Thanks to a strong Philippine economy, a growing middle class, and a demographic “sweet spot” wherein the country starts to benefit from the earning capacity of its young population, Insular Life (InLife) continues to reap the benefits of being a strong player in the local insurance industry.
In this interview, President & Chief Executive Officer Mona Lisa B. dela Cruz talks about how the Company is navigating the changing landscape and pushing for inclusiveness in a country where only a little more than half of the population has some form of life insurance.
How would you describe the performance of InLife against that of the local insurance industry in 2017?
The Philippine insurance industry had a banner year in 2017, which can be attributed to a much-improved business environment, relatively lower inflation, and higher economic growth, which stood at 6.7 percent in GDP.
Based on the unaudited quarterly statistical report as of December 31, 2017, submitted by all local life insurers and released by the Insurance Commission (IC) in March 2018:
- Total premiums reached ₱202.5 billion, up 11 percent from 2016 when the industry had a flat performance;
- Total assets grew 18 percent to ₱1.26 trillion; and
- Net worth increased by 19.4 percent to ₱202.4 billion from their 2016 levels.
Other indicators also pointed toward positive growth, as cited by the Insurance Commission in their latest data:
- Insurance density (premiums over population) grew by almost 5 percent at ₱1,930 per person;
- Insurance penetration (premiums over the country’s gross domestic product) went up from 1.27 percent to 1.28 percent; and
- Life insurance coverage provided by private insurers rose from 46.22 percent to 52.07 percent, out of an estimated population of 104.9 million Filipinos.
The local insurance industry’s robust performance also reflects the feverish competition among players, including Inlife.
Based on the same unaudited quarterly figures from the IC, Inlife managed to secure its industry rankings. The Company ranked No. 2 in net worth, No. 3 in net income and in admitted assets, and No. 7 in premium income.
As we are coming from a record-breaking performance in 2016 in terms of revenues, net income, assets, and net worth, so, naturally, 2017 will be a consolidation.
Based on our audited financial statements as of December 31, 2017, our consolidated net income nonetheless breached the ₱5-billion mark for the first time at, ₱5.03 billion, growing 2 percent from ₱4.9 billion in 2016.
Consolidated revenues, however, declined by 21 percent to ₱19.7 billion from ₱24.9 billion a year ago. Consolidated total assets grew 5 percent to ₱135.9 billion from ₱130.0 billion year on year. Consolidated members’ equity or net worth increased 12 percent at ₱36.5 billion from ₱32.7 billion.
The Parent Company generated net income of ₱4 billion, up by 9 percent from ₱3.7 billion in 2016. Parent Company’s assets increased by 5 percent, from ₱133.2 billion in 2016 to ₱140 billion in 2017. We had a net worth of ₱41.0 billion, which was a 13 percent improvement from the 2016 level of ₱36.4 billion. Total business-in-force stood at ₱280.5 billion, with 337,200 policies. This represented a 5 percent growth from the previous year’s ₱267.3 billion, with 334,996 policies in force.
On the premium production side, we ended up with a 9-percent drop in new business premiums, which stood at ₱7.1 billion in 2017 versus ₱7.8 billion in 2016. Total premiums were down by 5 percent from a year ago to ₱11.8 billion.
What were the major initiatives of the Company in 2017?
We recognize that the financial services industry is now at a tipping point: either disrupt or get disrupted. A lot of firms are encroaching into the financial arena, not just enticing new customers, but also raising customer expectations for customized and targeted experiences.
While it has a 107-year head start to build a solid reputation and a track record of stability, InLife has to change the way it does business and serve its stakeholders, too. Not only must we learn to adapt, we also must learn to “unlearn” our traditional notions of competing.
This is why innovation and technology had a big impact on the Company’s initiatives in 2017, as financial technology (fintech) and insurance technology (insurtech) took center stage. These two factors significantly influenced what we did in 2017 and what we wanted to do in the next five years to remain competitive in the marketplace.
With digital technology, there are now greater opportunities to enhance customer experience and sales distribution. This prompted us to embark on these digital transformation initiatives in 2017:
- We have digitized some of our processes with the use of Robotic Process Automation (RPA). RPA allows faster deployment
of programs to automate repetitive and resource-intensive processes. Automation of these repetitive, mundane tasks
is critical for enterprises to gain higher efficiency, lower costs and ensure better user experience. Our investment
in RPA has already paid for itself with our deployment of robots that will perform repetitive testing of software
& generation of scheduled reports.
