The Insurance Commission expects the number of nonlife insurance companies operating in the Philippines to drop due to the higher capital requirement for the industry.
“We have 63 nonlife companies as of end of 2016. I foresee that it will go down to 55 because four will close down, and eight will be merging together,” Insurance Commissioner Dennis Funa said.
The regulator has required insurers to have a paidup capital of P550 million by the end of 2016.
“Of the four who have signified that they will close, three are still in the process of finalizing. So it will not be proper for me to mention that at this stage. But at least one is 100 percent sure, and this is Manila Surety and Fidelity Co,” Funa said.
Meanwhile, eight nonlife insurance companies are in merger talks, he said.
“In the life sector, at least there is one that we are still awaiting if that life company will bring in a new investor. If that life company can bring in a new, then practically all life insurance companies will be compliant,” he said.
In terms of compliance in paidup capital, Funa noted 26 life insurance companies and 47 nonlife insurance companies reported a net worth of P550 million and above.
“Note that the verification of compliance by the life and nonlife sectors with P550 million requirement will be determined based on 2016 annual statements of insurance companies which are due to be submitted to this office on April 30, 2017,” he said.
Last year, the insurance industry recorded a flat growth of 0.29 percent in terms of total premium income, with the life insurers posting a decline while nonlife companies posted a significant expansion.
IC data placed the industry’s total premium income at P231.9 billion in 2016, up marginally by 0.29 percent from P231.2 billion a year earlier.
The life insurance sector’s net premium income totaled P182.8 billion, down 3.04 percent. The nonlife sector posted a 16.24-percent gain in 2016, up P41.6 billion in net premium written compared with P35.8 billion in 2015.