MANILA, Philippines - The Great Pacific Life Assurance Corp. (Grepalife) has reported an increase of 23 percent in total premiums after the first six months of 2009. From P1.81 billion in total premiums at the end of 2008 to an estimated P2.2 billion end June this year.
In terms of first year business, it grew by 28 percent in the same period.
“We are getting the good numbers, we are doing things right” Victor P. Quisumbing, Grepalife president and chief executive officer, said.
The key to Grepalife’s impressive numbers was sticking to selling traditional life insurance products, either through its agency force or practicing bancassurance.
Bancassurance basically means selling Grepalife insurance products through the branch network of a commercial bank. In this case, Grepalife sold its products through the more than 300 branch network of the Rizal Commercial and Banking Corp. (RCBC). Both Grepalife and RCBC are members of the Yuchengco Group of Companies.
In 2007, total premiums grew to P76.213 billion buoyed primarily by investment-laced life insurance products and the popular single-pay premiums.
However, the total premiums collapsed by 33.4 percent due to the poor investment climate brought about by the US-inspired credit crisis. Insurers that relied heavily on the variable or investment-laced products took a beating.
Grepalife refused to join the bandwagon preferring to stick to the time-tested traditional insurance products, and the results proved the insurer correct.
“This year, we launched term insurance, and we are getting good volumes; we are looking for five-year and 10-year convertible, renewable products,” Quisumbing said. “Its back to the basics, and traditional insurance is growing today.”
Grepalife is selling single premiums and term insurance through the branches of RCBC, but they are all traditional. “People like to know that they are buying protection,” he added.
Adding to the strong performance in the first semester of 2009, was expanding its influence to the more tedious salary deduction and group insurance market.
This year, Grepalife was able to corner the Philippine National Police (PNP) in its expanding salary deduction segment. Years back, the Philippine American Life and General Insurance Co. (Philamlife), the recognized industry leader for decades, cornered the teacher’s sector for the same business.
The insurer is likewise doing well in the group insurance business, which like salary deduction market, is tedious and numerous.
“We have a good network of rural banks, and savings bank that are involved in the business. We are one of the bigger players in that market,” Quisumbing, who is also the president of the Philippine Life Insurance Association (PLIA), said.
However, the nagging problem is not competition within the life insurance industry.
“Our (industry) real problem is that the penetration rate is still low. When things were good, people were looking at the investment-linked products. Unfortunately, they were also existing insurance policies, and were merely expanding their investments,” the Grepalife president lamented.
Life insurance companies cannot introduce insurance products that are attractive price-wise to the lower-income segment of society, as the premiums are dependent on limited investments dictated by law. Likewise, the tax burden slapped by government on life insurance policies makes it unreachable to broad population.