Nippon Life targets 10th spot overall in next two years

Nippon Life Insurance Phlippines Inc. (Nippon Life) is targetting to raise its total premium income to P720 million this year, from its P600 million recorded in 2006.

"We will raise our total assets to P3 billion from the P2.4 billion in 2006," Yoshinobu Kimura, president and chief executive officer of Nippon Life, said in a press briefing last week.

In 2005, the Yuchengco-allied life insurer reported total premiums of P543 million, ranking it 13th overall in both premiums and assets, among the 34 registered insurers in the Philippines, based on data from the Insurance Commission.

"We want to be ranked 10th overall within the next two years," Kimura said, adding that the Japanese insurer was prepared to acquire insurance companies to hit their two year target.

So far, Nippon Life has relied solely on organic growth to remain in the top 20 insurers in the country since it joined the frey in 1997.

Meanwhile, the life insurer admitted that they were increasing the premium prices of its products due to the low interest rate environment for its investments, as well as the high tax constraints experienced by the country’s insurance industry.

Nippon Life senor vice president and chief finance officer Antonio de Rosas said that they would rather increase the premium prices by a single digit and still offer the best protection, rather than offer lower premium prices with lower cover.

To make up for the lower interest yields on investments, Nippon Life will make better investments on private placemnents or corporate loans as well as manage its operating expenses.

Nippon Life, which is also the sister company of the Great Pacific Life Assurance Corp. (Grepalife), plans to introduce unit-linked or variable insurance product to increase its first-year premiums this year. Both insurers are allied with the House of Investments of the Yuchengco group of companies.

New business in 2006 was a mere P300 million, of which 30-percent was sold through the branch network of the Rizal Commercial Banking Corp. (RCBC).

RCBC, through the House of Investments, owns 20 percent of Nippon Life which allows the insurer to sell its products through the bank, also known as bancassurance. The other 30 percent equity of Nippon Life is held by Grepalife, with the balance controlled by Nippon Life of Japan. — Ted Torres