Sun Life sees return to 2007 levels

MANILA, Philippines - The entry of Rizalina G. Mantaring as new chief executive officer and president of Sun Life of Canada (Philippines) Inc. has come at very challenging times.

And retired chief executive Henry Joseph Herrera fulfilled his dream of retiring early and entering the academe.

Sun Life reported a 35.1 percent drop in total premiums last year, or from P13.1 billion in 2007 to P8.5 billion. After controlling a market share of 17.2 percent in 2007, it slipped somewhat to 16.8 percent last year.

The only bright spot last year, was that Sun Life reclaimed second spot overall among the 32 or so life insurance players. It had been a consistent member of the top five for a significant number of years behind industry leader, the Philippine American Life and General Insurance Co. (Philamlife).

Sure, the entire industry was likewise in a depressed state last year contracting by 33.4 percent as no one was spared from the onslaught of the US-inspired global financial crisis.

Total premiums shrunk by 33.4 percent to P50.698 billion last year from the record level of P76.213 billion in 2007.

In fact, the top 11 players reported total premiums decreasing by 34.1 percent to P46 billion last year from P69.9 billion in 2007. The top 11 players account for roughly two-thirds of total premiums.

Undaunted, the new CEO said that Sun Life expects to attain the 2007 levels in terms of total premiums by 2010.

“We expect to grow by 20 percent between now and 2010,” Mantaring told The STAR.

She said that the premiums and activity ratio, so far, has been higher than in 2008.

“Premiums are actually tracking higher than last year, and the second quarter reflected a turnaround,” she added.

To achieve this, Sun Life’s 3,000-strong agency force must overachieve itself despite still undergoing intensive training to raise its quality standard. The entire region, in fact, had initiated a training program since last year.

The strategic goal, of course, is to be the top insurer within the next three to five years.

And it was clear to the former regional chief operations officer of Sun Life Financial Asia that alternative distribution channels was the key ingredient.

Mantaring was confident that Sun Life can be number one without sufficient alternative distribution channel.

“But to sustain or maintain the top spot, we need a strong alternative channel distribution system,” she admitted.

That means, among others, bancassurance and direct marketing.

Bancassurance means entering into a strategic relationship with a commercial bank. Thus it allows the insurer to sell insurance products using the bank’s branch network and tapping its base.

Under regulations of the Bangko Sentral ng Pilipinas (BSP), bancassurance can be practiced as long as the commercial bank owns at least five percent of the insurer.

Philamlife, Insular Life Assurance, AXA Philippines and Ayala Life are already practicing bancassurance in varying degrees. In fact, bancassurance products outsold the traditional insurance policies in 2007.

While in search for the appropriate bank, Sun Life is looking at other alternatives. “We are also trying to think out of the box,” Mantaring said.

In Indonesia, for example, Sun Life has 13 bank partners where it practices bancassurance. Of the total, Sun Life has a physical presence four. “The rest we are just partnering in the bank through lead generation.”

Sun Life is likewise aggressively expanding to areas outside of Metro Manila and other regions. It is also introducing new products, re-tooled traditional life products, and introduced new products that fit the budgets of the lower income groups.

Mantaring also assumes the post of president of Sun Life Asset Management Co. Inc. (ASLAMC) and chairperson of the Sun Life Prosperity Funds.