The National Reinsurance Corporation of the Philippines (PSE: NRCP) is looking forward to new gains in 2022 on the back of better economic prospects at home, brought about by relaxed pandemic 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 Allan R. Santos, Nat Re President and Chief Executive Officer.
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 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 the various local and international headwinds, notably Typhoon Odette in December 2021, and the Ukraine-Russia war beginning in early 2022, with the latter negatively impacting 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 managing and pricing reinsurance coverages.” Santos said.
Meanwhile AM Best, the world’s first credit rating agency, affirmed Nat Re’s B++ (Good) Financial Strength Rating and bbb (Good) Long Term Issuer Credit Rating, with an outlook of stable last June 2022.
“The ratings reflect Nat Re’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management,” AM Best said in a press release on Nat Re’s credit ratings.
“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 added.
In addition to the expected growth in the company’s life and health business amid heightened awareness on the need for life and health insurance protection, Nat Re also expects to usher the launch of the Philippine Catastrophe Insurance Facility (PCIF) this year, in cooperation with the Philippine Insurers and Reinsurers Association and the Insurance Commission.
The PCIF aims to increase the country’s financial resilience toward natural disasters while creating a more risk-appropriate rating environment for catastrophe insurance, among other goals.