The National Reinsurance Corporation of the Philippines (Nat Re) is looking forward to new gains in 2022 on the back of improved economic prospects at home, brought about by the relaxation of COVID-related restrictions and a more robust life reinsurance segment.
"We are optimistic of recapturing gains in light of the improving economic environment, while remaining mindful of ever-present natural disaster threats and geo-political risks at home and abroad,” said MR Allan R Santos, Nat Re president and CEO, in a statement. Following a robust 7.7% growth in the fourth quarter of 2021, the Philippine economy grew by 8.3% in the first quarter of 2022, with the main contributors being manufacturing, wholesale and retail trade, repair of motor vehicles and motorcycles, and transportation and storage, according to the Philippine Statistics Authority. This came amid various local and international headwinds, notably Typhoon Odette in December 2021, and the Ukraine-Russia war that began in early 2022, with the latter negatively fuelling inflation worldwide. “We have been providing claims processing support and guidance to our cedants affected by the typhoon. We also have reduced and continue to underweight our investments in equities while taking advantage of the increase in yields of fixed income securities, factoring in inflation in pricing and managing insurance coverages.” Mr Santos said. Meanwhile, AM Best, the world’s first credit rating agency, forecasts Nat Re’s underwriting in 2022 to be backed by a more streamlined portfolio and the company’s domestic life reinsurance segment. “AM Best expects the company’s prospective underwriting performance to be supported by ongoing portfolio remediation measures, including reduced participation or exiting from loss-making non-life treaties, as well as business growth in the more profitable domestic life reinsurance segment,” AM Best said in a press release on Nat Re’s credit ratings. Last June 2022, AM Best affirmed Nat Re’s B++ (Good) Financial Strength Rating and bbb Long-Term Issuer Credit Rating, with an outlook of 'Stable'. In addition to expected growth in the company’s life and health reinsurance businesses amid heightened awareness on the need for life and health insurance), Nat Re also expects to participate in the Philippine Catastrophe Insurance Facility (PCIF) launch this year. CAT facility
The PCIF also aims to address the catastrophe insurance gap and create a more risk-appropriate rating environment to ensure sustainable catastrophe premium rates, among other goals.
Through the PCIF, Nat Re helped to initiate a review of the minimum tariffs for earthquake and typhoon risks, which have not been updated for more than a decade. The new schedule of minimum tariffs, which were set to improve the sustainability of catastrophe insurance, will soon be implemented.
Nat Re provides life and non-life reinsurance capacity, and in relation to this offers consultancy, technical, and advisory services to its clients—the direct insurers—in emerging markets.