Written Report in Applied Economics

Insurance Industry in the Philippines

I.

Introduction
The main objective of this industry analysis is to determine the stand and view of the
insurance industry in the Philippines. Statistical data and factual information are provided
to describe the development of the insurance industry. Aside from gathering and
analyzing facts about its strength and weakness, we would also want to provide a strategy
on how to survive the insurance industry by conducting a careful study in its major
competitors, growth, and development.

II.

Overview
Insurance is defined as the contract between an individual or entity and an insurance
company. The insurance will compensate the individual or entity if ever there is a loss,
death or damage done in return of the premium the individual or entity paid in the
insurance company. As a part of the evolving society, people formulate a way on how to
conserve their resources (money) by entering the concept of insurance. As defined,
insurance simply means being sure that people would have something if they earn for
something. There is a collector whose function is to safeguard the giver, and there is also
a giver whose function is to pay the collector. This is how insurance works in a simple
manner.
Insurance Industry in the Philippines started venturing its journey since 19th century during
Spanish period and still prospering in the present era. It was first introduced by the
Spaniards when Lloyds of London, an insurance market in London appointed Strachman,
Murray & Co., Inc. as their representative in the country. It was followed by the
establishment of the first life insurance company in the Philippines, Sun Life of Canada
Inc. Then domestic life insurance companies started to arise and the industry continue to
prosper which leads to the creation of the Insurance Code of 1978. At present, there are
23 life insurance company in the Philippines which are regulated by the Insurance
Commission.

II. Major Competitors

A. COCOLIFE
Cocolife is the biggest Filipino - owned stock life insurance corporation in the
Philippines. It was founded on March 20 1978. Cocolife
was recognized as the Best Life Insurance Company in
the 27th Global Excellence Global Awards.
Products and services
The products and services rendered by Cocolife Company can be categorized into three: (a) for
individual, (b) for business, (c) for healthcare, and (d) for asset management.

PROGRAMS
Bright Moments
Dollar Peak Life

HERO

Bright Minds

Money Accumulator Classic

FOR INDIVIDUAL
DESCRIPTION
Protection
A participating life insurance plan that provides lifetime
insurance protection.
The 1-PAY, 5-PAY, AND 10-PAY DOLLAR PEAK LIFE
PLANS are participating limited pay whole life plans. These
plans provide lifetime insurance coverage in exchange for
premiums payable as a single premium or over a period of 1,
5 or 10 years.
The Single Pay Term plan provides short term level coverage
in exchange for a one-time payment of premium when the
policy is issued. Three options are available depending on the
length of coverage: two, three, and four years.
Education
Cocolife helps you fulfill this dream with Cocolife BRIGHT
MINDS, the college education plan loaded with benefits.
Increasing College Education Benefits
Graduation Starter Fund
Life Insurance up to age 25
Full Guarantee in the event payor's untimely demise
Elementary and High School Contigency Fund
Investment/Savings
This gives young professionals access to a variety of fund

Money Accumulator Preferred

FUSION

GROW

Zenith

Happy 20

Future Savings Planning

Bright Advantage

Group Yearly Renewable Term

Insurance

options at a minimal cost. It is the only available variable life

program in the country today that offers an incomparable
product advantage. The Guaranteed Fund. This ensures
capital growth and protection through its guaranteed interest
rate that is higher than ordinary savings products.
Money Accumulator Preferred is the first and only
comprehensive variable life insurance plan in the country
today. Aside from offering an Equity Fund and a Fixed
Income Fund, it is the first variable life insurance product to
offer a Fixed Account Fund, which provides a fixed interest
rate that is higher than ordinary savings products.
Fusion is a buy one, get one proposition. This plan is a 5-pay
peso-denominated variable life package that offers highyielding investment plus life insurance coverage. It assures a
guaranteed interest rate that is higher than other ordinary
investment products.
Grow is a risk- free, high yielding investment that optimizes
your wealth in times of market fluctuations. This product
absolutely guarantees that your capital is secure and will earn
high investment gains regardless of economic conditions.
Zenith is a single-pay variable life that allows you to reach
the zenith of investment returns; so you and your family can
live your dreams.
Pension/Retirement
A specially designed financial package that provides
guaranteed cash bonuses and attractive dividend earnings
plus built-in life insurance protection for 20 years.
The plan is a limited-pay non-participating whole life
product which pays 200% of the Face Amount upon the
Insured's death prior to age 100 or upon the Insured's
survival to age 100. In addition, Anticipated Endowments are
payable if the insured is alive at the time such benefits are
payable.
Cocolife BRIGHT ADVANTAGE is a disciplined savings
program that helps you save and grow your money for the
future. This will give you enough capital to start your own
business, go on that dream vacation or just retire
comfortably.
FOR BUSINESS
Pays the beneficiaries the amount of insurance in case of
death

