WEDNESDAY, 14 DECEMBER 2011 19:51 JUN VALLECERA / REPORTER
Article from Business Mirror
THE low interest-rate environment has made investing on the part of ordinary Filipinos relatively unattractive and prospects of yet another year of low interest rates has made the life insurance industry’s investment-linked products harder to sell than ever, going forward.
As a result, the Manila unit of Pru Life UK under Antonio de Rosas as president has deliberately focused on pushing the protection features of its products in a bid to gain more market share and rise in rank as top-performing insurance outfit in the Philippines.
According to de Rosas, most life insurers in the country, Pru Life UK included, have shifted focus by emphasizing the protection features more than the investment aspect of insurance policies.
“If we give too much emphasis on selling investment-linked insurance then our premium sales could fall. If alternately we focus on selling protection, premium sales could still fall next year but likely not as much,” the insurance executive said on Wednesday.
He acknowledged the low interest-rate environment at present has forced clients to move into variable universal life insurance or VUL and its built-in investment features “because it is very hard to guarantee benefits to potential clients if our agents push the pure traditional insurance product.”
It is not only Pru Life UK that has made the shift but the other insuring brands as well, he added.
For Pru Life UK which has not benefited from a bancassurance alliance with any of the local universal banks, the challenge require them to hire more agents by next year so as to sustain the growth momentum achieved in the first nine months in terms of first-year premium sales.
Increasing the company’s agency force typically require hiring 30 percent more agents than previous.
De Rosas reported having generated first-year premium sales worth P6.3 billion in the first nine months, which was 77 percent higher than in 2010.
Its total premium sales during the period also stood higher than year ago total of only P5.2 billion to P8.1 billion.
This was even higher than Pru Life UK’s 2010 total premium sales worth only P7.8 billion, de Rosas said.
He worries that 2012 “could prove to be a different ballgame” as uncertainty hangs over financial markets not just in the Philippines but in overseas markets as well.
De Rosas said Pru Life UK is hobbled by their lack of a bancassurance partner unlike competitors like AXA which has Metrobank or Sun Life which has the Rizal Commercial Banking Corp.
He said they have actively sought bancassurance partners but have not been successful because the big universal banks already have partners and the smaller universal banks were more interested in building so-called CASA accounts so as to gain rank.
Ranks are important in that this is linked to the ability to attract more deposits and by extension the ability to lend and make more money.
“Most everyone is married and the rest do not want to dance,” de Rosas complained.
Article from Business Mirror
