Insurance braces itself for competition over OFW money

Saturday, April 29, 2006

WITH the near-recovery of the real-estate industry and the increase in other investment or savings opportunities in the market, the insurance industry is in for tighter and stricter competition in getting a slice of the overseas Filipino workers (OFW) market this year. These investment or savings opportunities, apart from real estate, include banks and the increased popularity of mutual funds. Jose L. Cuisia, Philippine American Life and General Insurance Co. (Philam) president and chief financial officer, said with Filipinos being more conscious of the importance of savings, there is also the rise of other savings opportunities, apart from insurance, that are out to take advantage of the OFW market. Cuisia said last year, one of the main reasons why OFW remittances increased by 25 percent to $10.7 billion was because more OFWs were paying donw payment for real-estate investments. He explained that though the monthly payments for these projects are small, a buyer needs to put in around 10 percent to 15 percent of the whole amount as initial equity. The slump in demand due to tighter competition and the issues surrounding the preneed industry both affected the earnings of the company, Cuisia admittedly said. He explained that there were still a lot of people who think preneed is also the same as insurance. Last year Philam Plans President Jesus Hofileña said the company targeted to exceed or meet 2004’s gross contract price of P9.7 billion. In 2005 the company posted only a gross income of P478 million and a net income of P92 million. --Cai U. Ordinario

http://www.manilatimes.net/national/2006/apr/29/yehey/business/20060429bus7.html