Philamlife maintains lead in insurance industry with P2.5-B income last year

Industry leader Philippine American Life and General Insurance Co. (Philamlife) registered a net income of P2.5 billion last year. The company had total assets of P64.6 billion.

First year premium income including renewals grew 8.5 percent to P7.6 billion last year from P7 billion in 2000. First year premiums are an indicator of the year-to-year growth of a life insurance company.

Philamlife president and chief executive officer Jose L. Cuisia said that they are targeting a 15- to 20-percent growth in operating income this year on the back of a growing optimism in the Philippine economy.

"That is better than the growth target of the life insurance industry estimated at 10 to 12 percent," Cuisia said.

Gross revenues generated by Philamlife grew nine percent to P14.1 billion while total volume of life insurance in force reached P207 billion, up 10 percent over the previous year. Benefits paid amounted to P3 billion, an increase of 17.2 percent.

Philamlife's sales target for the current year is P2-billion worth of new businesses.

In 2000, the American Insurance Group (AIG) affiliate posted a growth of 16 percent after registering a growth of 20 percent the year before. It expects to remain on top of the country's life insurance industry. AIG is considered among the biggest insurance and financial services institutions in the world.

Cuisia tried to temper his optimism, however, taking note that interest rates have been dropping in the past few months reaching record lows.

"The company's level of earnings depends on the way the interest rates have been dropping for our investments team," he added.

Investment assets reached P61.2 billion and net income hit P5.2 billion last year with the bulk placed in long-term investments including government securities, fixed rate Treasury notes (FXTNs) and government-issued dollar bonds.

Recently, it purchased P4.4 billion worth of FXTNs while holding government bonds amounting to P27.4 billion.

Philamlife has been the market leader in the life insurance industry for several years now. First year premiums in 1999 reached P1.417 billion. In 1999, it registered the best annual growth rate of 2.10 percent among the 40 life insurance companies in the country. It has 150 offices, 5,800 agents, and six business centers nationwide.

For many years now, Philamlife has maintained its leadership with second place being contested by Insular Life and Assurance Corp. and Sun Life of Canada (Philippines) Inc. (Sun Life).

The fourth and fifth spots are being contested by Manufacturers Life (Philippines) Insurance Co., Ayala Life Assurance Corp., and Philippine Axa Life Insurance Corp.

The top five life insurers account for half of the industry's total premium earnings every year.