Pioneer Life funds up 18.2% in June

MANILA, Philippines - The equity fund linked to the life insurance products of Pioneer Life Inc. has been posting an 18.21 percent year-on-year return as of end June 2013.

Year-to-date returns stood at 8.02 percent, while in a three-year compounded annual growth rate (CAGR) the fund reflected an impressive 24.51 percent. For a  five-year CAGR, it reflected a return of 20 percent.

In fact, the fund itself grew by 155 percent, or from P316.21 million to P805.16 million from December 2012 to June 2013.

Pioneer Life investment funds is managed by Deutsche Bank AG Manila, led by its chief investment officer Frederico Ocampo, who was voted by Asset Management magazine as Chief Investment Officer of the Year in 2011 and 2012.

“The Pioneer Equity Fund is invested solely in stocks of carefully selected local companies.  That it is a well-managed fund is confirmed consistently by its outperforming of benchmarks through different market cycles,” it said in a statement.

Access to Pioneer Life’s equity fund occurs when an individual or group acquires a variable unit linked life (VUL) insurance products, which has an investment portion. In order words, one can acquire a life insurance policy for protection as well as set aside a certain amount, which is invested in a fund, such as the equity fund.

Pioneer Life also has a managed or balanced fund and a dollar-denominated fund, two other options for investments from clients buying VULs.

Last year, the life insurer reported total gross premium income of P1.44 billion, 21 percent higher than the P1.19 billion.

Key to the sustained growth pace was the strong sale of its variable or investment-linked life insurance products.

Pioneer Life senior vice president for professional sales agency Rolando A. Robles said that timely introduction of investment-linked products, the surge of market, the changing mindset of clients, the suspension of traditional insurance products in the last quarter of 2012, and the higher sales volumes of the single pay variant of the variables connived to boost sales last year.

Robles said 80 percent of premiums sold last year were traditional policies or pure protection insurance, with the balance coming from VULs.

“Next year, we see our VUL products covering 75 to 80 percent of sales as people shift to these products,” he said.

Strong economic conditions, equities market and the gradual demise of the special deposit accounts (SDA) have created a favorable condition for the rapid expansion of insurance and VULs. Other industries that are likewise benefiting from the strong fundamentals are the unit investment trust funds (UITF), mutual funds, the equity market, and the property sector.