Ayala insurance group earnings up

The Insurance Group of the Bank of the Philippine Islands has surpassed its full year 2005 income targets at the start of the second semester of the year.

As of end June 2005, net income reached P404.2 million which is even better than the P241.8 million recorded as of end December 2004. The full year income target for 2005 is P306 million.

Ayala Life Assurance Inc. (Ayala Life) president and chief executive officer Emilio S. de Quiros Jr. said that the group’s contribution to BPI accounted for 11.2 percent of total income in the first six months of the year. "It is better than the 5.4-percent contribution for the entire 2004," he added.

The group includes Ayala Life, BPI/MS Insurance Corp. (BPI-MS), Universal Malayan Reinsurance Corp. (UMRe), Ayala Plans, BPI Bancassurance Inc. (BBI), and the Ayala Health Care Inc.

At the end of August this year, Ayala Life reported premium income of P1.32 billion well on track to hit its P2.1-billion target for the entire year. In terms of net income, it surpassed the full year target of P253.9 million after only six months at P297 million.

BBI accounted for a premium income of P464.7 million after the first semester, resulting in a net income of P10.7 million. Full year net earnings last year reached P17.3 million. It sells life insurance policies through BPI’s branch network.

Despite the poor performance of the pre-need industry, Ayala Plans reported a net income of P88.8 million well passed the full year target of P28 million. In terms of premium income, the full year target of P687 million is well in sight after reporting a P454.7- million performance end August.

After the first semester, plans in force stood at 46,342 slightly bettter than the 46,208 plans end 2004. Education plans sales hit P115 million while pension plans reached P339 million.

Actuarial reserve liabilities (ARL) stood at P2.72 billion versus a trust fund of P2.78 billion, or a 102-percent coverage or a percentage of trust fund to ARL.

Gross premiums written by UMRe remained modest reflecting the country’s poor business environment. At the end of June this year, gross premium written stood at P257.5 million still ontrack to hit the full year target of P576.8 million.

That is a modest increase compared to the P561 million recorded for the entire 2004. "There is very little business, much less new businesses that needs huge insurance coverage that requires reinsurance," De Quiros lamented.

Non-life BPI-MS reported gross premiums written of only P893 million well below the 2005 full year target of P2.2 billion. Last year, premiums hit a little over P2 billion.