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Philippines’ non-life sector resurfaces to ‘stable’ outlook: AM Best
Higher domestic interest rates are expected to accelerate investment yields.
The Philippines’ non-life insurance market has gotten out of the negative waters and into a safer shore amidst high domestic interest rates expected to boost its investment yields, according to AM Best.
AM Best also sees growth opportunities in personal and commercial insurance lines, price corrections in property insurance, and better alignment with global risk management and financial reporting standards.
However, the market faces challenges such as limited property catastrophe reinsurance appetite, which increases the market’s net retention of underwriting risks and exposure to natural catastrophes, raising the risk of earnings volatility.
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The Central Bank of the Philippines projects real GDP growth of 6% to 7% in 2024, driven by an improved global growth outlook, a boost in tourism, labour market improvements, and increased infrastructure spending.
With stable economic conditions and persistent inflation, interest rates are expected to remain high in the near term. Domestic monetary policy is likely to follow the US Federal Reserve's actions, with potential easing only after inflation risks are controlled.