Pioneer Life shifts focus to variables

MANILA, Philippines - Pioneer Life Inc. will be placing greater emphasis on investment-unit linked insurance products next year, as the public’s appetite for investments increases while the low interest rate environment continues to prevail. 

“We have shifted our attention to the variables (or investment linked),” Rolando A. Robles, senior vice president and professional sales agency head for Pioneer Life, said. 

“Next year, it (sales portfolio) will be lopsided, it will be reversed. It should be 80 percent in favor of the variable products,” Robles added. 

The target total premium income for 2012 is P1.42 billion, or a growth of 19 percent from the P1.19 billion recorded last year. 

At the start of the year, its total portfolio is 80-percent traditional protection or insurance products and the balance of 20-percent investment-linked insurance products. 

Robles said that the third quarter sales alone reflect the real appetite of the market. 

“Our total premium income for individual life grew by 41 percent, and 35 percent of that were variables,” he outlined. 

Thus, the total portfolio after nine-months reflected 56 percent of the sales were traditional protection products and 44-percent variable products. 

“People are attracted to investments, what with the prevailing low interest rate environment, which is expected to continue,” the Pioneer Life senior vice president added. 

Last month, the insurer launched Pioneer Elite, which is a single-pay investment product with a lot of flexibility. The other variables are known as Enhance (regular premium), Embrace (single pay) and Essential (regular premium). 

Investments are placed in either equity or stock funds, balanced funds, which is a combination of fixed income and equity funds, and a US-dollar denominated fund. 

The equity fund has grown by nearly 27 percent if invested last year, or 12.4 percent if invested in 2007. 

The balanced fund, if invested last year, would have grown by nearly 20 percent or 16.4 percent if invested in 2009. The dollar fund ballooned to a whopping 12 percent if invested last year or 6.7 percent if invested five years ago. 

Pioneer Life is also selling group life insurance and microinsurance, the latter is targeted to hit one million policies this year worth roughly P100 million.