Educate the market to ease crisis jitters

Educating the market is the best shield for insurance agents to cope with issues hounding the industry, hitting the world's largest insurer, the American International Group (AIG).

This according to Life Underwriters Association of the Philippines (LUAP-Cebu) former president Jesus Esma Jr. adding that "transparency of the company is necessary to assure policy holders, new and existing, that their investments are well secured."

Esma, who manages the Cebu Esma Agency of the Philippine American Life & General Insurance Co. (Philamlife), admitted that some Filipinos are now reluctant to invest in insurance policies in the midst of the credit crisis in the United States, which affected Philamlife's mother company —AIG.

"Update your policyholders from time to time. Explain to them the current status of the company and the measures done to counter the crisis," he advised insurance agents.

Financial planners, and not "mere" insurance agents are what many people need these days, Esma stressed.

He explained that a financial planner is a professional who helps clients prepare their financial plans by providing financial solutions, choices in managing money and wealth management to achieve the client's short-term and long-term financial goals.

By becoming effective financial planners or consultants, insurance agents will be able to change the Filipinos' perspective of the insurance industry, said Esma.

Esma also echoed Philamlife President Jose Cuisia Jr.'s optimism that the troubles facing the world's largest insurer-- AIG, will not affect the local operations of the insurance company. 

Cuisia said that Philamlife has a "strong capital base and has maintained a very conservative investment policy." 

Philamlife has a capital base of P1.65 billion as of December 2007, topping all 36 insurance companies operating in the Philippines, a report in the website of the Insurance Commission said.

Philamlife is currently the largest life insurance company in the Philippines. Its total assets of P108.3 billion as of December 2007 account for one-third of the entire industry's P367 billion.

"We make sure that every investment we make is approved by the regulator and they also make sure that these investments are intended to meet the obligations of the local company to its policy holders," said Esma

In a separate interview with Connie Nazaro, a life insurance consultant in Cebu, she said a jittery market is a “normal reaction” to AIG's recent ordeal from the impact of the bankruptcy of US investment bank—Lehman Brothers.

Nazaro believes that if agents will actively reach out and educate the market as well as existing insurance policy holders, healthy insurance industry in the Philippines can be easily sustained. —Ehda M. Dagooc