SINGAPORE – AXA Philippines rebounded strongly in the first three months of 2010 as new premiums rose 87 percent to P325 million, from P174 million in the same period last year.
Thus, total premium income in the first quarter this year grew to P1.41 billion, doubled from the same period in 2009.
In 2009, first year premiums crawled a mere one percent to P1.07 billion. In 2008, total premiums amounted to roughly P5.4 billion, placing it among the top five players in the country’s life insurance industry.
AXA Asia Pacific Holdings Ltd. regional chief operating officer Keith Perkins said they expected the Philippines to experience a slow recovery. “Confidence has returned to the market especially with the introduction of the principal guaranteed life insurance products,” he said.
AXA Philippines, the local unit of the France-based insurance giant, relied mainly on single-pay premiums and variable unit linked insurance products, which were affected heavily by the weakening of the equity and bond markets.
Perkins explained Metropolitan Bank & Trust Co. (Metrobank) took the conservative stance in marketing bancassurance products due to poor market conditions, last year. Metrobank is AXA Philippines' joint venture partner in bancassurance which involved the sale of life insurance products through the branch network of Metrobank.
This year, AXA will introduce innovative variable products other than the top performing guaranteed principal ones, as well as focus further on wealth management. Re-introducing traditional life products like whole life will likewise see its return in AXA Philippines’ portfolio, Perkins said.
One particular area it is strongly interested in is the voluntary retirement program mandated by the PERA (Personal Equity Retirement Act) legislation, which could spur the growth of insurance and retirement products.
In the immediate to medium term, AXA's network, which is based in Metrobank’s branches, plans to increase its bancassurance output. Bancassurance premiums reportedly accounted for more than 50 percent of total premiums.
The strengthening of its agency network is another important component for its continued effort to remain within the top five players in industry.
Life insurance as a percentage of gross domestic product (GDP) in the Philippines is a shade below two percent, the lowest in the region.
It is estimated that a little over 10 percent of the country’s population has one form of insurance. But the majority is either covered by government pension funds and group insurance. Roughly four percent of the 10 percent are holders of privately-issued personal life insurance.
Meanwhile, the Asia Pacific region is forecast to grow by an average 13 percent per annum in the next 10 years, and the Southeast Asian (SEA) sub-region between nine to 13 percent. The region likewise accounts for 11 percent of AXA’s total premiums.
In terms of new business, Asia expanded by 24 percent while SEA did better with 51 percent.