GYRT provides flexible coverage options based on: fixed

amount, salary, rank or tenure
Insurance coverage 24 x 7, on & off the job
Group Credit (GCLI) /
Pays creditor the outstanding loan balance in case of insuredMortgage Redemption
debtor's death
Insurance (MRI) / Group Term Flexible coverage option
Insurance
Outstanding loan balance at death
Outstanding loan balance every loan anniversary
Initial loan amount
GYRT Dollar Plan
Pays the beneficiaries the amount of insurance in case of
death
GYRT provides flexible coverage options based on: fixed
amount, salary, rank or tenure
Insurance coverage 24 x 7, on & off the job
FOR HEALTH CARE
Cocolife Health Care
COCOLIFE Healthcare was established in 1997 to complete
Cocolifes array of risk protection services. Initially,
COCOLIFE Healthcare provided reimbursement type of
health insurance.
FOR ASSET MANAGEMENT
Cocolife Asset Management
CAMCI is a wholly owned subsidiary of Cocolife. It started
Company, Inc.
operations in 2004 and is licensed to operate as an
investment adviser and principal distributor of United Fund,
Inc., Cocolife Fixed Income Fund, Inc. and Cocolife Dollar
Fund Builder, Inc.

Financial highlights

Source: COCOLIFE Operational Highlights Financial Performance 2014

Over time, we can see the positive growth the Cocolife performed. This indicates a consistently
improving performance. In the table, we can see that the Net Income has the highest growth. As
we observe, the investment income also increased despite the volatility in the market.

B. Fortune Life
Fortune Life Insurance Co., Inc. located at Legazpi Village, Makati City
was founded on December 8, 1984. It is one of the accredited
insurance companies by the Insurance Commission and has
best
performances in the Insurance Industry. The companys
mission and vision is to
provide programs that concentrate on customers' needs and
promote a service-oriented culture. Its constant development and innovation of its products is a
manifestation of its sensitivity to the growing and evolving needs of client

Table 1: Fortune Lifes Financial Statements

Image source: Fortune Life

The table shows the financial assets of the company. Its gross written premium grew
continuously from 756.32 million in 2010 to 1,091.84 million in 2014 or growth rate of 44.36%.
Second indicator is the net income. Its net underwriting income increased from 160.86 million in

2010 to 168.55 million in 2014 or a growth rate of 4.7%. The third indicator is the companys
total investment increased from 1,977.34 million during 2010 to 3,021.26 in 2014 or a growth of
53%. These data show the competitiveness of the firm in the insurance industry that makes it the
top 15 Life Insurance Company in the Philippines as of 2014 issued by the Insurance
Commission.
Within the three decades of the company in the Industry, it produced quality services that
provided the demands of Filipinos specially those who work in government such as teachers,
soldiers, and other public government workers.
Plan Program
The New Aple

Fortune Miller
Savings Insurance

Fortune Enhancer
Savings Insurance
Fortune Provider
Savings Indurance
60/65
Flexilife Wealth
Protector 1 10

