Philamlife manages new premium record

Despite a low sales output from its new life insurance products, Philippine American Life and General Insurance Co. (Philamlife) still managed to become the first life insurance company in the country to break the P10-billion gross premium barrier.

Philamlife admitted total premiums of P10.2-billion last year buoyed mainly by the P7.6-billion in renewal premiums. Premiums grew by 13.6 percent while new businesses grew by almost 18 percent to P2.55 billion.

The 2003 results allowed a bullish 15- to 20-percent growth target for 2004 despite the anticipated poor economic activities and political uncertainties for most of the year.

US dollar-based products only accounted for less than 10-percent of total sales and the one-time payment or single premiums only served as bonuses to the total.

The life insurer paid benefits amounting to P3.83 billion in the same period.

Company officials admitted that the shift to new life products has been slow including the unit-backed and investment-rich products. "The traditional continues to dominate our sales while the industry has been introducing innovative life and investment products," they added.

The record-setting year likewise reflected huge one-time or non-recurring gains in investments.

Total investments reached P81.47-billion but low interest rates resulted in a 6.5-percent growth to P6.43 billion in net investment income. Net income hit an outstanding P4.4 billion buoyed by extraordinary and non-recurring gains from the sale of stocks and bonds.

In a press briefing yesterday, Philamlife president and chief executive officer Jose L. Cuisia said that the record-breaking performance had several key performers including a 12-percent growth rate in provincial agencies versus the modest four-percent growth contributed by Metro Manila.

"We also registered remarkable growth from key segments like the high net-worth individuals, the Filipino Chinese community and the overseas Filipino workers (OFWs)," Cuisia added.

Also the positive gains from strategic alliances contributed to the 2003 performance. He cited the alliance with Security Bank, the joint venture with Equitable PCI Bank, and the AIG American General.

The Philam Equitable Life Assurance Co. (Pelac), the bancassurance joint venture with Equitable PCI Bank and the marketing alliance with Security Bank, are expected to become major contributors in the coming years.

"We expect new challenges particularly with the continuing weakness of the Philippine economy, the low interest rate environment, and political uncertainties brought by the May national elections," Cuisia said, vowing to ensure the introduction of product and service innovations.

In 2002, Philamlife’s premium income stood at nearly P9.0-billion better than the P7.6 billion recorded by its nearest competitor, and the P5.3-billion of the third best performer in that year. And from all indications, the ranking would remain practically unchanged for the top five performers in 2003.