AXA Phils expects over P5.4 billion in premium income this year

MANILA, Philippines - AXA Philippines said it expects its total premium income this year to be slightly higher than the P5.4 billion level registered in 2008.

Last year, it reported new business worth P1.04 billion and profit of P152 million, making it one of only two life insurers that were able to sell new policies worth over a billion pesos.

“We would like to sell more traditional pay regular policies versus the single-pay policies, although these may still be variable or unit-linked (VUL) products,” Severinus P.P. Hermans, president and chief executive officer of AXA Phiippines, said. VULs are life insurance products that have investment features.

Single pay policies, however, are considered non-recurring business for the insurer. On the other hand, traditional pay policies promise recurring income on a longer period as policies tend to pay on a quarterly, semi-annual or annual basis.

Last year, more than 60 percent of policies sold were single pay VULs while roughly 40 percent were traditional pay policies.

“We want it to reach an equilibrium of 50:50 or even 40:60 in favor of traditional pay modes this year,” Hermans said.

The shift from single pay products to traditional paying mode was the predominant feature for most local life insurers last year. It reflected the poor investment climate as a result of the US-led credit crisis.

Like most major insurers, AXA Philippines is open to acquisition opportunities as it will allow the insurer to grow in size and ranking, Hermans said.

In the same interview, the AXA Philippines official expressed concern over the burdensome five-percent premium tax and the documentary stamp tax (DST) that makes buying a life insurance policy expensive.

And like most insurers, they are optimistic that the recently passed PERA Law would be advantageous to the industry. However, the country’s financial sector is still awaiting its implementation. The implementing rules and regulations (IRR) was recently released although reports indicate that there are still technical issues that hinder its full implementation.

AXA Philippines is a joint venture between the Metrobank Group and the global AXA Group. The Metrobank Group is one of the country’s largest financial and business conglomerate while the AXA Group is considered the world’s leading life insurer and the 15th largest corporation in the world.