AIA Philam Life wants to insure poor Filipinos

AIA Philam Life, the country’s leading life insurance company, is reinventing its business to shift its focus from investment to protection products and widen its coverage to include the low-income groups.

“We really want to reach out to the market.  We don’t want to just serve the rich.  We cannot do that.  We have to sell to the masses,” AIA Philam Life chief executive Kelvin Ang said in a media briefing on Oct. 13 when former British footballer David Beckham visited Manila to help the company explain and amplify its brand promise of helping Filipinos live healthier, longer and better lives.

Philam Life is a member of AIA Group Limited, the largest independent publicly listed pan-Asian life insurance group.

Ang, who was based in AIA Hong Kong before he was assigned to head Philam Life in March 2019, said he was saddened by what he saw in the Philippines.  “When I came to the Philippines and I saw children on the street begging, selling small things, I said how could these things happen? If every family had a policy to take care of their children, you would not have people living on the street or children running around the street. This is something that I think should go away,” he said.

He said the growing protection gap in the Philippines was alarming and that Philam Life should do something to address the situation. “Insurance companies have an obligation especially Philam Life.  We want to do this because it is very sad when I see some of these things.  Private insurance ownership in this country is very low at only 2 percent which is quite sad.   The 2 percent covers only A and B.  But do they need this? To them, they don’t probably need this, and they just invest,” he said.

“We strongly advocate holistic wellness, and as such, give much importance on having basic protection as one aspect of having peace of mind,” he said.

Data show that the Philippines has a protection gap of P1.5 trillion, a figure that could widen to P2.7 trillion by 2020.  Most insurance products are currently variable unit-linked, as the basic protection function seems to have taken a backseat.

Ang said he also wants to increase the share of protection products to about 50 percent from only 30 percent today.  About 70 percent of insurance products are currently investment-linked.

“We want to bring something meaningful.  Three months ago, we launched a product on 100 critical illnesses and up to 100 years.   That is a very special hundred which is in line with our celebration of AIA centennial this year,” he said.

AIA Philam Life’s latest products include Active Joint Critical Protect which covers two people under one insurance policy and AIA Critical Protect 100 which provides coverage against 100 illnesses from 0 to 100 years old.  Meanwhile, the AIA All-in-One provides protection from permanent disability, personal accident, critical illness and death, for only P1,500 a month.  The product comes with a membership to Philam Life Vitality, the company’s science-backed wellness program.

AIA Group chief marketing officer Stuart Spencer agreed, saying that while Philam Life has been in the country for decades, there is still a large segment of the population that needs insurance protection.

“As an industry, we need to continue to build demand, build recognition, and part of that is expanding the scope of reach of our distribution.  We aim to provide all sectors of society with solutions. It is a function of marketing, advertising, branding and time,” Stuart said.

Ang said Philam Life is also teaming up with other companies to reintroduce microinsurance in the Philippines that will have a coverage of up to P50,000.

“For microinsurance we are working with BanKo and the BPI Group, and we are tying up with Palawan Pawnshop.  We are working with them on the digital platform to distribute this at a low cost and good service. We are looking at launching the product sometime next year.  We are looking at P500 a month,” he said.

He said the company’s previous microinsurance product did not take off as hoped for because of the distribution issue.  “At that time we had issue about servicing, but today is very different.  With digital technology, we can do a lot more at a really low cost and make that coverage meaningful.  We don’t want to sell something and you get P5,000 coverage.  What can you do with P5,000 coverage? I don’t want to do those things.  We want to do something meaningful even for the D class.  I think P50,000 sounds good,” he said.

Stuart said AIA decided to bring Beckham to the Philippines to bring more online traffic to AIA and make people aware about insurance products.  Beckham was tapped as AIA global ambassador along with Filipino celebrities Solenn Heussaff, Nico Bolzico, Raymond Gutierrez and Wil Dasovich.

Philam Life, established in 1947, recorded total assets of P249.6 billion and net worth of P77.1 billion as of end-2018 and served more than 700,000 individual policyholders and 3,000,000 insured group members.

Its products include life protection, health insurance, savings, education, retirement, investment, group and credit life insurance. It also offers bancassurance and fund management products and services through subsidiaries BPI-Philam Life Assurance Company and Philam Asset Management Inc.

Data from the Insurance Commission show that the combined premium income of Philam Life and BPLAC reached P40.7 billion in 2018. 

Its parent company, AIA Group, is celebrating its 100th anniversary in 2019. AIA had total assets of $256 billion as of end-June 2019.