Insular Life Group posts modest gains

The Insular Life Assurance Co. Inc. and its subsidiaries reported modest gains with revenues inching up by P100 million to P7.6 billion last year from P7.5 billion in 1999.

It was a creditable performance, said Insular Life Chairman and president Vicente R. Ayllon, given the volatile situation where "many businesses had to perform a balancing act to stay afloat."

In his report during the company’s annual meeting on May 23, Ayllon said the year 2000 was a very difficult year, with the peso falling to 54 to a dollar, the stock market hitting record lows, unemployment deteriorating from 9.7 percent to 11.2 percent and gross domestic products growth slowing to 3.6 percent from 4.9 percent in the fourth quarter.

These negative factors exacted a heavy toll on many businesses including Insular Life, the first and largest Filipino life insurance firm. Insular Life saw is consolidated income declining by 22 percent from P459 million in 1999 to P359 million in 2000 because of weak market conditions particularly in the real estate and equity markets.

There were bright spots, however, in the generally weak landscape, Ayllon said. Life insurance premium income contributed P5.2 billion or 68 percent of total revenues. Meanwhile, consolidated assets grew by two percent to P29.1 billion.

Insular Life also paid its policyholders (for both life and non-life assurance) a total of P2.2 billion in benefits, the same level as that in 1999.

Among its subsidiaries, Insular Life Health Care (I-Care) achieved a remarkable feat by chalking up a net income of P2.8 million in 2000. I-Care implemented clinic-based operations in Makati as well as the preferred hospital plan that allowed lower rates without sacrificing service. Servicing the health care needs of its members are 3,200 medical and dental specialists in more than 3,200 accredited medical and dental specialists in 320 hospitals, clinics and laboratories all over the country.

Insular Life’s financial subsidiaries also eked out gains amid the harsh economic and political climate. Insular Investment and Trust Corp. increased its managed assets by 8.2 percent. The fund level of the money market division rose by 41 percent while its average monthly trading volume surged by 22 percent. Insular Life Savings and Trust Co., the group’s banking arm, had its resources growing by 8.7 percent to P3.5 billion and deposits expanding by 10.8 percent to P2.5 billion.

Insular General Insurance Co. focused on profitable, retainable lines. It culled its portfolio of some unprofitable jumbo corporate accounts to trim its losses.

Ayllon also reported the company’s decision to remain a mutual company amid the global trend toward demutualization or conversion from a mutual to a stock company. Insular Life’s management had considered demutualization as a vehicle for strategic alliances that could bring in expertise in product development, information technology and distribution, but concluded it could access all of these even without a change in structure.

The benefits of staying mutual far outweigh those of demutualization, the company said. By remaining a mutual, the company preserves its tax privileges such as exemption from premium and documentary stamp taxes which have made its products and services cheaper than those of its competitors. It also does away with the risk of falling into foreign hands and losing its Filipino identity under demutualization.

Insular Life also continued to play its role as a good corporate citizen. Through its Insular Life Foundation, it granted full scholarships to 45 students enrolled in the Technological University of the Philippines (Taguig, MM and Talisay, Negros Occidental) last year. It also continues to be the corporate partner of the Phil. Jaycee Senate in the conduct of the yearly Search for the Outstanding Filipino.