Tuesday, October 14, 2008 RP insurance industry hits slow phase due to US financial crisis
THE financial crisis in the United States is affecting various sectors in the Philippines and is preventing many Filipinos from buying insurance plans.
The situation has resulted in a slowdown in the local insurance industry this year, said Philippine Life and General Insurance Co. (Philamlife) president and chief executive officer Jose Cuisia Jr.
But Cuisia noted that there are those who still buy insurance even when the international market is down because they understand the importance of investing in such instrument.
“They must be willing to take a long-term perspective in order to avail themselves of the benefits our product offer,” he said.
Philamlife continues to tap the low-, middle- and high-income individuals and families that want to avail themselves of such protection-type, investment-link products, which provide financial stability amid crises.
Philamlife offers a comprehensive range of life and general insurance products that provide protection, savings,
investments, education, accident, health, property and casualty coverage.
Philamlife, an American International Group (AIG) company, experienced double-digit growth in 2007 and in the early part of this year, said Cuisia.
About 77 percent of this growth can be attributed to the contributions of policyholders of variable life products, like the AIG Asset Builder, because of their higher yields.
Small market
As of Dec. 31, 2007, Philamlife had consolidated assets of P170 billion. Revenues went up to P36.7 billion, reflecting a 14-percent growth from a year ago.
Cuisia said that only less than 10 percent of the country’s more than 90 million population availed themselves of long-term investments, such as insurance, because majority of Filipinos do not see it as a priority. In developed and even in developing countries, however, about 30 to 40 percent have insurance policies.
He said that when several companies opened up insurance businesses in the country, they realized that the market is small even with a very large population.
“But there is still room for growth for the insurance industry in the country. We should do a lot more to educate people about the importance of insurance,” Cuisia said.
Cuisia was in Cebu last Saturday to talk with the local media and assure policyholders, including seafarers, that their interests are protected even with the AIG’s decision to sell Philamlife to pay off an $85-billion loan from the US Federal Reserve.
He said the bulk of the company’s invested assets is concentrated on “marketable and liquid” Philippine government securities, corporate bonds and blue chip equities. (NRC)
