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Annual Seminar on Regulatory Issues for Senior Officers of Insurance Regulatory Agencies Venue: Hotel ITC Kakatiya Sheraton, Hyderabad, India Date: 14th.

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Presentation on theme: "Annual Seminar on Regulatory Issues for Senior Officers of Insurance Regulatory Agencies Venue: Hotel ITC Kakatiya Sheraton, Hyderabad, India Date: 14th."— Presentation transcript:

1 Annual Seminar on Regulatory Issues for Senior Officers of Insurance Regulatory Agencies Venue: Hotel ITC Kakatiya Sheraton, Hyderabad, India Date: 14th - 16th November 2005

2 COUNTRY PRESENTATION FOR THE PHILIPPINES Mr. Antonio E. Enano Supervising Insurance Specialist Rating Division, Insurance Commission Rating Division, Insurance Commission IC Bldg., 1071 UN Avenue, Manila, Philippines IC Bldg., 1071 UN Avenue, Manila, Philippines

3 Republic of the Philippines A. BASIC DATA National Name : Republika ng Pilipinas Capital City : 2003 est.-- Manila, 13,790,900 (metro. area), 10,232,900 (city proper) Land Area : 115,830 sq mi (300,000 sq km) Archipelago comprising 7,107 islands Population : 2005-- 85.2 million - (growth rate: 1.8%); birth rate: 25.3/1000; infant mortality rate: 23.5/1000; life expectancy: 69.9; density per sq mi: 759 President : Gloria Macapagal Arroyo First term (2001- 2004); Elected in 2004 for a 6-yr. term no reelection

4 Monetary unit : Peso Convertion: $ 1 = P 54.69 ( Nov. 11, 2005) Languages : Filipino (based on Tagalog), English (both official); eight major dialects: Tagalog, Cebuano, Ilocano, Hiligaynon or Ilonggo, Bicol, Waray, Pampango, and Pangasinense Ethnicity/Race : Christian Malay 91.5%, Muslim Malay 4%, Chinese 1.5%, other 3% Religion : Roman Catholic 83%, Protestant 9%, Islam 5%, Buddhist and other 3% Literacy rate : 92.3% (2000)

5 Economic Summary : GDP/Constant 85 prices (2004 ) PESOS 318,560 million Real Growth Rate : 5.9% Inflation : 7.0%.(Sept. 2005) Labor force : 35.86 million; agriculture 36%, industry 16%, services 48% (2004 est.). Unemployment : 7.7%.(April 2005) Arable land : 19%. Agriculture: sugarcane, coconuts, rice, corn, bananas, cassavas, pineapples, fish, mangoes, pork, eggs, beef

6 NATIONAL INCOME (in million pesos) (in million pesos) (Source: NSCB) (Source: NSCB)GrowthRates2004 4th Qtr 2004 4th Qtr 2003 At Current Prices Gross National Product Gross National Product11.41,484,8091,315,048 Gross Domestic Product Gross Domestic Product11.51,389,8171,232,128 At Constant Prices (1985 prices) Gross National Product Gross National Product6.2342,537324,727 Gross Domestic Product Gross Domestic Product6.1318,560302,308

7 NATIONAL INCOME (in million)

8 NATIONAL INCOME (% g.r.) (Source:NSCB) FY2004FY2003FY2002 G N P (constant 85) G D P Net Factor Income from Abroad 8.518.95.1

9 NATIONAL INCOME (% growth)

10 By Industrial Origin FY2004FY2003FY2002 Agriculture5.13.93.3 Industry5.23.03.7 Services7.15.95.4 National Income


12 By Expenditure Shares FY2004FY2003FY2002 Personal Consumption Exp. Government Consumption 0.33-2.82.4 Capital Formation 9.54.8-3.5 Exports14.13.33.6 Imports5.910.34.7


14 Agricultural production 5.1 growth rate from 3.9 with govt. infrastructure, financial and technical support. Industry and services rose at 5.2 and 7.1 percent respectively, with support from domestic and foreign demand. Consumer spending strong due to the growth in rural incomes. Money remittances from overseas foreign workers grew 11 % and bolstered spending. Exports of goods and services expanded at 14 percent. Tourist arrivals 23.6 percent and reached 1.8 million in 2004. Call center 35,000 seats in 2004 employing 56,000 agents from 20,000 seats in 2003 Government supported micro, small and medium enterprises. Areas of Economic Growth in 2004

15 Areas of Concern - Fiscal position, although still weak, is improving. The 2004 national government fiscal deficit ended at P 186.1 billion. Unemployment shall be reduced to generate 10 million jobs the next 6 years. Low Foreign Investment - The government is also addressing the key bottlenecks to investment in the Philippines Lastly, the government is keen on addressing the problem of corruption

16 In Million Pesos GrowthFY2004FY2003 A. Life 3 % 41,413.1040,207.80 B. Non-Life 3 % 28,654.7427,793.89 Total Total 3 % 70,067.8468,001.69 Combined life and non-life premium INSURANCE INDUSTRY in 2004


18 Non-Life - Gross Premium Class – in million Pesos % Growth 20042003 Fire & Allied Perils 2.4011,054.4810,795.04 Marine & Aviation 2.063,441.953,372.53 Motor2.637,897.317,694.58 Others5.556,261.005,931.74 Total3.1028,654.7427,793.89

