The scope of the insurance industry is vast, but the two main sectors are divided between life and non-life insurance. The sub-categories of non-life insurance are fire, marine and aviation, and motor insurance. According to the premiums written for non-life insurance alone in 2017, fire insurance covers about 35 percent of the total written premiums in the country. The premiums were underwritten by direct underwriting companies, including the Government Service Insurance System (GSIS).
Although direct writing companies underwrite risks, the risks can also be transferred to another insurance company, also known as a reinsurer. In exchange for transferring the risks to reinsurers, the primary insurer cedes a value of the written premium under a facultative agreement. The risk appetite of an insurer may vary. In 2017, the net value of the overall risks written amounted to around 72.1 trillion Philippine pesos. This value was significantly higher compared to the previous years.
The life insurance business in the Philippines is the more lucrative business of the insurance industry as far as insurance density is concerned. Insurance density measures the amount of average spending by an individual on insurance, and between non-life and life insurance, the result of the latter exceeded the non-life insurance business for five consecutive years.
Life insurance in the Philippines, is classified into two types of products like traditional life and variable life insurance. Generally, these two have a life protection benefit. However, variable life insurance product has an additional linked investment which provides a return on investment benefit for the policyholder.