Flexidollar Wealth
Accumulator

New Golden Life

Wealth Protector

Estate Protector Plan

Plan Description
This plan provides you savings and also covers you with insurance
protection until the age 100, with any easy and short paying
premium mode you can choose from.
Fortune Miler offers a financial package that provides lifetime
protection and cash benefits given to the policyholder every three
years until the 21 st policy year. At the end of which, the
policyholder will get a total of 175% of his/her investment.
Aside from the basic protection of a whole life plan that offers
lifetime protection, this plan also offers cash benefits every two
years until age 98.
With a limited paying period of 10 years one is sure to get cash
equal to the face amount at age 60 or 65 through Fortune Provider
Savings Insurance.
A plan that is flexible in terms of paying your premium for it
gives you 1 to 10 years paying period. Anyone who is financially
stable now can get protection from creditors and estate tax through
this new plan.
This plan is a traditional non-participating limited payment 10Year Endowment Plans payable in 1, 2, 3, 4 and 5 years. It is
administered in US Dollar (USD) in which premiums,
nonforfeiture values, and policy benefits are all paid in USD. It is a
Ten Year Endowment Plan that means the company will pay the
face amount to the designated beneficiaries upon the death of the
Insured within ten (10) years from the policy effective date.
New Golden Life Wealth Protector will defend you and your
family to the hustle and bustle of life. It is a traditional
nonparticipating whole life plan payable during the lifetime of the
insured.
Estate Protector Plan is another plan created to protect your hard
earned wealth from devaluation because of estate taxes impose by

Family Protector Plan

Plus

Fortune Education
Plan

Hospital Income Plan

Plus

Fortune 5

the government. It is a traditional whole life plan that provides

lifetime insurance coverage payable during the lifetime of the
insured.
As a special coverage that provides personal accident insurance to
the principal insured, his spouse or parents, and children or
brothers/sisters. It is also provides a medical reimbursement to the
principal insured, his spouse or parents only. The very significant
advantage of Family Protector Plan Plus is the burial benefit,
which is 25% of the basic coverage for both the principal insured
and other covered members. The burial benefit will be paid upon
the death of a covered member from all causes, except suicide
within the first two (2) years of the policy.
Fortune Education Plan or FEP where education and insurance
were combined into one.
Your children's future is now guaranteed even adversities arise
with this new product from Fortune Life Insurance.
The new Hospital Income Plan Plus (HIPP) is a traditional
nonparticipating yearly renewable hospital income plan, which
provides benefit in the form of hospital daily income multiplied by
the number of days of confinement, subject to a maximum of
thirty-one (31) days per confinement. Successive periods of
hospital confinements shall be considered as one (1) period of
confinement, unless separated by more than thirty (30) days, or the
subsequent confinement is due to causes entirely unrelated to the
causes of the previous confinement.The HIPP policyholder may
renew his/her policy every year, provided he/she not yet reached
age 60
Fortune 5 is a whole life insurance coverage payable in five years
with anticipated endowment payable every five years up to the
20th policy year plus five year term insurance during paying
period.

C. Insular Life
Insular Life was established on November 25,
1910 and was now inaugurated as one of the
Philippiness leading and largest life insurance
company in the country. The services and products provided by the

company are attuned to the needs of individuals in their different stages of life. The companys
goal is to pursuit the attainment of empowerment of families to attain financial security.

Premium
Income
Revenues
Net Income
Assets
Members
Equity

2010
7.1B

2011
7.4B

2012
9.1B

2013
11.1B

2014
11.8B

15.2B
2.6B
72B
17.2B

15.6B
2.9B
80.5B
20.7B

18.1B
3.2B
89.6B
23.2B

19.3B
2.4B
94.2B
22.1B

19.6B
2.9B
101.3B
22.8B

This table shows the financial highlights of Insular based on their published annual performance
report. As we can see, the Premium Income of Insular Life in consistent in the increasing of their
PI, nut in 2012 and 2013 is the great year of Insular Life based on the growth rate in their
Premium Income. Similarly to Premium Income, 201 is also a great year in terms of the Revenue
of Insular Life, 15.6B in 2011 increasing into 18.1B in 2012. While the Net Income and
Members Equity in consistent in increasing until 2013 where both Net Income and Members
Equity decreased. And the total Assets of Insular Life has been stable in increasing.

