Philippines’ non-life sector gains from reinsurance capacity: AM Best

Additionally, insurers are expected to benefit from improved investment income.

The Philippine’s non-life insurance sector is forecasted to have a stable outlook, AM Best said, amidst robust growth prospects, expanding reinsurance capacity, and solid investment returns as key positive factors supporting the sector.

In its latest Best’s Market Segment Report, “Market Segment Outlook: Philippines Non-Life Insurance,” the credit rating agency highlighted that premium rate adequacy in the property insurance segment is being supported by recent price corrections and prudent risk selection practices. 

Additionally, insurers are expected to benefit from improved investment income amidst a resilient interest rate environment.

Gross premiums written in the non-life segment grew by 10% in 2024, reaching ₱140b ($2.4b), according to data from the Insurance Commission. 

The growth was largely driven by increased demand across property, motor, and casualty lines, underpinned by the country’s continuing economic development.

“During the next 12 months, we expect Philippine’s non-life insurance market to continue its growth, driven by the country’s economic development and increasing insurance demand across various segments such as property, motor, and casualty,” said Susan Tan, senior financial analyst, AM Best.

“This is anticipated to drive up insurance penetration in the medium term,” she added.

The report also pointed to improving reinsurance conditions, particularly in the availability of gross excess of loss coverage. 

Whilst reinsurers remain cautious—especially in catastrophe-prone regions—they are maintaining pricing and underwriting discipline. 

“The increased availability of reinsurance capacity is expected to ease the heightened catastrophe risk faced by non-life insurers,” said Victoria Ohorodnyk, director, AM Best. 

“This favourable development should help reduce their growing risk retention whilst maintaining market share,” Ohorodnyk concluded.