RECORD-BREAKING YEAR FOR INSURERS
Filipinos continue to embrace the idea of having insurance coverage, continuing a trend which sees an increasing number of insured individuals over the years. More than 60 million Filipinos have insurance protection, in one form or another, as of the end of 2018. That’s a significant increase from the same period of the prior year (when 48 million lives were covered by insurance).
The country’s insurers had a very good year, posting record-breaking premium growth and penetration rates. All sectors of the insurance industry—life insurance, non-life insurance and mutual benefit organizations (MBAs), registered positive growth in terms of premiums collected.
The Insurance Commission (IC), which regulates the insurance, pre-need and health maintenance organizations industries, pushed the boundaries in 2018, allowing major breakthroughs and notable achievements in all sectors.
Last year, the Commission recorded its highest penetration rate in five years at 1.76%. As of the third quarter of 2018, total premium income has increased by 18%, amounting to a total of P218.91 billion (from P185.51 billion recorded the same period in the prior year).
Insurance Industry
The life insurance sector reported a P174.15 billion in total premiums which account for 79.55% of the premiums collected by the industry. Broken down, the life insurance sector collected P130.14 billion in premiums from variable life insurance products and P44.02 billion from traditional life insurance products.
Life insurance coverage pro- vided by private insurers likewise rose to 56.63% (as of end September 2018), up from 45.69% during the same period in the prior year.
Non-life insurance companies, on the other hand, posted P36.83 billion in premium collection. Mutual Benefit Associations reported P7.93 billion of total premiums as of December 2018.
The insurance density, defined as the ratio of premium to the total population, increased by 16.12% to P2,053.58 per capita. Insurance penetration, measured as the ratio of premiums to the country’s GDP, likewise increased by .12 percentage point to 1.76% as of end of the third quarter of 2018.
By the end of 2019, existing insurance companies are required to increase their respective net worth to P900 million (coming from the existing minimum of P550 million), as mandated by the Insurance Code. This guarantees that insurance companies will have enough funds to honor their commitments to their respective clients.
In the same period, the industry asset size grew by 17.42%. The value of the total industry assets has now reached P1.55 trillion. Significantly, the life sector grew its assets by 15.89% while the non-life sector by 22.71%.
Pre-Need Industry
Meanwhile, the pre-need industry increased its total premium income by 11.53% from P13.01 billion in 2017 to P14.51 billion in 2018.
Pre-need companies collected P14.51 billion in total contributions/premiums as of the third quarter of 2018. Total net income rose five fold from P362.9 million in 2017 to P1.70 billion (as of September 2018).
Consistent with the trend in the past reporting periods, motor car insurance business comprised more than half of the total net premiums written with 51.39%, followed by fire insurance business with 13%, and accident insurance business with 9.87% share.
The reported contribu- tions/premiums of MBAs increased to P7.93 billion, up by 21.20% from P6.54 billion compared to the previous year.
HMOIndustry
Similarly, the HMO industry reported significant growth with a total revenue of P20.91 billion.
Licensed HMOsin the country tallied P38.48 billion in total assets as of the third quarter of 2018. In terms of equity, the HMO industry reported a total equity of P6.17 billion (end of Q3 2018). Total revenue of P20.91 billion was reported for the HMO industry during the first half of 2018.
In 2018, two new HMO companies entered the industry—Health Care & Development Corporation of the Philippines and Ultima Health Systems, lnc.. This brings to 31 the total number of HMOs in the country.
The Commission also released the guidelines in the approval of HMO products and the Standard Contract Provisions. Through this issuance, HMO consumers will have an added layer of assurance that HMO products approved by the IC have passed the minimum requirements.
Insurance Commission secures ISO upgrade
In the past year, the Commission secured the latest International Organization for Standardization (lSO) certification for complying with international quality management system standards.
The transition is part of the agency’s commitment to provide quality regulatory service as its objective is to continually improve its quality management system. This upgrade also aims to expand its coverage to include the IC Davao District Office.
ISO 9001:2015 deals with quality management systems for organizations that need to demonstrate their ability to consistently provide products and services that meet customer and applicable statutory and regulatory requirements and aim to enhance customer satisfaction through the effective application of the system.
Notable achievements
The Commission issued 70 Circulars this year, breaking the average number of 25 Circulars issued a year.
The Insurance Commission was also active in taking part in important innovative government initiatives. When the country saw a rising demand for funding infrastructure due to the current administration’s Build, Build, Build project, a development framework was established by IC to encourage collaborative investments with insurance companies.
Ultimately, 2018 paved the way for IC to establish rules governing Online Insurance Aggregators that provide technological platform to buy and sell insurance.
As to the number of lost lives and properties in the country rise due to catastrophic natural disasters and critical illnesses and, coupled with new opportunities and challenges, the Insurance Commission shall continue to lead strategic change and remain to be dedicated in promoting the growth of the industries and protecting the welfare of the Filipino people.