THE insurer Pru Life UK claimed the lead spot in the industry based on premium income as of end-2015.
Citing the Tentative Ranking of Life Insurance Companies released recently by the Insurance Commission (IC), Pru Life UK President and CEO Antonio Manuel de Rosas said the local subsidiary of UK-based financial services group Prudential Plc. ranked fifth in the roster with aggregate premium of P19.8 billion as of December 31, 2015.
Sun Life of Canada (Philippines) topped the list, with P32.8 billion, followed by Philippine AXA Life Assurance Corp., P22.8 billion; Philam Life & General Insurance Co., P21.2 billion; and BPI-Philam Life Assurance Corp. Inc., P20.8 billion.
He noted they could have ranked higher at No. 3 had the global standard for computing performance was adopted in the country.
“According to accounting and actuarial standards internationally, single premiums should be weighted at 10 percent only, not 100 percent. Why? Because single premiums are just investments,” the top executive told reporters at the launch of Prulink elite protector 5, a limited-pay investment-linked life-insurance product that integrates comprehensive protection with a greater opportunity for wealth accumulation.
A single premium, Rosas explained, is referred to as a onetime payment that a policyholder gives to his insurance provider.
“We invest this in a fund and they can withdraw anytime. So that’s why we only assign 10 percent [in the computation],” he said.
Following this internationally acceptable standard, Pru Life will have a total weighted premium of P10.7 billion, thus moving up two notches in the IC ranking, next only to Sun Life, at P19.4 billion; and Philam Life, at P14.1 billion.
The company will still be at the same position even if the total weighted premium of insurance companies and their bank assurance partners were combined.
For instance, Sunlife and Sunlife-Grepa’s consolidated overall weighted premium basis amounted to P22.6 billion, making them No. 1 in the rankings.
Philam and BPI-Philam would follow, with a combined total weighted premium of P20.6 billion.
At fourth place would be Manufacturers Life Insurance Co. (Phils.) Inc. Manulife) and Manu-Chinabank at P9.7 billion.
With consolidation of the overall premium income of insurers as stated in the IC ranking, Pru Life UK would rank fourth, with P19.8 billion, as the latter take the fifth place at P18.8 billion.
Claiming the top 3 rankings will be Sunlife and Sunlife-Grepa, with combined total weighted premium of P42.96 billion; Philam and BPI-Philam, at P41.97 billion; and AXA at P22.8 billion, respectively.
De Rosas noted Pru Life UK’s strong business despite being younger than other big players.
This was evident in the IC report based on net income, ranking the company No. 3 with a bottom line of P1.8 billion, next only to 68-year-old Philamlife (P7.5 billion) and over a century-old Manulife (P4.3 billion).
“Usually, insurance companies that are start-ups incur a lot of costs and usually going to a negative position. When an insurance company has been around for many years, they generate a lot of profits,” he said.
This was because a new player would still have to pay commissions for insurance agents, while their older counterparts do not as their insurance policies have been already existent for many years that, in turn, translate to a lot of profits, he further explained.
Pru Life UK is among the industry players in the Philippines that observes the international standard of computation for single premiums at 10 percent.
De Rosas said they have lobbied at the IC to implement this industry-wide.
“We actually raised it to them already many times, because we’re the only country that’s still not following [this]. But we haven’t heard any feedback from the Insurance Commission,” he said.
“Since they like to do total premiums on a rank basis, why not assign 10 percent as they should. Everybody in the world is assigning 10 percent to single premiums. That’s the only change we want,” he added.
As for its benefits, he said this will “encourage sales of regular premiums” and, at the same time, the industry total premiums will “continue to grow.”