The Philippine insurance industry saw robust growth under the Duterte administration, with total gross premiums rising 64.3 percent from PHP169.6 billion in the third quarter of 2016 to PHP278.7 billion in the same period in 2021, according to data from the Insurance Commission (IC).
IC Commissioner Dennis Funa said the industry’s total net income increased 64.1 percent from PHP22.85 billion by end-September 2016 to PHP37.5 billion in the same period last year, another indicator of the insurance sector’s continuous and steady expansion under the Duterte presidency.
As for the insurance industry’s contribution to the economy, Funa said the continued improvement can be seen in the last four years.
From 1.64 percent of the gross domestic product (GDP) in 2017, he said the industry’s contribution to the economy grew to 2.03 percent as of the third quarter of last year.
“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 his report to Finance Secretary Carlos Dominguez III.
The insurance density or the average amount spent by every Filipino for insurance is at PHP2,528 as of the third quarter of 2021, up from PHP1,768 in the same period in 2017, he added.
For 2021, Funa said he sees a record insurance density figure as people become more conscious of the benefits of insurance, especially after the peak of the coronavirus disease 2019 (Covid-19) pandemic in 2020.
“This pandemic has just brought to people’s attention the risks in life and the realization that livelihoods can be wiped out in a flash,” Dominguez said.
Dominguez thanked Funa and the IC’s three deputy commissioners – Erickson Balmes, Ferdinand George Florendo, and Randy Escolango – for guiding the insurance industry towards the path of rapid growth under the Duterte administration.
“We have made progress under this administration and under your leadership,” Dominguez told Funa.
Funa said the industry only 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 PHP224.98 billion in 2019 to PHP216.51 billion in 2020, while net income dropped from PHP31.74 billion in 2019 to PHP28.62 billion in 2020, he 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 during 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 added.
Funa said 22 out of 31 life insurance companies registered a net investment loss ranging from PHP238,000 to PHP1.5 billion, while 20 out 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 PHP1.14 trillion in the third quarter of 2016 to PHP1.78 trillion in the same period last year.
The industry’s total investments only fell slightly from PHP1.58 trillion in 2019 to PHP1.56 trillion in 2020, he said.
In terms of total assets, Funa said the industry recorded PHP2.01 trillion in assets as of the third quarter of 2021, up by 52.4 percent from PHP1.32 trillion in the same period in 2016.