Insurance firm to address ‘misconception’ to increase low penetration rate in Cebu

AXA Philippines is banking on education to increase the nine percent insurance penetration rate in Cebu.

The company hopes to correct the public’s negative perception of insurance.

“The misconception is still there and this remains to be a challenge in growing the insurance industry,” Axa Philippines zonal head for Cebu BJ Joseph Legaspi said in a recent interview.

Legaspi said this “faulty understanding” of insurance also explains the low penetration rate in the Philippines.

“The lack of education is a factor. But culture could also be one. Sometimes we are guided by wrong priorities, we are influenced to have our house, business and car insured before getting life insurance, which should be the topmost priority,” he said.

Legaspi said part of their strategy to grow the insurance base here is to tap the growing middle income market, particularly those employed in the business process outsourcing (BPO) sector.

He said they have also improved their customer service to build up sales, through segmenting the market according to their distinct needs.

Axa Philippines currently caters to three market segments, which includes the easy and affordable solution; the personalized solutions and wealth management.

Employees from the BPO sector can take advantage of the company’s easy and affordable solution, he said.

Legaspi said the company’s biggest portfolio, at 70 percent, comes from the wealth management segment. He said most of their clients in Cebu belong to this category but are classified as short-term investors of three to five years.

“Making wise investments is one way to ensure that we are able to provide our needs to maintain our standard of living when we get older. Wise investments are also the best way to provide a secure and comfortable future for our family and loved ones,” said AXA Philippines chief marketing officer Amor Balagtas.

AXA Philippines is a joint venture between the Metropolitan Bank & Trust Co. (Metrobank) and AXA of France, one of the world’s largest insurance and financial institutions. In 2011 the company reached P10 billion in total premiums with a net profit of almost P1 billion.

Axa Philippines started its operations in 1999 and is one of the top providers of life insurance with a market share of 30 percent. The company ranks third in the industry based on total premiums, serving more than 100,000 customers, with more than P30 billion under management.