AXA premiums breach P10-B barrier in 2011

MANILA, Philippines - AXA Philippines, a joint venture between the Metrobank Group and financial giant AXA Group, has reported a gross premium income of P10 billion in 2011.

That is 19 percent higher than the P8.4 billion registered in 2010. In 2009, premiums were already competitive P4.4 billion.

 The AXA Group is one of the world’s largest financial protection and wealth management company, servicing more than 95 million customers in 61 countries.

 AXA Philippines ranked third largest in terms of premium income in 2010, and fourth in the same category in 2009. Unofficially, AXA Philippines’ 2011 gross premiums should land it third best among the 33 life insurance companies licensed by the Insurance commission (IC).

 However, AXA president and chief executive officer Severinus P.P. Hermans said that the ranking is the least of their concern this year.

“We want to do a good job, offer quality products with quality service from our trained financial advisors and sales force, meet the objectives of our stakeholders, and attaining the top spot could just fall in place,” Hermans said.

Of the total premiums sold last year, half are classified as regular insurance or purely protection products while the remaining half are single pay premiums and unit-linked products, or life insurance with an investment segment of the policy.

That is a stark improvement from the middle of the decade when more than 80 percent of its products are single pay.

That means that recurring business is just a fraction of total. Recurring business are generally regular or traditional protection products that are payable in tranches over a number of years. Thus, premium income is assured for the insurer over a period or time.

In fact, AXA Philippines’ gross premiums are now 40-percent recurring and the rest are new business.

From a persistency rate of as low as 15 percent in the middle of the decade, Hermans claim that it has vastly improved to 79 percent. Persistency rate is the percentage of contracts or policies that remain in force, or are not terminated or lapses, during a specified period of time.

Meanwhile, the agency force generated 38 percent of total business, while its bancassurance distribution channel accounted for 16 percent.

In terms of new sales, 2/3 were generated through the Metrobank channel, while the remaining third through its agency force.

 AXA Philippines manages 500 financial executives (FEs), 50 are managers while the rest are actually fielded in the branch network of Metrobank. It also has established a relationship with 80 (IMDD) or investment specialists who are employees of Metrobank but share their expertise as financial advisers or private bankers for clients of AXA.

Its agency force stand at 1,489 at the start of 2012 from 700 in 2009, to 2,000 end 2012.