The Philippines’ insurance industry back on top

The insurance industry in the Philippines is gearing up for a strong year, as total premium income rose by more than 40% year-on-year (y-o-y) in the second quarter. The sector is expected to return to 2013’s record highs after a moderate decline last year, and foreign interest remains strong, with half a dozen firms vying to establish bancassurance channels via Philippine National Bank (PNB).

Total premiums were up 42% y-o-y in the first six months of the year at P116.1bn ($2.5bn), according to the sector regulator, the Insurance Commission (IC), while total assets grew 12.8% to reach P1.07trn ($22.9bn), and investments rose by 17.2% to P929.9bn ($19.9bn).

Strong start

Despite a slight deceleration in the first three months of the year, broader economic growth remains robust at over 5%, with industry revenues and assets also showing strong expansion to date, particularly in the life insurance segment.

Total life premiums rose by 49.5% y-o-y to P98.8bn ($2.1bn) in the first half of the year, while assets and investments increased by 15.5% and 19.1%, respectively.

Most life insurers recorded double-digit growth in premiums in the first quarter, according to recent data from the IC, though BPI-Philam Life Assurance – a joint venture between Bank of the Philippine Islands and Philam Life – posted the strongest results, with a 135.3% y-o-y increase in premiums to P5.9bn ($126.4m). This was followed by Insular Life Assurance (133.6%), Manulife Chinabank Life Assurance (117.9%), Sun Life Grepa Financial (86.7%), Philippine AXA Life Insurance (61.7%) and SLCP (35.9%).

Meanwhile, the non-life segment recorded more modest growth in the second quarter, with gross written premiums rising 7.4% y-o-y to P32.7bn ($700.4m), though net income growth exceeded that of the life segment, up 40.4% at P1.8bn ($38.8m).

Acceleration ahead

The latter half of the year could see even stronger growth, according to Riza Mantaring, president and CEO of Sun Life of Canada Philippines (SLCP). Speaking to local media in late July, Mantaring credited an increase in investment opportunities in the sector, ample liquidity and a solid macroeconomic environment as key growth drivers. “If the first quarter is any indicator, this will probably [be] a record year for life insurance,” she said, emphasising the cyclical nature of the industry, which is prone to posting stronger growth in the second half of the year.

Emmanuel Dooc, commissioner of the IC, told local media in July that the quarterly results put the industry on track to surpass the record premiums witnessed in 2013, to reach an all-time high of close to PB250bn ($5.4bn). Total industry premiums reached P198.13bn ($4.28bn) that year, before falling 4.63% in 2014.

Changing the channel

A greater diversity of delivery channels is expected to spur further industry expansion, with a raft of foreign players looking to round out their offering with bancassurance products.

Several foreign financial institutions have expressed interest in forming a joint venture or alliance with PNB, local media reported in August, including Taiwan’s Fubon Life, South Korea’s Samsung Life, Germany’s Allianz and Switzerland’s Zurich Life.

With the regulations on bancassurance recently tightened by the IC in May, PNB is an attractive target for foreign firms looking to enter the market. “It is the only bank of significant size and financial stability that will make sense for a foreign player to join forces,” Dooc told local media in August. The bank’s existing bancassurance partner, PNB Life Insurance, will reportedly be involved in the entrance of any new foreign player.

Many industry heavy-hitters have already paired with local commercial banks, including BPI-Philam, Italy’s Generali, France’s AXA, Canada’s Sun Life Financial and Manulife Financial. Together, they account for more than 80% of industry-wide premium income and consistently post stronger growth rates than stand-alone insurers, according to local press reports.

Oxford Business Group is now on Instagram. Follow us here for news and stunning imagery from the more than 30 markets we cover.

Covid-19 Economic Impact Assessments

Stay updated on how some of the world’s most promising markets are being affected by the Covid-19 pandemic, and what actions governments and private businesses are taking to mitigate challenges and ensure their long-term growth story continues.

Register now and also receive a complimentary 2-month licence to the OBG Research Terminal.

Register Here×

Product successfully added to shopping cart

Read Next:

In Philippines

The Philippines: IT outsourcing earmarked for growth

Although India has long dominated information technology outsourcing (ITO), the Philippines is fast making up ground by carving itself a place as an alternative destination for offshore IT service...

In Financial Services

Emerging markets lead uptake of cryptocurrency despite bear market

Despite global financial headwinds and significant declines in the value of cryptocurrencies this year, emerging markets are adopting the technology at a rapid pace.


Which markets are pioneering lower-carbon desalination technologies?

Long seen as a high-cost, energy-intensive process, desalination mega-projects are seeking to tap renewable resources to limit the cost and environmental concerns of this crucial technology.