PhilAxa Life registers P9-B premium income

The Philippine Axa Life Insurance Corp. (PhilAxa Life) has broken the P9-billion premium income barrier last year. PhilAxa is a joint venture between the Metropolitan Bank and Trust Co. (Metrobank) and Axa of France, one of the biggest global financial institutions.

It is the second life insurer in the Philippines, after the Philippine American Life and General Insurance Corp. (Philamlife) which achieved the feat in 2003.

From a premium income worth P4.59 billion in 2005, PhilAxa Life reported premium income for 2006 ballooning to a whopping P9.06 billion, for a 97-percent growth rate.

Thus, PhilAxa Life dislodged Sun Life of Canada Philippines Inc. (Sun Life) in second spot behind perennial leader Philamlife.

Sun Life officials reported a premium income worth P8.8 to P8.9 billion in 2006 thus slipping to third spot overall among the 36 life insurance companies registered with the Insurance Commission (IC). Its premium income was recorded at P8.1 billion in 2005.

Philamlife has not made any official pronouncements regarding its premium income last year. However, unnamed company officials estimate that its premium income would likely grow between four to six percent, or from P12.3 billion in 2005 to roughly P12.7 billion in 2006.

The Metrobank-allied insurer said that its unaudited net income in 2006 grew to whopping P540 million, from a mere P87 million in 2005.

Annualized new business grew by 69 percent, or from P7212 million in 2005 to P1.22 billion last year. It was the first time that the life insurer recorded new business surpassing the P1-billion ceiling.

That has placed PhilAxa Life as the best performing AXA company in the Asia-Pacific region in terms of growth, company officials said.

The original 2006 premium income target of the insurer was P6.5 billion from the P4.5 billion in 2005. But by the second semester of 2006, it became clear that it was going to surpass earlier targets.

"The biggest challenge now for PhilAxa is how to sustain strong growth in premium and net income this year," senior officials said. "It may not be as strong as 2006 but definitely strong enough to retain the second leading insurer position."

In an earlier interview, PhilAxa Life president and chief executive officer Andrew D. Alcid described 2006 as a clean-up year, forecast 2007 as a period for further consolidation of its gains, but classified 2008 as the turning point.

No doubt, the strategic goal of PhilAxa Life is to dislodge Philamlife as the country’s leading life insurer in terms of premium income.

The key to insurer’s strong performance in the past years, was the practice of bancassurance. Bancassurance is basically an alliance between a life insurance company and a commercial bank.

The commercial bank must own equity of at least five percent of the insurer. With that arrangement, the insurer gets the right to market its insurance products through the bank’s branch network including its clientele base.

It is allowed to design products complimenting the products of the bank, making the business endeavor profitable for both financial institutions.

Metrobank is the country’s leading commercial bank in terms of assets and branch network. It has over 500 branch nationwide.