THE National Reinsurance Corporation of the Philippines (Nat Re) booked a net profit of P120 million last year, down by 24% year on year after low investment income offset its high earnings from underwriting.
Nat Re, the country’s national reinsurer, told the local bourse on Wednesday that its net income fell from P157 million in 2019.
It attributed the decline in its profit to “stronger underwriting results weighed down by lower investment income.”
Nat Re reported net underwriting profit prior to administration expenses of P341.7 million, up 151% from P136.4 million in 2019, due to the increase in reinsurance premium income and reduced loss ratios.
Its gross written premiums inched up by three percent to P4.47 billion last year from P4.34 billion in 2019, driven by higher reinsurance premiums from the life and non-life domestic segments.
It reported P387 million in overall comprehensive income.
Meanwhile, its investment income went down by P200 million in 2020 from a year ago amid the pandemic. Its total investments and other income also fell 62% to P132 billion last year from P349 billion in 2019.
“While Nat Re’s financial performance in 2020 reflected financial market volatility caused by COVID-19 (coronavirus disease 2019) especially in the first half of the year, the company ensured operational resilience to continue delivering reinsurance-related services and serve its customers efficiently,” Nat Re President and CEO Allan R. Santos said.
Nat Re’s combined ratio, which is the sum of loss, commission, and expense ratios used to measure the profitability of the insurance business improved to 98% last year from 104% in 2019.
It said ratios below 100% mean a company is making an underwriting profit, while those above the threshold shows the firm is spending more on payouts and expenses versus the premiums it earns. — BML