Likewise, the 10-year old life insurer believes its total premiums will grow between 10- to 12 percent this year in the face of poor economic conditions and the unwarranted negative effect of the embattled pre-need industry.
The first-year premium target in 2006 is roughly P740 million from P584 million recorded in 2005. In 2004, first-year premiums reached P517 million; in 2003, P406 million; in 2002, P347 million; and in 2001, P268 million.
"In terms of total premiums, it could be a lower growth rate compared to the rate in 2005, but it will still remain a strong positive growth rate," Bobby G. Madrid Jr., president and chief executive officer of Pru Life UK, said.
Last year, total premiums expanded to P2.3 billion, ranking it sixth among the top insurers in the country. In 2004, premiums grew by 27 percent to P1.9 billion; in 2003, P1.6 billion; in 2002, P865 million; and in 2001, premiums reached P578 million.
Eighty percent of total premiums sold are unit-linked or variable products (15 percent are single-pay), while the remaining 15 percent are spread out in traditional insurance products, group insurance, and personal accident insurance.
Madrid added that their high optimism is based on the fact that they are eyeing lower premium costs, opening products or undertaking product innovation to penetrate the C market. It has already been successful in penetrating the class A and B markets.
Pru Life UK will also increase its marketing activities with Citibank NA and the Hongkong Shanghai Banking Corp. (HSBC).
The Pru Life UK chief executive said that they will not close their doors on bancassurance. "We are still studying the bancassurance option quite seriously."
Regulations in the Philippines requires a bank to own at least five percent of an insurer prior to practicing bancassurance, or allowing insurers to tap the bank’s resources including its branch network and client base to sell its products.
Presently, bancassurance’s contribution to Pru Life UK’s total premiums is less than 10 percent of the total. It still relies on its agency network to sell its products. It has an agency force of 2,000.
"In the Philippines, the agency force is the principal reason for a good bottom line," Madrid pointed out.
Pru Life UK is recognized as being the first to introduce the unit-linked life insurance products, which is also known as variable life insurance products. The unit-linked or variable product is life insurance with an investment portion.
These insurance and investment products are invested in peso-denominated bonds, US dollar-denominated bonds, a balanced or managed fund (20 percent invested in the equity market and 80 percent in the bond market), and the growth fund (80-percent in the equity market and 20 percent in the bond market).