CEBU, Philippines - Although the life insurance industry had a tough year with controversies and issues hounding the sector since last year, industry players remains optimistic to achieve a positive growth this year as the market clamors for safe investment channels.
Although the life insurance industry had a tough year with controversies and issues hounding the sector since last year, industry players remains optimistic to achieve a positive growth this year as the market clamors for safe investment channels.
“The life insurance sector is poised for strong growth in the next couple of years, with low rates while people are looking for safest investments,” said Bank of the Philippine Islands (BPI) Capital Corporation president Teodoro K. Limcaoco.
Limcaoco, who also heads the Ayala Life Assurance Inc. said that while the entire life insurance only posted a 12 percent growth last year, he is confident that Ayala Life will rake in a 25 percent growth in 2009, banking on Ayala’s strong brand name in quality and financial prudence.
He admitted through that the ordeal of PhilAm Life last year and the unfortunate fate of the Legacy Group, have affected the entire insurance industry in the Philippines, may it be life insurance or pre-need. The game now lies on how to regain the trust of the market.
“If you have number one insurance company in trouble,” Limcaoco said it could naturally create jitters in the market. But the fact that PhilAm Life remains a strong company to date and has in fact been retained by its mother firm AIG from its attempt to let go of the company, which now provides signals of positive prospects in the entire insurance industry in the country.
“Ayala Life, which only captured a minimal market share in the entire life insurance business in the country is now poised to do aggressive marketing and promotional activities to take advantage the “hungry” market, he said.
According to Limcaoco, the company is considering Cebu as a very important market, as it surpassed the P28 million target last year by hitting P37 million first year premium clients.
“There’s really a lot of wealth in Cebu. Cebuanos are savvy in how they invest. They look for companies that offer safety and decent yield. Before, yield was very important for them, now it becomes a secondary priority to safety,” he said.
One of the strategies that will be applied by Ayala Life this year, to stimulate the insurance market, is to constantly provide attractive packages, and products, such as its introduction of “Express Dollar Protection Plus” or EDP-Plus, which is expected to give a “twist” to life insurance offering which is a combination of investment and insurance.
An investment of US$20 thousand could provide an annual fix interest rate of three percent for five years. In case of the death of an investor, the company gives a150 percent outright to beneficiaries.
Ayala Life national sales director Angelo M. Cabrera explained that since this is a limited offer, Ayala Life is offering this particular package in just two weeks, starting on Monday (March 16), while it is still awaiting the final go signal from the Insurance Commission (EC).
Also, one of the backbone that will push a record-growth for the company this year is its strong partnership with its sister-company BPI.
Limcaoco said the company will take advantage of the bancassurance component, and this will play a major role in the Ayala Life’s growth in the next few years.