KUALA LUMPUR, March 10 -- Global credit rating agency, AM Best maintains a stable market segment outlook for the Philippine non-life insurance segment, citing signs of recovery in 2021 regarding premium growth and improved investment conditions.
In its new Best’s Market Segment Report, ‘Market Segment Outlook: Philippines Non-Life Insurance’, AM Best also notes the strong growth experienced in microinsurance, improving the affordability of insurance products and insurance penetration, as underpinning the stable outlook.
As of September 2021, gross and net premiums written by Philippine non-life insurers for the nine-month period had increased by 11.9 per cent and 7.6 per cent, respectively, to PHP 64.3 billion (US$1.2 billion) and PHP 38.1 billion (US$0.7 billion), compared with the same period in the previous year. (US$1 = RM4.183)
In addition, the government’s ‘Build Build Build’ programme, which consists of more than 20,000 infrastructure projects nationwide, has resumed and is expected to drive the Philippine economic recovery. It is also likely to act as a catalyst to the long term growth of the property, construction and engineering insurance segments.
According to a statement, there is still some uncertainty surrounding the pandemic, which will remain a challenge for Philippine non-life insurers. Nevertheless, non-life insurers have made progress in adapting to the current environment by bolstering their infrastructure and enhancing digital capabilities to be able to operate in a remote manner.
Additionally, according to the report, as part of pandemic-fuelled fiscal stimulus measures in the Philippines, the country maintain a historically low interest rate, which constrained insurers’ investment results.
However, interest rates are expected to rise in the coming year, and unrealised losses from the rising bond yields could impact insurers’ economic capital, depending on the companies’ asset-liability matching positions.
United States-headquartered AM Best notes that investment assets are highly concentrated in local currency fixed income and term deposits, and rate increases over a longer period could increase investment incomes generated from interest payments, with a positive effect on the profitability of the Philippine non-life insurers.
The Philippines are one of the most-exposed countries to natural catastrophes, and the non-life segment faces another year of high exposure to catastrophe events.
For more information, visit www.ambest.com.
-- BERNAMA
No comments:
Post a Comment