Penetration of retail market still low, says Pioneer Insurance

MANILA, Philippines - The challenge of the country’s non-life insurance industry is penetrating the retail market. 

Pioneer Insurance & Surety Corp. (Pioneer Insurance) president and chief executive officer David C. Coyukiat said that the retail and the microinsurance market remains grossly un-served or under served. 

“We are rethinking our strategies and distribution networks,” Coyukiat said. 

Pioneer Insurance, which ranked sixth last year in terms of premiums earned, has a customer mix of 90-percent commercial and just 10-percent retail. 

The non-life insurer has designed and written non-life products, which are aligned with the microinsurance strategies of subsidiary Pioneer Life Inc. Pioneer Life is one of the few life insurance companies in the Philippines that are serving the microinsurance market. 

The tragedies and destruction brought about by typhoon Ondoy and the escalating number of natural catastrophes has increased the awareness of the need for protection of life and property. 

The commercial market is saturated what with all 82 non-life insurance companies scratching for a share of the pie. 

Pioneer Insurance is, in fact, the acknowledged leader in the marine and hull segment. The motor insurance segment is the most saturated with majority of the players seeking a piece of the action. 

It is targeting a modest 14- to 15-percent growth in gross premiums to P4.3 billion this year, from the P3.8 billion recorded in 2011. In 2010, gross premiums hit P2.7 billion, and P2.1 billion the year before. 

It recorded an equity or net worth of P6.5 billion, and assets worth P11.5 billion. 

Net income stood at P105 million and paid up capital stood at P300 million, almost twice the minimum capital required for 2011. 

Pioneer Insurance is considered a “supermarket” type, or a non-life insurer with a wide array of protection products for fire, hull/marine, motor, general accident, cargo, engineering, aviation, migrant workers, bonds, and personal accident (PA). 

Biggest contributor to Pioneer’s gross premiums is its fire line, which accounts for 53 percent of its premiums. Hull and motor accounts for 13 percent and 12 percent, respectively. 

Meanwhile, claims paid grew to P630 million last year, or 28 percent more than the P397 million in 2010. 

Majority of the claims made were in the motor insurance or roughly 60 percent of total claims.