers again in later part of third quarter, and the final quarter is always positive,” Dooc added.
The industry’s total net income decreased 3.7 percent to P5.03 billion from P5.2 billion on year.
The life sector’s net income increased 3 percent year-on-year to P4.5 billion, while the combined profit of nonlife insurance firms slid 39 percent to P518.4 million.
The industry booked P1.2 trillion worth of assets in the January-to-March, up 9.6 percent from P1.1 trillion a year ago.
First-quarter liabilities stood at P949.9 billion, up 8.3 percent year-on-year.
Total investments of insurance companies increased 12 percent to exceed P1 trillion at the end of the first quarter.
Despite the negative growth in the first quarter, Dooc remains bullish about the industry.
“My target that I indicated is a low of P280 billion to a high of P300 billion. I think P280 billion is still achievable,” Dooc said.
“The political development will have a lot of influence or impact. We are seeing positive development after President Duterte assumed office. Even the business sector has been very buoyant, and they express support to the 10-point economic agenda,” he said.