PhilAXA on track for full year P4.2-B premiums

The Philippine AXA Life Insurance Corp. (PhilAXA) is optimistic that it would hit its 2004 premium target of P4.16 billion and total first-year premium of P3.56 billion.

Last year, its total premium income reached P2.64 billion, which was reportedly good enough to place it at the fourth place overall among the country’s life insurance industry. However, the official report from the Insurance Commission (IC) has still to be released in the middle of the year.

Target first-year premium income for this year was placed at P492 million while P286.9 million was the target for group business. Single premium target was set at P2.78 billion.

For the first three months of the year alone, premium revenues grew by a whopping 112 percent, or from P359 million from January to March 2003 to P762 million in the same period this year.

Over 70 percent of the premiums in that period was a direct product of bancassurance. However, company officials said they expect the difference between sales force-generated policies and bancassurance generated policies would be reduced.

PhilAXA president and chief executive officer Victor Quisumbing said its multi-distribution network was the key and will remain the key to the better-than-expected full year performance. These include sales force, group, and bancassurance.

Quisumbing said that the appetite for new products will continue to help the life insurer meet its full year targets.

"Our product development initiatives in the first half of 2003 are finally paying off. We have succeeded in introducing products that generated more value for the company and at the same time addressed the evolving sophistication of the market," the insurance chief explained.

Among the products that would help carry the insurer, is variable life products for both the US dollar-and peso-denominated ones. Variable products are a cross between mutual funds and life insurance.

"The A and B market has an appetite for higher risk products which is spiced with protection in life insurance over the traditional insurance products," the chief executive said.

It passes on to the client the risk for growth of its policies, but the returns are likewise commensurate.

It also introduced the first dollar-denominated variable life insurance products while it repriced its peso-based plans.

Internal changes in both the compensation and commission packages will also contribute to the better performance this year. "Based on our survey, the new compensation package for the sales force would be almost 40 percent higher than the market."

Meanwhile, renewal premiums last year grew by 63 percent from P427.89 million in 2002 to P700 million. However, first-year premiums dipped to P452 million last year from P465.9 million in 2002.

Net income likewise slipped to P19.7 million last year from P22.9 million in 2002. – Ted Torres