Pelac is a joint venture life insurance company between the Equitable PCI Bank and the Philippine American Life and General Insurance Co. (Philamlife).
Philamlife is a subsidiary of the American International Group (AIG), one of the biggest global financial institutions. Equitable PCI Bank is considered the third largest expanded commercial bank in the country.
The 2005 performance should likely place it in at least fifth spot in terms of first year premiums and third in terms of single premiums. It was ranked 27th in 2003.
In terms of total premiums, Pelac should remain in the top 10 among the 39 players in the cuntry’s life insurance industry.
"We are looking forward to a big year in 2006," Carl Gustini, outgoing president and chief executive officer of PELAC, said. Gustini has been appointed executive vice president of Philamlife although he will remain in the Pelac board.
Part of his optimism is the increase in premium share of renewable premiums in the total albeit sales have remain robust. Single premiums is considered a cash cow but short-term in character.
"We are after long-term relationships with our customers. We do not just offer protection but savings and wealth creation as well," he added.
Single premiums dropped from 75 percent of first year premiums in 2004 to just 37 percent this year. Meanwhile. renewable premiums increased by over 97 percent from the previous year’s performance.
"If we can maintain a balanced ratio of 40:60 for single premiums and renewable, respectively, it is healthy. In fact, that is our long range forecast."
To support its policies as well as its variable products, it has expanded its investment options for both traditional as well as variable products. Aside from fixed income investment products, it is also looking at local dollar bond investment options as well as local peso bond marekts.
Unofficially, returns from its bond products ranged between 17 to 18 percent.
Pelac specializes in bancassurance, that is, selling life insurance products through the branch network of Equitable PCI Bank. The bank has over 400 branches nationwide.
Under existing regulations, the insurer fields at least one financial advisor (FA) in each of the branch. FAs are the only authorized and licensed person to sell insurance products.
Pelac has 325 financial advisors or executives (FAs) and it is looking to reach a one on one ratio in the next few years.
Gustini said that they are looking to replicate if not surpass in 2006 "what benefits we got from bancassurance this year." By 2009, Pelac is looking to join the top five life insurers of the 39 life insurance companies.