Malayan sees slower premium growth

MALAYAN INSURANCE Co. expects slower premium growth this year as it may have to increase rates after reinsurance costs spiked in 2023, its top official said.

“This year, we’re not expecting [premiums] to go up since reinsurance costs have skyrocketed, so we have to increase our rates. The whole industry is affected by it. There might be a slowdown,” Malayan Insurance President and Chief Executive Officer Paolo Y. Abaya told BusinessWorld last week.

He said their premiums might grow by single digits or be flat from the previous year.

Malayan Insurance saw a slight growth in premiums in 2023 despite struggling due to higher reinsurance costs, Mr. Abaya said.

Malayan Insurance booked a net premium income of P4.72 billion in 2023. Its net income stood at P600.77 million in 2023.

Mr. Abaya added that any big catastrophe could also impact the company’s performance.

“Our biggest risk in the Philippines is catastrophe. If another [Typhoon] Odette happens, it’s going to be very terrible. A lot of us suffered during Odette… Even the Philippines is ripe for a big earthquake one of these days, so I hope it doesn’t happen,” he said.

Meanwhile, Mr. Abaya said the nonlife insurance industry could still grow as the economy remains robust.

“I think the whole industry in general will continue to grow because the economy’s doing very well. So, as long as businesses are doing well, most of us will continue to grow,” he said.

The nonlife insurance industry saw its net premium income grow by 12.9% year on year to P64.24 billion in 2023 from P56.9 billion. Its net income rose by 30.07% to P9.11 billion from P7 billion.

Malayan Insurance on Friday also announced its partnership with Atradius to launch its own trade credit insurance product.

While the product is not seen boosting its premiums and income significantly, Mr. Abaya said he hopes to increase insurance penetration as the company offers it to businesses.

“It’s a very niche product in the market. Not many people are offering it — that’s why we partnered with Atradius. So, hopefully, we can start to grow,” he said. — Aaron Michael C. Sy