Philamlife premiums higher by 16% in ’07

MANILA, Philippines - The Philippine American Life and General Insurance Co. (Philamlife) on Wednesday reported a 15.9% growth in gross premiums in 2007, primarily as a result of the public’s growing preference for investment-linked insurance products. Gross premiums — from new life insurance policies, bancassurance products and single-premium insurance products —totaled P22.7 billion last year. "Sales of our single premium variable life products surged, fueled by aggressive agency and marketing initiatives, and a strong market preference for investment-type products," said Jose L. Cuisia, Jr., Philamlife president and chief executive officer, in a press conference Wednesday. "Variable life," "investment-linked" or "unit-linked" insurance refers to insurance products that allow policyholders to get dividends from their fixed-income or equity placements, on top of guaranteed insurance coverage. Variable life insurance has become the main growth driver of the life insurance industry in recent years. Industry observers are expecting an almost threefold-growth in the variable life insurance business amid the lackluster performance of the traditional life insurance business. Single premium life products are those that must be paid at one time, rather than on an installment basis. Mr. Cuisia said the sale of single premium insurance products amounted to P5.4 billion in 2007, for a growth of 102% from the previous year. Bancassurance—insurance products sold by banks—contributed P1.2 billion in total premiums. Life insurance operations, meanwhile generated P7.4 billion in new business or new policies, 57.6% higher over 2006 levels. "Our distribution reach and attractive products have also given us an edge over our competitors," Mr. Cuisia said. "We also focused on other distribution channels such as telemarketing and direct marketing." The company’s consolidated assets stood at P170 billion, up by 4.4%, while net income adjusted for foreign exchange fluctuations was up by 15.8% to P4.8 billion. Meanwhile, Philam Asset Management, Inc. (PAMI), Philamlife’s mutual fund arm, said assets under its management reached a record-high of P21.9 billion last year from P19.49 billion in 2006. Karen Roa, PAMI president, said PAMI’s funds achieved good returns for its more than 30,000 retail and institutional investors. GSIS Mutual Fund; Philam Strategic Growth Fund, which is invested in equities; and Philam Fund, which is invested in a combination of stocks and fixed-income instruments, all posted yields of around 20%. The Philam Bond Fund and the Philam Dollar Bond Fund, which are invested in fixed-income securities; and the AIG Global Bond Fund Philippines, which is invested in a portfolio of sovereign debts and high-grade corporate bonds posted yields of around 5%. - Gerard S. dela Peña, BusinessWorld