Philippine Non-Life insurers’ premiums may rise 10-15% this year as catastrophes push up firms’ reinsurance costs

Philippine Non-Life insurers could increase their general minimum premium rates by 10% to 15% this year as natural catastrophes have affected the reinsurance market, resulting in losses, an industry group said.

“Sometimes, we really have to adjust because as it is, it’s hard to write losses. It’s not sustainable if insurers will continue to price at the same level even though your cost of reinsurance is already very high,” Malayan Insurance Co., Inc. Chief Operating Officer and Philippine Insurers and Reinsurers Association (PIRA) Trustee Eden R. Tesoro said at a press briefing on Wednesday.

PIRA Executive Director Michael L. Rellosa said the group has to inform the Insurance Commission (IC) that premiums will increase.

“We can’t just increase our prices. It has to be approved by the regulators. And even if you can, of course, you have to balance with the market conditions,” he said.

Based on seasonal renewals of reinsurance programs, which are usually in December, April, and July, PIRA could notify the IC about a rise in premium prices by next month, Mr. Rellosa added.

Ms. Tesoro said premiums will likely continue to increase in the next few years but with “little dips,” depending on each company’s portfolio and risks.

“Some companies are motor heavy, some companies are fire heavy, and some companies are the same. But what I can see is that perhaps the pricing will stay with small dips, generally speaking. Again, that may or may not be true for specific clients,” she said.

“One of the reasons why we have to be cautiously hopeful is because of climate change, and while we say that even if globally the prices of reinsurance seem to plateau, ultimately it comes down to each particular company’s portfolio and how exposed you are. So, reinsurers will look at that,” Ms. Tesoro added.

Meanwhile, investments of nonlife insurers could also be affected by US President Donald J. Trump’s administration’s trade policies, she said.

Mr. Rellosa said this could also contribute to higher premium rates.

“It’s going to affect trade, and if it affects trade, obviously, it’s going to affect the economy. Anything that affects the economy, we feel in the insurance industry. Either we insure less goods or [increase] the cost. For example, prepar-ing stuff locally would be more expensive because we import all this stuff. So, an increase in tariffs should also increase prices,” he said.

The combined net premiums written of nonlife insurers grew by 10.49% year on year to P71.84 billion in 2024, latest IC data based on submissions of 55 out of 59 licensed firms showed.

Source: bworldonline.com