The insurance industry posted robust expansion in terms of net income and total gross premiums in the past five years under the Duterte administration, Insurance Commissioner Dennis Funa said Wednesday.
Funa said in a report to Finance Secretary Carlos Dominguez III the industry’s total gross premiums surged 64.3 percent from P169.6 billion in the third quarter of 2016 to P278.7 billion in the same period in 2021.
He said total net income jumped 64.1 percent from P22.85 billion by end-September 2016 to P37.5 billion in the same period last year. He said this was “another indicator of the insurance sector’s continuous and steady expansion under the Duterte presidency.”
Funa said the insurance industry’s contribution to the economy could be seen in the last four years. From 1.64 percent of the gross domestic product in 2017, the industry’s contribution to the economy grew to 2.03 percent as of the third quarter of 2021.
“We will see that the highest-ever penetration rate was achieved at the end of 2020, and we see bright figures for 2021. I believe that the highest-ever penetration rate will even be surpassed in 2021,” Funa said in the report.
The insurance density or the average amount spent by every Filipino for insurance reached P2,528 as of the third quarter of 2021, up from P1,768 in the same period in 2017.
Funa said that “for 2021, I see a record insurance density figure, especially with people becoming more conscious of the benefits of insurance, especially after the peak of the COVID pandemic in 2020.”
Dominguez said the pandemic brought to people’s attention “the risks in life and the realization that livelihoods could be wiped out in a flash.”
Funa said the industry saw a slight dip in both premiums earned and net income generated in 2020, the year when the outbreak of the coronavirus pandemic hobbled, if not shut down most economies across the globe.
Gross premiums earned by the industry fell from P224.98 billion in 2019 to P216.51 billion in 2020, while net income dropped from P31.74 billion in 2019 to P28.62 billion in 2020, Funa said.
Funa said that while the total assets of the insurance industry grew 8.11 percent in 2020 and total investments increased 6.97 percent, its total net worth and the total net income dropped in that year.
“The net worth of the industry decreased by 3.88 percent and the total net income decreased by 8.6 percent. This is due primarily to the life insurance sector, which was impacted more by the COVID pandemic,” he said.
Funa said 22 of 31 life insurance companies registered a net investment loss ranging from P238,000 to P1.5 billion, while 20 of 31 life insurance companies suffered a decrease in their 2020 net income.
“However, in spite of all these, our third-quarter figures for last year show a strong rebound,” he said.
Funa said the insurance industry’s total investments were not affected by the economic shock triggered by the pandemic as seen from its 56.3-percent growth from P1.14 trillion in the third quarter of 2016 to P1.78 trillion in the same period last year.
Funa said the industry recorded P2.01 trillion in assets as of the third quarter of 2021, up by 52.4 percent from P1.32 trillion in the same period in 2016.