AXA bags P1-billion new sales in 2008

MANILA, Philippines - Despite the financial crisis that hit the global economy last year, AXA Philippines was able to gain over P1 billion in new business sales.

With a total of P1.022 billion in new business sales, AXA Philippines is only one of two insurers breaking the P1-billion mark in a single year.

“Considering the market conditions that we had last year, hitting P1 billion is quite an achievement,” Indren S. Naidoo, chief financial officer of AXA Philippines, said.

As in previous years, majority of its new business came from its bancassurance channel, which contributes to over 70 percent of the business, as AXA continues to tap the expansive network of Metro-bank branches nationwide.

Traditional agency sales force accounted for 20 percent of new business, and its alternative channels sales force, which handles group and institutional business as well as direct marketing and telemarketing efforts, makes up for the balance nine percent.

AXA, who is currently the country’s undisputed market leader in variable life insurance with over 40 percent market share, had a total premium income of P5.4 billion last year, primarily due to the lesser demand for single-premium investments as brought about by the tough investment environment. Total premium income in 2007 was P16.3 billion.

“In the start of 2007, people were feeling pretty bullish about the investment market, and hence AXA had a lot of customers who opened a lot of single-premium policies,” explains Naidoo. “However, since the sub-prime crisis, less people have had the confidence to invest lump sum amounts in any financial instrument, whether it be in insurance, mutual funds, or UITFs.”

Nonetheless, AXA Philippines is looking forward to 2009 including the new challenges and opportunities.

Newly-installed president and chief executive officer Rien Hermans said that AXA Philippines will grow the business in a more strategic and sustainable manner.

“In the past few years, the phenomenal upsurge in the variable life or investment-linked insurance category was the main driver of the growth for the life insurance industry — and we were happy to note that AXA led the way in the growth of that category,” Hermans said.

He explained that the fundamentals of the business haven’t changed, as people still want to protect their loved ones, save for education of their children, and prepare the financial resources to enjoy their retirement.

Given the current investment environment however, most people prefer the guarantees in traditional products over the higher expected returns of variable products.

The new AXA chief executive said that the three key business drivers are: achieving optimal synergy with its bancassurance partner, Metro-bank; developing new and innovative products to closely fit our customer’s needs and preferences; and continuous improvement in the quality of our customer service.

“These combined with our growth initiative of building a strong and professional network of financial advisors promises a great future for the company,” he added.

AXA Philippines is a joint venture between two financial giants — the Metrobank Group and the global AXA Group. The Metrobank Group is the largest financial conglomerate in the country while the AXA Group is considered the world’s leading life insurer and the 15th largest corporation in the world, across all industries.