NCRP obtains stable outlook, strong rating
‘An insurer rated PRS A has strong financial security characteristics but is somewhat more likely to be affected by adverse business conditions compared to higher-rated insurance companies.’
The National Reinsurance Corp. of the Philippines (NRCP) received a stable outlook and a strong rating for financial capacity from the Philippine Rating Services Corporation (PhilRatings) after its assets grew by 4.5 percent last year.
The NRCP obtained a PRS A rating for financial capacity and a stable outlook for the next 12 months.
PhilRatings announced its assessments after the reinsurance corporation grew total assets to P21 billion last year, with an equity of P6.9 billion.
Meanwhile, the NRCP slightly increased its net income by 2.8 percent to P551.3 million.
“An insurer rated PRS A has strong financial security characteristics but is somewhat more likely to be affected by adverse business conditions compared to higher-rated insurance companies,” NRCP said.
Nevertheless, the NRCP said PhilRatings recognized its solid market franchise, strong shareholders and highly experienced management, sound investment portfolio, marked improvement in profitability, and above-satisfactory capitalization.
The NRCP is the country’s sole professional reinsurer of life and non-life insurance companies, taking in at least 10 percent of all reinsurance business from domestic insurance firms.
The Government Service Insurance System serves as the NRCP’s largest stakeholder which holds 25.8 percent of the total shares.
The other major shareholders include the Bank of the Philippine Islands which owns 13.7 percent and MICO Equities, Inc. which holds 12.9 percent.
Climate risks’ effect
Malayan Insurance chief operating officer Denden Tesoro said the price of non-life insurance products has increased 10 to 15 percent in recent years as risks from climate change have grown.
Despite the worsening temperatures, domestic demand for fire and agriculture insurance softened in the first nine months of 2024 as the NRCP reported an 8.6 percent decline in lower gross premiums written for those products.
However, Philippine Insurers and Reinsurers Association executive director Michael Rellosa said further natural disasters due to climate change might force insurers to raise product prices further and weaken demand for non-life insurance.
“Philippine insurers deal only with top-notch global reinsurers and these reinsurers price their protection based on what’s happening around the globe, not just what’s happening here in the Philippines,” he said.