AM Best Sees Steady Performance In Philippine Non-Life Insurance Segment

KUALA LUMPUR, May 15 (Bernama) -- Global credit rating agency, AM Best has maintained its stable outlook for the Philippine non-life insurance market, citing robust growth prospects, stabilised reinsurance capacity, and a favourable economic environment as key supporting factors.

In its latest “Market Segment Outlook: Philippines Non-Life Insurance” report, AM Best highlighted the continued expansion of the market, underpinned by increasing demand across key insurance lines, particularly across property, motor, and casualty.

The Insurance Commission of the Philippines reported a 10 per cent increase in gross premiums written in 2024, amounting to 140 billion Philippine pesos (US$2.4 billion). (US$1=RM4.28)

“We expect the Philippine non-life insurance market to continue its growth trajectory over the next 12 months.

“This will be fuelled by the country’s economic development and the rising awareness of the need for insurance, which should help increase insurance penetration in the medium term,” said AM Best senior financial analyst, Susan Tan in a statement.

Tan is scheduled to present further insights from the report at the Philippine Insurance Summit 2025, to be held on May 20 at Space at One Ayala in Makati City, Philippines.

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The report also points to price corrections in the property insurance segment and more selective underwriting practices as factors that will help maintain premium rate adequacy. At the same time, a robust interest rate environment is expected to support investment income for insurers.

Another positive trend is the increased availability of reinsurance capacity, particularly for gross excess of loss programmes. While reinsurers remain cautious—especially in catastrophe-prone areas—they are showing greater willingness to support the Philippine market.

Despite the positive outlook, the report acknowledges several offsetting challenges. Climate-related risks, including increasingly volatile weather patterns, could affect underwriting performance and lead to greater claims volatility. In addition, stricter regulatory and disclosure requirements, while beneficial in the long run, may increase near-term operational costs for insurers.

AM Best also flagged global trade uncertainties, particularly with the United States—one of the Philippines’ key trading partners—as a potential headwind.

-- BERNAMA