Philam Life sees premium growth doubling in 2012

MANILA, Philippines - The Philippine American Life and General Insurance Co. (Philam Life) is confident that it could double the premium growth rate recorded in 2011.

“We have been able to sustain the momentum generated in the second half of 2011 well into 2012,” Rex Ma. A. Mendoza, Philam Life president and chief executive officer, said.

Last year, Philam Life reported total premium income of P13.357 billion, up 19.25 percent from the P11.2 billion reported in 2010. In 2009, total premium income was placed at P10.8 billion.

Growth rates in the second half of 2011 were well beyond 40 percent.

In fact, its present sales agency force of 6,000 is close to the peak of 8,000 achieved in 2002, after having shrunk to just 3,000 in 2010.

Mendoza said that Philam Life has risen from being the laggard of the AIA Group last year, to the darling of the 15 countries where it operates. “In fact, some of our strategies are being replicated (by their AIA counterparts in the 15 countries),” he added.

Meanwhile, it terminated some of its older life insurance products, upgraded others, introduced new traditional and unit linked (variable) life insurance products.

In previous years, over 80 percent of its production were traditional life products, which was its strength.

Mendoza said that they have introduced a basket of unit linked or investment laced insurance products to keep pace with the demand of the market.

In 2011, Philam Life’s variable sales were less than half of total traditional sales. Traditional amounted to P9.1 billion while variables reached an estimated P4.3 billion.

“That is changing this year, i.e., we will maintain the sales growth rate of traditional products but double up on variables,” Mendoza promised.

Data available last year shows that frontrunner SunLife Financial reflected an almost equal sale of traditional and variable products. The life insurers that landed third and fourth reported that 90 percent of their sales were variable products.

Net income last year amounted to P7.3 billion compared to just P3 billion in 2002, considered one of the stronger years for Philam Life. Investment income rose to P12 billion while revenues hit nearly P30 billion.

Consolidated assets grew to P207.29 billion while stockholders’ equity expanded to a profitable P66.39 billion.

Without going into details, Mendoza said that Philam Life has forged a large number of alliance with several bank and non-bank financial institutions to expand its reach. “We are also tapping other resources within the Philam Life and AIA environment previously under- or unutilized.”

The just-concluded Money and Wealth Expo 2012 held at the SMX Convention Center in Pasay, and at the Waterfront Hotel in Cebu City this August may serve as a strong indicator.

Joining Philam Life as co-sponsors were members of the Ayala Group such as the Bank of the Philippine Islands (BPI), Ayala Land Corp., COL Financial Group, Jones Lang La Salle Leechiu, and BPI Philam Life Assurance Co. .

BPI Philam Life Assurance Co. is a joint venture bancassurance company between Philam Life and BPI. In fact, it was ranked sixth overall leader in terms of total premiums last year.

Total premium income of the country’s life insurance industry reached a record P85.6 billion.