Olaf Kliesow: Prospects bright for Philippine insurance industry

Compared to more developed countries, the Philippines’ insurance industry is still relatively young, with a low penetration rate – defined as the insurance sector’s contribution to gross domestic product – of only 1.6 percent in 2016.

MANILA, Philippines — As such, the Philippine Life Insurance Association Inc. (PLIA), one of the leading insurance groups in the country, is persistent in its efforts to capture the untapped segment of the market.

This year, the group decided to shake things up and tap  German national Olaf Kliesow, president and chief executive officer of Allianz PNB Life Insurance Inc., to become the  new president of PLIA.

Kliesow is the first non-Filipino  leader of  the PLIA, the  umbrella organization of 30 life insurance firms operating in the country.

He brings in almost two decades of experience and global perspective to the local life insurance business, having served insurance companies, including Allianz SE, in different countries all over the world.

A law graduate from the University of Bonn in Germany, Kliesow spent majority of his 20-year career in the finance consulting industry, working in top management position of companies from Germany to Japan and now, the Philippines.

The new PLIA president said  the switch from  law to insurance came naturally to him, and in 2000,  Kliesow  made the big leap when he accepted an offer to work for an  insurance firm in Japan.

“It was a great opportunity for me to combine two things — work in Japan and set up an insurance company.  I was   working then as a lawyer for a financial consulting company, so a number of our clients were from the financial industry. And one them at that time was Allianz,” he said.

In  2010, Kliesow was promoted to head the Allianz Life Japan. He worked there for another three years, before he returned to Munich, Germany in 2013 to lead the Global Life and Health Business Development group of Allianz SE. 

In June 2016, the lawyer-turned insurance executive moved to Manila to head the local operations of Allianz, which just returned to the local market after a 12-year hiatus by acquiring 51 percent of  PNB Life Insurance Inc. – one of the  biggest life insurers in the country.

“For Allianz, this is my third assignment. The first one was heading the life operations in Japan, and then I went to Munich to head the life department. And then one and a half years ago, I came to the Philippines,” he said. 

This was not an easy task for Kliesow as Allianz  was starting again to  make its presence felt in the local insurance arena.

To gain a stronger foothold in the local market, the German insurance giant entered into a 15-year exclusive distribution or bancassurance partnership with the Philippine National Bank, which now serves as its main distribution channel through the bank’s 660 branches nationwide. 

Despite a hectic start, Allianz PNB Life immediately emerged as the 13th largest life insurance firm in the country with a total premium income of P2.71 billion in 2016. It also reported a net income of P263.97 million during the same year.

Kliesow is confident Allianz PNB Life will continue its ascent toward the group of 10 biggest insurance players in the country with a better-than-expected  performance results for 2017. The  company recorded a 250 percent sales increase in   first year premium, among others. 

PLIA leader

As the president of the organization, Kliesow vows to advance the insurance industry’s goals, and spread the word about the significance of insurance in the socioeconomic development of the Philippines. 

“The main focus of PLIA will continue to be the promotion of life insurance in the Philippines, in light of the relatively low penetration rate,” he said.

He said the organization would continue to collaborate with the Foundation for the Advancement of Life Insurance Around the World (FALIA) and once again host an essay writing competition for Filipino senior high school students centering on the role of insurance products in the society. 

Kliesow said the PLIA would also work together with the Insurance Commission (IC) in coming up with policies and regulatory framework that would help the industry grow even further. The industry group has  started discussions with the IC on the creation of the  regulatory framework that would encourage insurance companies to increase their investments in infrastructure and public-private partnership projects, according to Kliesow.

“As an industry, we would like to invest more on infrastructure but there are still some hurdles that must be taken. So we’re working with the Insurance Commission on a framework that will support infrastructure investment,” Kliesow said, adding that “the group will continue to work on this. It’s one of the top priorities for 2018.”

Going forward, the PLIA president said he sees a brighter future ahead for the local life insurance industry amid the country’s sound economic prospects.

“For the Philippines, the outlook is extremely solid in my point of view – the GDP growth, inflation, lower unemployment. And I think  the  tax reform will actually support infrastructure development,” Kliesow said.

With these prospects, Kliesow expects the insurance industry  to sustain the strong double-digit expansion recorded last year.

In 2017, life insurance premiums rose by 10.7 percent to P202.341 billion from P182.794 billion in the previous year.