Micro Insurance Philippines | Increase in Insurers and MBA’s Total Assets, Net Worth, Benefits Paid in Q1 2022 | Total Assets, Total Benefits Paid, and Total Net Worth all increased from the previous year, according to data collected from unaudited Quarterly Reports on Selected Financial Statistics (“QRSFS”) submitted by life and non-life insurance companies and mutual benefit associations (“MBAs”) as of the quarter ending 31 March 2022 (“Q1 2022”).
According to the Q1 2022 QRSFS, Total Assets of life and non-life insurers and MBAs climbed by 12.21% year-on-year, while Total Net Worth and Total Benefits Paid increased by 24.27% and 19.48%, respectively.
The combined assets of those three (3) industries increased from ₱1.89 trillion as of the first quarter of 2021, to ₱2.12 trillion as of the first quarter of 2022. Total Net Worth also rose during this time, from ₱315.86 billion to ₱392.51 billion year-over-year. Total Benefits Paid throughout the three industries had a significant increase from Q1 2021’s ₱27.88 billion to Q1 2022’s ₱33.32 billion.
Investments made by MBAs and insurance companies both did extremely well. Total Invested Assets increased by 9.94% year over year, going from ₱1.67 trillion in the first quarter of 2021 to ₱1.84 trillion in the first quarter of 2022. Additionally, the Total Paid-Up Capital and Guaranty Fund of the aforementioned businesses grew by 9.75% year-on-year, going from ₱69.15 billion in Q1 2021 to ₱75.90 billion in Q1 2022.
One hundred twenty-nine (129) of the one hundred thirty-five (135) licensed insurers and MBAs as of Q1 2022 contributed data. These data show, as observed by Commissioner Funa, that “Life and non-life insurers and MBAs are steadily recovering from the adverse economic effects of the pandemic, as evidenced by these numbers for Q1 2022. Moreover, the year-on-year increase in Total Benefits Paid during the same quarter highlighted the continuing commitment and responsiveness of our insurers and MBAs to the needs of the insuring public despite the challenges posed by the pandemic,”
Life Insurance Sector
From Q1 2021 to Q1 2022, the life insurance industry’s assets increased by 10.94% (₱163.2 billion) to ₱1.65 trillion. This is a significant increase from the previous year’s assets of ₱1,49 trillion. This is attributable to Segregated Fund Assets which grew by 22.37%, making up 55.05% of the industry’s Total Assets.
Total life insurance liabilities also increased by 7.77% in the first quarter of 2022. In addition, within the same time frame, the total net worth of the life insurance industry increased by an impressive 37.26%. The Reserve Accounts contributed the most to the growth, rising by 130.71% from Q1 2021 levels.
Total Paid-up Capital in the life insurance industry rose from ₱25.8 billion in Q1 2021 to ₱26.6 billion in Q1 2022, a growth rate of 2.74%.
Total Invested Assets in the life insurance industry rose from ₱1.44 trillion in Q1 2021 to ₱1.59 trillion in Q1 2022, a gain of 10.19% or ₱146.60 billion. The growth was fueled by a 27.99% rise in the investments in Financial Assets at Fair Value through Profit or Loss (“FVPL”), recorded at 27.99%, and Investment Property, which is at 14.54%. The FVPL allocation accounted for 59.38% of the total investments made by life insurance, while the allocation for investments Available for Sale (“AFS”) accounted for 31.58%.
Total Premium Income from the life insurance industry was ₱78.61 billion in Q1 2022, down from ₱83.20 billion in Q1 2021, a decrease of ₱4.58 billion (or 5.51%). Both conventional life insurance and variable life insurance saw decreases in Single Premiums of 19.78% and 19.86%, respectively. The first quarter of 2022 had a decline of 9.80% from the first quarter of 2021 in premiums from variable life insurance plans, which accounted for 75.17% of Total Premium Income. Meanwhile, the premiums paid for traditional life insurance rose from ₱17.68 billion in Q1 2021 to ₱19.52 billion in Q1 2022, a 10.38% rise. The New Business Annual Premium Equivalent (“NBAPE”) also went down by 1.21%.
