Philippines non-life sector takes the lead: A.M. Best

The Philippine non-life insurance sector is going through a transition as it scales up to meet higher capital requirements under a new regulatory code. Challenging market conditions, with little driving momentum in the industry, has left many insurers feeling pressured as they cope with capital hikes. A.M. Best believes market consolidation is inevitable as the number of players continues to shrink due to merger activity and license withdrawals.

Historically, regulatory change and reform has been slow in the Philippines. The industry has still not seen vibrant merger and acquisition activity. Given current conditions, A.M. Best believes an abrupt change in the insurance landscape is still a way off.

The non-life sector has generated stable underwriting results despite the country’s high exposure to natural catastrophes. Low insurance penetration in the Philippines, combined with low risk retention by insurance companies, has contributed to steady business performance for most non-life players. Nevertheless, most companies have low capital bases with less capacity to write substantial business and improve profits.

The non-life sector has generated stable underwriting results despite the country’s high exposure to natural catastrophes. Low insurance penetration in the Philippines, combined with low risk retention by insurance companies, has contributed to steady business performance for most non-life players. Nevertheless, most companies have low capital bases with less capacity to write substantial business and improve profits.