MANILA, Philippines - AIA Group Ltd. has declared its unwavering support to the Philippine American Life and General Insurance Co. (Philam Life) but challenged its subsidiary to outperform itself.
“AIA is excited about the Philippines, what with all the opportunities,” Mark Tucker, AIA Group chief executive and president, said in a press briefing yesterday.
AIA Group and its subsidiaries comprise the largest independent publicly listed pan-Asian life insurance group, with total assets worth $119 billion end May 2012, and an annual growth average of 29 percent.
Tucker however said that the insurer prefers to grow organically but did not close the prospects of any acquisition or merger opportunities. “We have all the resources to grow organically,” the AIA group head added.
Inspiring the mega regional player for the huge growth potential of the Philippines and Philam Life, is the unprecedented penetration gap in the country worth P21.7 trillion which is practically half of the gap of $41.4 trillion for the whole of Asia (ex-Japan).
That places the Philippines eight overall among the 13 countries where AIA is operating.
“Philam Life can create the demand, because there is real demand with the low penetration rate,” he pointed out.
Philam Life president and chief executive officer Rex A. Mendoza admitted that the challenge was staring at their faces, referring to not only the fundamentals presented.
“The amounts involved in the Anam scam were huge, and that likewise means that is the type of numbers we should be going after,” Mendoza said.
The Philam Life chief executive said that they are facing all the challenges squarely with the growth of new businesses, improvement in the quantity and quality of its 6,000 agency force, and the introduction of insurance products designed to met the demands of the insuring public.
“The distribution channels are aggressive but our selection is now selective to ensure quality, while are continuously enforce training and development. We have made operational more regional hub and new sales teams; and we establish new partnerships with banks, and non-bank financial institutions such as grassroots pawnshops,” he added.
New business reportedly grew by more than 26 percent in the first three quarter of the year, and total premiums grew by roughly the same pace.
That could mean estimated total premium income of P23 billion to P25 billion for 2012, since the 2011 total premium income was placed at P19.4 billion. In 2010, total premium income was registered at P17.2 billion.
However, unnamed Philam Life executives said that the October and November sales were extremely outstanding that it may change the average growth rate earlier reported.
“The numbers will be officially out next year, and you will be surprised,” the executives said.
Tucker, in his third quarter report said that strong contributions to annualized new premiums ANP growth were noted from Singapore, Indonesia and the Philippines and significant margin improvements in Hong Kong, Thailand and Malaysia.
“Consistent margin improvements were seen across both agency and partnership channels, as we continued to focus on the ongoing review of our product portfolio and the planned shift towards more profitable products.
Total premiums increased by three percent to $3.8 billion,” the group head said.
The Philam Life and Bank of the Philippine Islands (BPI) joint venture was also highlighted, which has been contributing significantly for the Philam Life group.
“More than 50 percent of BPI’s nationwide branch network of over 700, play host to Philam financial executives,” Mendoza said.