The insurance industry’s prospects in the remaining months of the year are expected to improve, reversing the slump seen the previous semester, a top executive of Philippine American Life and General Insurance Company (Philam Life) said on Wednesday.
Interim chief executive officer (CEO) Estelito “Bobby” G. Madrid told reporters that Philam Life would rebound in the months ahead.
Also, the company is now searching for a permanent CEO to replace Rex Ma. A. Mendoza, who last Tuesday was promoted senior adviser to Mark Tucker, the head of the pan-Asian parent company AIA Group Ltd.
“We’re sharing [Mendoza] with other countries. We moved him upstairs,” Madrid explained, noting that Mendoza’s expertise would help strengthen the parent firm’s business in developing Asean markets such as Indonesia, Myanmar and Vietnam.
As for his interim CEO post, Madrid said that there was a timetable.
“I cannot say how long,” he said. “Definitely, we’re looking for a replacement for Rex, and we want to make sure that whoever we replace him with will be the right person for Philam Life.”
When asked if the new CEO would likely come from within the company, Madrid replied that Mendoza’s replacement could be “anyone who would be a good fit” for the position.
Amid the transition in top leadership, Philam Life would continue expanding its portfolio, Madrid said, citing plans to launch a new product as followup to the success of unit-linked Health Invest, which was introduced early this year.
“Health Invest is getting to be our No. 1 product,” Madrid said. He declined to elaborate on the upcoming product.
Philam Life remains optimistic that it will post a double-digit growth by yearend despite the industry-wide slump seen in the first half, Madrid said.
“The industry right now is on a negative growth, and even the top three companies are also having some difficulties… [But] we have put in a lot of initiatives—product launches, all the things we need to push sales. And the second half is historically better than the first half,” Madrid said. “It’s a tough time for the industry. It’s not going to be the same as last year when [the sector] hit the roof.”
Last year, Philam Life saw its total premium income jump 31 percent to P19.967 billion in 2013 from 2012’s P15.291 billion. The company’s net income also rose to about P3 billion—more than half of the entire industry’s profit in 2013, Madrid claimed.
The executive said Philam Life would increasingly tap the regular premium and limited pay segments as well as investment-linked products, which have become more profitable than the single premium.
“During the first half, the single premium [was] badly hit. We’re now into regular and limited pay… We’re hardly selling traditional [insurance products] because it’s difficult amid very low interest rates, and guarantees are also a problem because they are very unattractive,” he said.