The Insurance Commission has released the ranking of the top Life Insurance Companies as of 2011 according to total premium income.

For the first time in its over 100 years of operations in the country, Canadian insurer Sun Life Financial emerged as the number 1 life insurance company beating the perennial leader Philamlife by a narrow margin of about 300 million in premiums. It will be interesting to watch out how the two largest life insurers will fare for 2012. Will Sunlife continue with its market leadership or will it be short-lived and concede it to Philamlife? My friends from both companies are all pumped up and this will be a good match to watch. Personally, I always believe that competition is good for everyone.

The French insurance company’s partnership with Metrobank continues to grow its Philippine business as Philippine AXA steadily holds on to the 3rd spot while Prulife of UK maintains its 2010 position as the 4th largest provider of life insurance in the Philippines. It is interesting to note that the revenue difference between AXA and PruLife is now only about 80 Million. Will we see changes in the 3rd and 4th ranking as well for 2011?

Insular holds its 2010 ranking of #5 but you will see that the Bancassurance partnership of BPI and Philamlife is closing in with only a 100 Million premium difference. The next 5 rankings are dominated by Bancassurance organizations which is an indication on how life insurance has been distributed in the past years.

2011 also shows the continuing shift of the types of life insurance being sold — from traditional policies to Variable Universal Life or Investment Linked plans. The deteriorating returns of interest rates seem to be a challenge for traditional life insurance plans to keep its marketability forcing buyers (and sellers) of life insurance to consider investment linked products even if they are not guaranteed.

While I’m ecstatic at the growth of the life insurance industry and I’m actually cheering on my friends in the industry, my issue has always been the same — there are not enough Filipinos with life insurance benefits. As of 2010, the Insurance Commission said that there are only 3.3 Million policies that remain in-force. 3.3 Million policies does not mean there are 3.3 Million Filipinos covered as many of those who buy life insurance will have multiple policies.  In the same report, the Insurance Commission disclosed that there were only about 315,000 new policies issued for the year 2010. My prayer is that growth in the life insurance industry should not just be limited to looking at premiums and we put the same passion into having more lives covered. Financial security given by a life insurance policy is very important to Filipinos as we are constantly faced with the uncertainties of life.

It’s great to see more and more life insurance companies taking a more active role in providing financial education which I believe is the real key to a sustainable growth for the whole industry. It’s just that we just need to do more, push more, teach more, advocate more and educate more.

My 2 cents.

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/