The nonlife insurance industry has registered a net income of P2.4 billion in 2014, or a 192-percent increase from its net income in 2013.
Philippine Insurers and Reinsurers Association Chairman Michael Rellosa said the fact that there were fewer and less destructive natural calamities in 2014 was a big factor in the increase in net income of the nonlife insurance industry last year.
“Thankfully, our country did not have as many natural calamities in 2014 as compared to 2013 when we were hit by Supertyphoon Yolanda [international code name Haiyan],” Rellosa said at the 12th Philippine Non-Life Insurance Summit last week.
As a result, the nonlife insurance industry’s losses from claims totalled only P12.8 billion in 2014, or almost a billion pesos less than the losses sustained in 2013.
“This automatically raised our industry’s net income to P2.4 billion, or an impressive 192-percent increase from the measly P822 million we logged in 2013,” Rellosa said.
Rellosa added that although industry players are getting fewer in number, the collection of premiums on insurance policies has steadily gone up. There were 95 nonlife insurance companies in 2005, and that number is now down to 65 due to the steep capitalization requirements for existing and new insurance companies as provided for in the amended Insurance Code.
The capitalization requirement for existing insurance companies was increased to P250 million, which will go up by January 2016 to P550 million. New insurance companies are required to put up at least P1 billion in capitalization. These higher capitalization requirements are meant to encourage mergers and consolidation to allow the insurance industry to compete better amid the impending Asean economic integration.
In 2014 gross premiums written reached P64.3 billion, or an almost 18-percent increase from the gross premiums written in 2013, which was only P54.5 billion.
He said that while these figures show the big opportunities in the nonlife insurance industry, there are expected challenges in the near future that the nonlife insurance industry should be prepared for.
“By 2030 experts predict that Asia—with the growth it is experiencing right now—would account for two-thirds of the world’s economic output. This means greater opportunity for all of us. And this also means greater competition as Western insurers are obviously aware of these predictions. These so-called Big Boys are definitely training their sights to Asia—including the Philippines—as we speak,” Rellosa said.