19 Gross Premium – Non-Life

20 Non-Life – NET PREMIUM Class – in million Pesos % GROWTH 20042003 Fire & Allied Perils 8.784,911.544,514.86 Marine & Aviation 1.061,613.251,596.34 Motor4.307,458.087,150.80 Others11.354,121.633,701.45 Total6.7318,104.5016,963.55

21 Net Premium – Non-Life

22 Non-Life - Net Incurred Claims Class – in million Pesos Loss Ratio 20042003 Fire & Allied Perils 46.441,522.751,197.52 Marine & Aviation 36.00515.41423.78 Motor105.817,149.033,928.55 Others42.821,287.321,129.97 Total72.3710,474.516,679.82

23 Net Incurred Claims – Non-Life (In-Million Pesos)

24 Net Income – Non-Life These sectors experienced: Income (in million pesos) % Increase 20042003 Underwriting gain /(loss) 4.154,849.44.656.0 Investment Income5.671,999.71,895.4 Operating expenses- 01.034,787.44,837.2 Income Taxes20.272,061.71,714.2 Net Income22.221,867.41,527.8

25 Net Income – Non-Life (In Million Pesos)

26 Net worth – Non Life The financial structure of the non-life sector revealed : In Million Pesos% Increase 20042003 Assets1.8365,554.064,373.1 Liabilities- 1.7730,952.8031,502.60 Net worth5.2634,601.232,870.5

27 Net Worth – Non-Life

28 Life Premium (in million pesos) % growth 2004 % dis. 20042003 % dis. 2003 Ordinary1.6986.7335,916.487.8435,320.4 Group1.2513.275,496.712.164,887.4 Total2.9910041,413.110040,207.8 Life Premiums – In Million Pesos

29 LIFE PREMIUM (in millions)

30 2004 Life Premium Distribution

31 Kind of PaymentAmountPercent distribution Death benefits3,985.320.85 Surrenders4,146.521.70 Policy Dividends3,969.920.77 Matured policies2,662.113.93 Supplementary Contract2,292.812.00 Others2,053.010.7 Total19,109.6100.00 Life Sector – Benefits


33 Net Income – Life Sector These sectors experienced: Income (in million pesos) % Increase 20042003 Underwriting308.9(2,064.2)(504.7) Investment17.0818,651.015,929.6 Operating expenses-4.519,552.59,983.2 Net Income b/ tax29.257,034.35,441.7 Income Taxes paid9.59(93.7)(85.5) Net Income29.56,940.65,356.2

34 NET INCOME – Life Sector

35 Net worth- Life Sector The financial structure of the life sector revealed: In Million Pesos% Increase20042003 Assets15.2240,042.7208,366.4 Liabilities20.9182,805.50151,180.4 Net worth0.0857,237.257,186.0

36 Net Worth - Life Sector

37 C. PROFESSIONAL REINSURERS SECTOR Reinsurance Premiums Written The reinsurance sector comprising of two (2) domestic professional reinsurers accounted for P 2,603.0 million in premium volume for 2004, a slight decrease in comparison with the P 2,612.3 million in 2003, with three (3). However, this sector wrote P 214.1 million premium on business accepted from overseas which was lower than the 2003 premium of P 253.6.

38 Reinsurance Sector – Premium Income

39 Net Income – Reinsurance These sectors experienced: Income (in million pesos) % Increase 20042003 Underwriting153.5129.5 Investment250.2224.2 Operating expenses214.5183.9 Net Income b/tax189.2169.4 Income Taxes paid0.614.2 Net Income a/tax21.52188.6155.2

40 Reinsurance – Net Income

41 D. The Philippine Market Structure Here is a chart of the Philippine Market Structure for the last two year 2003 and 2004. We are fortunate to include herein incomplete data for 2005 because licensing of insurance companies and intermediaries are done on July 1 of every year.

42 200520042003 Number of Licenced Companies128137141 Composite344 Domestic333 Foreign (locally incorporated)-11 Life293432 Domestic2422 Foreign (locally incorporated)910 (Branch Operation)1 Non-Life9497102 Domestic8791 Foreign (locally incorporated)56 (Branch Operation)55 Professional Reinsurers – Doms.223

43 Sales Agencies and Technical Services 20042003 Ordinary Agents40,76233,121 General Agents619403 Variable Life Agents857650 Insurance Brokers127 Reinsurance Brokers43 Public Adjusters22 Independent Adjusters59 Accredited Actuaries4542 Resident Agents6265 Non-Life Company Underwriters527534

44 E. Governments Supervision of Insurance Office Name: Insurance Commission IC Bldg., 1071 UN Avenue Ermita, Manila Insurance Commissioner- Ms. Evangeline C. Escobillo Telephone- 063 2 523-84-61 to 70 e-mail-

45 F. CONCLUSION The Philippine insurance industry continues to thrive despite adverse factors affecting the Philippine economy, to mention a few are: 1-Volume of premiums is a function of economic activity. Governments fiscal problem slowdowns industrys results affecting insurance needs. 2-Philippines lies in Pacific rim of fire, hence susceptible to volcanic eruptions and earthquakes limiting retention capacity of insurers.

46 3-The industry feels they are over-taxed, hence there is always the clamor for legislated reduction of existing taxes or do away with double taxation on premiums and insurance business corporations. 4-In the light of globalization and competition, insurance clients may be forced to get coverage in foreign lands, especially marine covers. 5-Although the budget costs of supervision gets higher every year, the quantity and quality of output are affected because of low salaries of employees in the government sector.

47 Thank you everybody for your wonderful attention. Melbourne Zoo -2004

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