Life insurance premium income up by almost 6%

THE Insurance Commission on Tuesday reported that the full year premium income of the life insurance industry gained 5.9 percent to P247.72 billion last year from P233.92 billion in 2019.

Insurance Commissioner Dennis Funa, in a statement, said the variable life insurance premiums saw a 7.7-percent year-on-year growth to P183.24 billion from P170.13 billion, with single premiums and renewal premiums gaining 19.72 percent and 13.58 percent, respectively.

The premiums earned by traditional life policies also inched up by 1.1 percent last year to P64.48 billion from P63.78 billion a year ago as renewal premiums were up 13.72 percent year-on-year.

“It has been observed by the financial sector leaders that generally the savings of the middle-class sector grew due to restraints in consumer spending because of the pandemic,” Funa said.

The industry’s aggregate paid-up capital also increased by 7.67 percent to P25.28 billion in 2020 from P23.48 billion in 2019.

Meanwhile, the commission also cited the negative impacts of the coronavirus disease 2019 (Covid-19) pandemic to the industry, which includes the 10-percent contraction of aggregate benefits paid to P69.36 billion from P77.11 billion year-on-year.

“It is highly likely that this contraction is due to the various difficulties encountered in the processing, filing and pay-out of claims as an effect of certain community quarantine restrictions imposed by the national government to curb the spread of Covid-19,” the commissioner explained.

Total new business annual premium equivalent was also down by 19.8 percent by the end of last year to P46.16 billion from P57.56 billion in the previous year on the back of restrictions on face-to-face selling of insurance products amid the lockdowns.

“The industry grappled with the on-and-off quarantine and lockdown measures, and the fact that we were unable to continuously offer insurance agents’ examinations greatly hampered the production of insurance companies,” Funa added.