Source : Insurance Commission

The Insurance Commission has released its report on the performance of life insurance companies as to New Premiums. The list includes First year premiums or FYP plus all Single Pay Premiums. FYP indicates the amount of new life insurance sold for a particular year and life insurance companies make sure that there is a steady flow of new business coming in their books to ensure their viability, market share and ultimately, profitability.

The Insurance Commission reports combined all new premiums, FYP & Single Pay into one report. Single pay premium are life insurance policies that require no further payment of premiums and are already fully paid. Customarily, many companies report single pay premiums only at 10% in their books and I believe the Insurance Commission should do so as well.

You will notice that 11 out of the top 15 companies sell a lot of Variable Insurance, this are insurance policies that have investment funds attached to it. Bulk of the premiums being brought in the form of variable insurance. In principle, variable insurance premiums are largely investment funds and in the strictest sense, not really insurance premiums… but let’s leave that with the Insurance Commission. Some refer to variable insurance as Unit-Linked or VUL. Further, insurance companies with Bank partners under a Bancassurance arrangement are getting a big pie of the share of premiums. In fact, a substantial amount of new premiums being generated for the past couple of years are coming from Bancassurance and through the sale of variable insurance.

Some tidbits that might be interesting enough to mention. Sun Life shows impressive performance even without a Bancassurance partner although they have recently bought half of Grepalife so one can be assured that their numbers will change next year. Insular Life is the only purely Filipino company in the top 5 category. Prulife is registering phenomenal growth in the new business arena largely through the sale of variable insurance. Philamlife’s agency operations tries to remain strong and continues to perform despite challenges. Generali Pilipinas, despite having a strong banking partner, BDO slips in the new business race with their decision to discontinue selling single pay premiums.

With the obvious growth of Bancassurance, what is the future of tied-agencies (exclusive agents of companies)? Seems there must be some re-learning, re-training and re-engineering that needs to be done for tied agencies if they are to survive the onslaught of changes. Personally, I believe the role of tied-agencies is very critical to the sustainable growth of the life insurance industry — agents can do better financial planning and can maintain stronger relationship with clients so I’m really rooting for them. But, both Bancassurance and tied-agency system can work together and provide financial security for Filipinos.

Off hand, I think the life insurance industry is doing a good job of providing financial security to Filipinos, such a herculean task. My only concern is scale — reports shows that way below 1/5th of the family heads of the country has some form of insurance. Growth in premiums may not necessarily mean more people are being insured. Any growth in new lives being insured is dwarfed by the increase in population.

My dream for this institution, and to all the other financial institution is this : sell less, and educate more — and the business will just flow.

My 2 cents.

The 2010 Top Life Insurance in total Premiums are here https://www.randelltiongson.com/top-life-insurance-of-2010-my-thoughts/

The Insurance Commission has released the ranking of the Life Insurance Industry for 2010 according to revenue or total premiums.

Philamlife keeps its lead in the pack its lead over the Canadian insurer Sun Life is a narrow one with only a 600M lead. 2011 will be an eventful year for 2010’s 2 largest life insurers. Ayala Land’s Rex Mendoza took over the leadership of Philamlife as its newest CEO. Rex Mendoza was Philamlife’s former EVP and the President of Philam Asset Management (PAMI) prior to his transfer to Ayala Land in 2005. Sunlife, on the other hand has acquired substantial ownership of Grepalife & will soon launch a Bancassurance partnership with RCBC. The heat is on between these two and 2011 would be an interesting year to watch.

2010 also saw the dislodging of Insular Life by Axa Life as the 3rd largest insurer in terms of premium income. Further, Prulife UK also gains ground and also overtakes Insular by landing in the 4th place.  Canadian insuerer Manulife improves a notch and lands on the 7th place. The Italian insurer & BDO partnership Generali Pilipinas slides to the the 10th spot from its 7th slot in 2009.

Many of the top insurers sells market driven products and it seems that the robust market of 2010 seems to have helped the industry. In contrast, Generali Pilipinas decided to discontinue selling single pay products and focus on the more profitable regular pay products.

While there has been some growth in the life insurance industry, a bigger concern is the minuscule number of Filipinos being insured as compared to our growing population. We still have a very low percentage of insured population which is a tragedy as insurance is a very important tool for risk management and long term savings.

Unfortunately, insurance products are still being pushed and peddled although I know there have been vast improvements on the competencies of intermediaries. It’s just that we need to get all insurers & intermediaries on board and consider the advocacy of education first and foremost. I encourage the insurers and those selling insurance products to try harder in educating the Philippine market on the merits of financial planning — herewith is the key that will unlock substantial & sustainable growth for the industry.

My 2 cents.