As of Q1 2022, the life insurance industry’s Total Net Income fell by 20.85% QOQ, equaling ₱1.96 billion. The primary reasons for this were the 5.51% drop in Total Premium Income and the 27.18% spike in Benefit Payments.
During the first three months of 2022, the life insurance industry saw annual growth of 7.60% in the number of policies in force and 11.08% in the number of estimated insured lives.
Non-Life Insurance Sector
As of Q1 2022, the total assets of the non-life insurance industry had increased by 21.31%, from ₱283.12 billion to ₱343.46 billion, quarter over quarter, with the top ten (10) non-life insurance firms accounting for 56.42% of the total assets. Additionally, Total Liabilities rose from Q1 2021’s ₱175.34 billion to ₱222.37 billion, a 26.83% year-over-year rise. Net worth as a whole was ₱121.09 billion in Q1 2022, up from ₱107.78 billion in Q1 2021, a growth rate of 12.35%.
Total Invested Assets in the non-life insurance industry rose by 9.16% in Q1 2022, from ₱127.23 billion in Q1 2021 to ₱138.89 billion. Value increases in time deposits, government debt instruments (bonds), stock, real estate, unit investment trust fund, and other investments (84.72% of Total Invested Assets) are primarily responsible for this trend.
Q1 2022 further saw a 15.45% growth in Net Premiums Written (NPW) to ₱15.59 billion from Q1 2021’s ₱13.51 billion. Sales in the Fire Insurance segment increased dramatically during Q1 2022, jumping from ₱2.45 billion in Q1 2021 to ₱3.63 billion. The Motor Car line of business (which accounts for the largest percentage–41.32% of the sector’s Total NPW per line of business) raised the sector’s NPW to ₱6.44 billion this year from ₱6.14 billion in Q1 2021. The Aviation division is slowly bouncing back, with Q1 2022 revenue increase from a negative (-)₱74.10 million in Q1 2021 to ₱7.70 million in Q1 2022, an increase of 110.38%. Almost all industries grew in Q1 2022, with the exception of Health and Passenger Personal Accident Insurance (“PPAI”). The Health Insurance line’s drop from Q1 2021’s ₱1.10 billion to Q1 2022’s ₱0.61 billion can be due to one (1) company which reported a 56.59% decline.
The total net income of non-life insurers fell to ₱1.07 billion in the first quarter of 2022, down from ₱1.19 billion in the same period the previous year. In Q1 2022, sixteen (16) non-life insurers reported losses of ₱0.42 billion, which dragged down the sector’s Total Net Income.
Mutual Benefit Associations
Total assets held by MBAs were at ₱125.66 billion in Q1 2022, up from ₱118.18 billion in Q1 2021, a growth of 6.33%. Notably, only four (4) MBAs account for 80% of the MBA industry’s Total Assets.
In Q1 2022, the MBA sector’s Total Invested Assets totaled ₱111.85 billion, up 7.42% from Q1 2021 numbers, and accounted for 89% of MBAs’ Total Assets. Long-term investments held by MBAs as of the first quarter of 2021 were ₱49.27 billion, while loans held by MBAs totaled ₱34.08 billion, both representing increases of 12.05% and 2.80%, respectively, year over year.
From Q1 2021 to Q1 2022, MBA Total Liabilities rose from ₱70.63 billion to ₱74.58 billion, an increase of 5.58%. Because their Optional Benefit Reserve, which accounts for 32.69% of the industry as a whole, increased from ₱22.15 billion to ₱24.38 billion between fiscal years.
The total fund balance of MBAs rose from ₱47.54 billion in Q1 2021 to ₱51.08 billion in Q1 2022, a year-over-year rise of 7.43%.
In Q1 2022, MBAs collected a total of ₱3.28 billion in Total Premium Income from member contributions. 74% of the MBA market’s total premium income came from only two (2) companies.
The Aggregate Net Surplus of MBAs increased by 13% between Q1 2021 and Q1 2022, going from ₱1.23 billion to ₱1.39 billion. The increase in Contributions from Members (18.53%), the rise in Net Returns on Investment (4.57%), and the fall in Benefit Expense (20.70%) are all to thank for this positive year-over-year performance.