D. Philam Life
The Philippine American Life and
General Insurance Company (Philam
Life) is the countrys premier life
insurance company. Established on June
21, 1947 by Cornelius Vander Starr with
Earl Carroll as founding president,
Philam Life served as a house of
savings to help Filipinos recover from the ravages of World War II. Mr. Carroll envisioned to
have a Philam Life policy in every Filipino home, which has become the driving force behind
the dynamic growth of Philam Life. Philam Life empowers Filipinos to achieve financial security
and prosperity as their mission, and became the undisputed leader in insurance and wealth
management as their vision.

2011

2012

2013

2014

Gross
Premiums
Net
Investment
Income
Total Assets

13.6B

15.4B

20.1B

18.6B

11.3B

11.8B

12.2B

176.6B

192.6B

209B

218B

Net Insurance
Benefits &
Claims
Net Income

15.7B

18.7B

18.7B

21.4B

7.3B

3.3B

6.9B

5B

Stockholders
Equity

61B

68.4B

76.5B

85.2B

Source: Philam Life

This table shows the annual performance report showing their financial highlights. As we can
see, the Gross Premiums of the 2011-2013 has been growing but in the year 2014, the GP growth
decreased by 8% that is because of the the decline in Net Premiums during the first half of 2014.
The Net Investment Income as well as the Total Assets and Stockholders Equity is consistent in
increasing. While the Net Insurance Benefits & Claims increase in the year 2012 by 18.7% from
the previous year, but remains the same into the next year. The Net Income in 2012 was lower
than last years NI, but posted a solid Net Income of P6.9 billion, which was significantly higher
than previous year but decreased again in 2014.

E. Sunlife
Sun Life
1895. It

of Canada (Philippines) Inc. started its journey here in the Philippines in

was a sect of Sunlife Financial which was founded in 1865. As of today,
the company is the leading insurance company in the country credited by
the Insurance Commission. Its goal is to secure and protect every
Filipinos financial status by providing high standard
programs and services and to help the community by
funding outreach programs.

Source: Sunlife

The table shows the net assets of Sun Life Philippines for the year of 2014. Its gross premiums
have a growth rate of 3.58% from the base year 2013. While the total investment has a growth
rate of 102.63%, double of its total investment during 2013.

Program
SUN Safer Life - 5
Year Renewable
and Convertible
Term (NEW)
Sun LifeAssure

Description
is a 5-year term life insurance product that provides maximum protection
at a cost that fits your budget.

SUN Smarter Life

is a protection product that provides double life insurance coverage

starting Day 1 until Age 100. You can choose between the Classic variant
which provides basic life insurance coverage; or the Elite variant which
also provides LIFETIME guaranteed cash payouts equal to 8% of the
Face Amount given at the end of the 6th year and every other year
onwards.
are insurance packages specially designed for women.

Sun Maiden and

Sun Maiden Plus

is a nonparticipating peso-denominated five-year renewable term life

plan with critical illness benefit.

Sun Acceler8

Sun First Aid

Sun Dream
Achiever

Sun StartUp
10-year period.

Supplementary
Benefits or Riders

is a protection and savings in one that provides guaranteed cash benefits

at specific periods throughout the duration of the policy, plus a lump sum
maturity benefit at the end of 20 years. Both the guaranteed cash benefits
and the life insurance coverage increases to address inflation.
It is an affordable hospital income plan that helps defray the cost of
hospitalization. Its money back feature gives you the unique benefit of
receiving cash whether you get hospitalized or not.
is a life insurance product and savings in one with guaranteed education
benefits paid in four (4) annual installments starting on the year chosen
by the insured, regardless of school and course.
is a ten (10) pay, peso denominated, nonparticipating endowment
insurance product maturing at the end of 10 years. This product
guarantees payment of the face amount upon death of the life insured;
and return of a portion of the premiums paid when life insured outlives
the
are also available to enhance the basic insurance plan.