Annual Seminar on Regulatory Issues for Senior Officers of Insurance Regulatory Agencies

1. Annual Seminar onRegulatory Issues for Senior Officers of Insurance Regulatory Agencies Venue: Hotel ITC Kakatiya Sheraton, Hyderabad, India Date: 14th - 16th November 2005

2. COUNTRY PRESENTATION FOR THE PHILIPPINES Mr. Antonio E. Enano Supervising Insurance Specialist Rating Division, Insurance Commission IC Bldg., 1071 UN Avenue, Manila, Philippines

3. Republic of the Philippines A. BASIC DATA National Name : Republika ng Pilipinas Capital City : 2003 est.-- Manila, 13,790,900 (metro. area), 10,232,900 (city proper) Land Area : 115,830 sq mi (300,000 sq km) Archipelago comprising 7,107 islands Population : 2005-- 85.2 million - (growth rate: 1.8%); birth rate: 25.3/1000; infant mortality rate: 23.5/1000; life expectancy: 69.9; density per sq mi: 759 President : Gloria Macapagal Arroyo First term (2001- 2004); Elected in 2004 for a 6-yr. term no reelection

4. Monetary unit : Peso Convertion: $ 1 = P 54.69 ( Nov. 11, 2005) Languages : Filipino (based on Tagalog), English (both official); eight major dialects: Tagalog, Cebuano, Ilocano, Hiligaynon or Ilonggo, Bicol, Waray, Pampango, and Pangasinense Ethnicity/Race : Christian Malay 91.5%, Muslim Malay 4%, Chinese 1.5%, other 3% Religion : Roman Catholic 83%, Protestant 9%, Islam 5%, Buddhist and other 3% Literacy rate : 92.3% (2000)

5. Economic Summary : GDP/Constant ’85 prices (2004 ) PESOS 318,560 million Real Growth Rate : 5.9% Inflation : 7.0%.(Sept. 2005) Labor force : 35.86 million; agriculture 36%, industry 16%, services 48% (2004 est.). Unemployment : 7.7%.(April 2005) Arable land : 19%. Agriculture: sugarcane, coconuts, rice, corn, bananas, cassavas, pineapples, fish, mangoes, pork, eggs, beef

7. NATIONAL INCOME (in million)

9. NATIONAL INCOME (% growth)

10. National Income

14. Areas of Economic Growth in 2004 • Agricultural production 5.1 growth rate from 3.9 with • gov’t. infrastructure, financial and technical support. • Industry and services rose at 5.2 and 7.1 percent • respectively, with support from domestic and foreign • demand. • Consumer spending strong due to the growth in rural • incomes. • Money remittances from overseas foreign workers grew • 11 % and bolstered spending. • Exports of goods and services expanded at 14 percent. • Tourist arrivals 23.6 percent and reached 1.8 million in • 2004. • Call center 35,000 seats in 2004 employing 56,000 agents • from 20,000 seats in 2003 • Government supported micro, small and medium • enterprises.

15. Areas of Concern - • Fiscal position, although still weak, is improving. The 2004 national government fiscal deficit ended at P 186.1 billion. • Unemployment shall be reduced to generate 10 million jobs the next 6 years. • Low Foreign Investment - The government is also addressing the key bottlenecks to investment in the Philippines • Lastly, the government is keen on addressing the problem of corruption

16. INSURANCE INDUSTRY in 2004 Combined life and non-life premium

17. COMBINED LIFE & NON-LIFE PREMIUM

18. Non-Life - Gross Premium

19. Gross Premium – Non-Life

20. Non-Life – NET PREMIUM

21. Net Premium – Non-Life

22. Non-Life - Net Incurred Claims

23. Net Incurred Claims – Non-Life (In-Million Pesos)

24. Net Income – Non-Life These sectors experienced:

25. Net Income – Non-Life (In Million Pesos)

26. Net worth – Non Life The financial structure of the non-life sector revealed:

27. Net Worth – Non-Life

28. Life Premiums – In Million Pesos

29. LIFE PREMIUM(in millions)

30. 2004 Life Premium Distribution

31. Life Sector – Benefits

32. Life Sector – Benefits

33. Net Income – Life Sector These sectors experienced:

34. NET INCOME – Life Sector

35. Net worth- Life Sector The financial structure of the life sector revealed:

36. Net Worth - Life Sector

37. C. PROFESSIONAL REINSURERS’ SECTOR Reinsurance Premiums Written The reinsurance sector comprising of two (2) domestic professional reinsurers accounted for P 2,603.0 million in premium volume for 2004, a slight decrease in comparison with the P 2,612.3 million in 2003, with three (3). However, this sector wrote P 214.1 million premium on business accepted from overseas which was lower than the 2003 premium of P 253.6.

38. Reinsurance Sector – Premium Income

39. Net Income – Reinsurance These sectors experienced:

40. Reinsurance – Net Income

41. D. The Philippine Market Structure Here is a chart of the Philippine Market Structure for the last two year 2003 and 2004. We are fortunate to include herein incomplete data for 2005 because licensing of insurance companies and intermediaries are done on July 1 of every year.

44. E. Government’s Supervision of Insurance Office Name: Insurance Commission IC Bldg., 1071 UN Avenue Ermita, Manila Insurance Commissioner- Ms. Evangeline C. Escobillo Telephone- 063 2 523-84-61 to 70 e-mail- oic@i-manila.com.ph

45. F. CONCLUSION The Philippine insurance industry continues to thrive despite adverse factors affecting the Philippine economy, to mention a few are: 1-Volume of premiums is a function of economic activity. Government’s fiscal problem slowdowns industry’s results affecting insurance needs. 2-Philippines lies in Pacific rim of fire, hence susceptible to volcanic eruptions and earthquakes limiting retention capacity of insurers.

46. 3-The industry feels they are over-taxed, hence there is always the clamor for legislated reduction of existing taxes or do away with double taxation on premiums and insurance business corporations. 4-In the light of globalization and competition, insurance clients may be forced to get coverage in foreign lands, especially marine covers. 5-Although the budget costs of supervision gets higher every year, the quantity and quality of output are affected because of low salaries of employees in the government sector.

47. Thank you everybody for your wonderful attention. Melbourne Zoo -2004