Best’s Market Segment Report: AM Best Maintains Outlook on Philippines’ Non-Life Insurance Segment at Stable

SINGAPORE--(BUSINESS WIRE)--
AM Best has maintained its outlook on the Philippines’ non-life insurance segment at stable, citing in part robust growth prospects for the industry driven by economic expansion and a pipeline of large domestic infrastructure projects.

In its new Best’s Market Segment Report, “Market Segment Outlook: Philippines Non-Life Insurance,” AM Best also takes note of the country’s stabilised reinsurance capacity, the emergence of insurance pools to support underwriting capacity at the primary level, and a broadly supportive pricing environment. Another supporting factor is investment income, which is expected to remain bolstered by a robust domestic interest rate environment.

However, offsetting factors include macroeconomic uncertainty, a tighter monetary policy stance, and potential financial market volatility stemming from adverse geopolitical developments. “Another key potential headwind is the increasingly volatile weather conditions, which are placing significant pressure on non-life insurers and contributing to greater volatility in underwriting results,” said Susan Tan, senior financial analyst at AM Best and one of the authors of the outlook.

The Philippines’ economy is expected to grow at a rate of 4.1% in 2026, according to the International Monetary Fund. This marks a 1.5% decrease from a projection that the organisation issued in January, reflecting the impact of the US/Israel-Iran conflict on the Philippines’ reliance on Middle East oil imports.

The country’s non-regulatory landscape continues to develop, with a focus on financial resilience, transparency, and stricter accountability for public infrastructure risk. The mandatory adoption of Philippine Financial Reporting Standard 17 (PFRS 17), the Philippine equivalent of IFRS 17, remains on track for implementation on Jan. 1, 2027. In a move expected to have positive implications for capital management, the country’s Insurance Commission has expanded its definition of “admitted assets” to include real estate investment trusts (REITs) and selected structured products. This is expected to provide insurers with greater flexibility to meet their risk-based capital requirements.

According to the report, the Philippines’ non-life market continues to undergo pricing recalibration, particularly in property lines, driven by the need to address persistent inflation, rising claims costs, and the increasing frequency and severity of climate-related risks. “As a result, insurers are adopting more disciplined underwriting practices, emphasising stricter risk selection and data-driven pricing to better align premiums with underlying exposures,” said Victoria Ohorodnyk, senior director, AM Best.

While premium growth is positive, profitability remains exposed to volatility due to the country’s high exposure to natural catastrophes, such as typhoons, floods and earthquakes. The increase in net retention of catastrophe risks by primary insurers over recent periods has been a strategic response to balance high reinsurance costs with profitability targets.

To access a complimentary copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=365204.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2026 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Susan Tan
Senior Financial Analyst

+65 6303 5023

[email protected]

Victoria Ohorodnyk
Senior Director, Analytics

+65 6303 5020

[email protected]

Christopher Sharkey
Associate Director, Public Relations

+1 908 882 2310

[email protected]

Cynthia Ang
Senior Industry Research Analyst

+65 6303 5026

[email protected]

Source: AM Best