The Philippine Insurance Commission (IC) recently reported that the life insurance sector’s total premium revenues of P229.9 billion through the third quarter of 2023, with Annual Premium Equivalent (APE) premiums on new insurance sales of P46.6 billion, increased by 13.9 percent compared to the same period in 2022.
APE is the annual total value of all single and recurring premium policies.
Growth in new life premiums comes from the sale of “good old fashioned” traditional life insurance. As sales of variable life insurance eased, owing to the volatility of equity markets the past several years, life companies have turned to traditional life sales to shore up new business.
“Acquiring life insurance coverage goes well beyond securing a family’s financial future,” said veteran insurance practitioner, Renato Vergel De Dios, President and CEO of BDO Life Assurance Company, Inc. (BDO Life).
Very few Filipinos are aware of how the life insurance industry participates in nation-building by virtue of its ability to pool together long-term capital that an emerging economy like the Philippines critically needs.
Premiums generated, especially from traditional life insurance sales, are well poised to do exactly this.
Insurance companies help fuel economic growth by strategically channeling long-term funds generated from premiums into areas like infrastructure development and manufacturing capacity expansion, to name a few, that serve as catalysts for national development.
The Asian Development Bank (ADB) has emphasized the pivotal role of such investments in sustaining economic progress.
By encouraging all Filipinos, including Overseas Filipino Workers (OFWs) deployed all over the world, to acquire life insurance coverage, insurance companies protect their earning capability and fortify family financial security.
At the same time, the amounts devoted to premiums contribute to forming long-term capital funds which, when invested, spur the nation’s development and financial prosperity.
Life insurers are among the largest corporate investors in the country, given their access to long-term capital. “We hope that our investments as an industry create ample material and local job opportunities down the road so as to help minimize the need for Filipinos to endure isolation from their loved ones in search of meaningful work abroad,” added Vergel De Dios.
With more and more Filipinos recognizing the value of life insurance protection, BDO expects bancassurance to remain a consistent, complementary contributor to its overall financial services business.
“The steady rise of life insurance sales over the years clearly indicates the growing awareness of the importance of insurance protection among Filipinos,” said Vergel De Dios.
BDO Life, BDO’s life insurance carrier, exhibited strong business recovery in 2022 to claim the 4th spot in new sales, measured in terms of New Business Annual Premium Equivalents (NBAPE). NBAPE is a weighted measure of premiums from new business.
BDO Unibank, Inc. (BDO) reported a net income of P53.9 billion for the January — September period, P14 billion more that the P40.0 billion the giant lender posted during the same period last year, backed by broad-based growth across its core businesses.
This resulted in a Return on Common Equity (ROCE) of 15.1 percent from 12.4 percent in the same period last year.
Net Interest Income increased to P137.4 billion with customer loans growing 7.5 percent year-on-year to P2.7 trillion and deposits expanding12 percent to P3.4 trillion.
Non-Interest Income settled at P57.9 billion,supported by various fee-based and treasury/FX businesses.
Pre-Provision Operating Profit amounted to P80.6 billion, with revenue growth continuing to outpace cost growth.
Non-Performing Loan (NPL) ratio remained stable at 1.99 percent despite the higher interest rate environment, while NPL coverage improved to 176 percent.
The bank continues to set aside provisions in line with its conservative credit and provisioning policies.
Common Equity increased to P494.3 billion given continued profitable operations. Book Value Per Share (BVPS) increased 13 percent to P93.83. Capital Adequacy Ratio and Common Equity Tier 1 (CET1) Ratio strengthened to 15.6 percent and 14.5 percent, respectively, with ample capital buffers vs. regulatory minimum levels.
“While macroeconomic challenges persist, BDO remains cautiously optimistic and is well-positioned to capitalize on opportunities given its strong balance sheet and diversified business franchise,” the bank said in a statement.
BDO is a full-service universal bank which provides a wide range of corporate and retail services such as traditional loan and deposit products, treasury, trust banking, investment banking, private banking, rural banking and microfinance, cash management, leasing and finance, remittance, insurance, cash cards, credit cards, and online and non-online brokerage services.
BDO has the country’s largest distribution network, with over 1,700 consolidated operating branches and more than 4,700 ATMs nationwide. It also has 16 international offices (including full-service branches in Hong Kong and Singapore) in Asia, Europe, North America and the Middle East.
The bank also offers digital banking solutions to make banking easier, faster, and more secure for its clients.
BDO is ranked as the largest bank in the country in terms of total assets, loans, deposits and trust funds under management based on published statements of condition as of June 30, 2023.