- Our Customer Portal is now sporting an enhanced look and better interface. It was recently upgraded as mobile first design
to be compliant with user experience design best practices. This supports our aim to increase client engagement.
We have also added first-in-the-market online straight-through processing for functionalities that ramp up service
convenience. Withdrawal of Variable Unit-Linked (VUL) funds can now be done by policyholders online without leaving
their homes, with funds credited directly to their nominated bank account. Other transactions such as fund switch
and premium redirection for VUL policies can also be done online. Inlife is the first life insurance company offering
fully automated services from application to benefit fulfillment.
- In 2017, we launched our e-commerce platform. Our first online product, Prime Care, provides funds for medical treatment
of dread diseases. Also, we completed the successful pilot of an e-commerce product sold via our corporate website
and serviced through our online customer portal. We are looking at further building up this online distribution channel.
In addition to these exciting initiatives, Inlife remains the only insurance company in the country that offers a fully automated, end-to-end sales process which includes automated underwriting. Policyholders can fill out forms, choose their desired product, undergo underwriting and receive decisions on applications, all online, in just 30 minutes. This fully-automated sales process will also give revised quotations in case the applicant is found to be substandard.
What new products did you launch in 2017 and how do these reflect the changing customer demands?
Consistent with our thrust to provide Filipinos with a better financial future, we launched a new VUL fund called Peso Global
Equity Fund to allow local investors to diversify into global markets using Philippine pesos. At this point when funds
are flowing into developed markets, it is timely to provide our clients with options to diversify internationally. Peso
Global Equity Fund provides access to international equities that can take our investors’ investment to the next
level. Global Equity fund was made available to existing Wealth Secure and VRA products, subject to minimum placements.
I also mentioned earlier that Prime Care, apart from being the first product we launched through e-commerce, is itself a
product of Inlife’s innovation. It is a unique product because it not only offers a lump sum amount upon diagnosis
of a critical illness, but also provides a monthly allowance for treatment for three years. It also covers 35 types of
We also launched Wealth Assure on a Guaranteed Issue Offer (GIO) basis, which means applications are accepted and approved
instantly. Because it is GIO, there is no need for long health or medical questions, and applications are accepted
regardless of one’s state of health.
For the first time since we forged a bancassurance partnership with UnionBank of the Philippines in 2017, we also launched
two guaranteed issue products exclusively offered by Union for Life for UnionBank clients. These products are: InLife
Security, a guaranteed issue offer (GIO) product that provides lifetime insurance coverage and living benefits from the
policyholder’s participation in Inlife’s various VUL funds; and the InLife Prominence, a GIO, single-pay
VUL product that gives clients access to a diverse portfolio of high- yielding assets while providing life insurance
We remain mindful of emerging trends that involve greater use of online platforms and social media to sell our products.
The IC recently released new guidelines covering e-commerce, including the use of mobile apps to distribute insurance
products. With regulations now in place, we hope to take advantage of emerging technology and introduce other innovations
in our product pipeline and sales and distribution channels to heighten product awareness, improve efficiency in delivery,
and ultimately, cast a wider net when it comes to insuring as many Filipinos. Our local market is also getting younger,
as more young Filipinos enter the workforce and gain purchasing power to buy insurance and invest. These millennials
design their life plans — their career path, marriage, etcetera — more deliberately and so we also take these
into consideration when we design the products we offer.
What internal initiatives did you roll out in 2017 to prepare your organization for the evolving landscape?
We continue to improve on our systems and processes, not just to gear up for the changing business environment, but more so to provide an even better customer experience. A lot of these initiatives have to do with automation as well as relationship building.
For our bancassurance partnership with UnionBank, we have recruited, trained, and licensed 86 financial advisors and 329 business and relationship managers in 2017. We set up the policy issue system, customer servicing system, and monitoring systems customized to the unique requirements of bancassurance. This year, we are keen on continuously improving our bancassurance support capabilities.
In our continuous effort to improve productivity, we looked at ways to further strengthen our relationship with our agency force. We have built this relationship over many years anchored on mutual trust. InLife continues to regard our high-performing agent partners as one of the key pillars of our resilience as a company amid the onslaught of competition and war for talent, not just within our industry.
The other key pillar is our own people at InLife. To cope with the challenging operating environment and make room for more growth, we also deepened our talent bench and hired key talents in 2017, including an Agency Distribution Head, a Chief Strategy Officer, a Chief Innovation Officer, a Chief Information Security Officer, as well as a new Human Resource Division (HRD) Head.
We also started digitizing employee experience using the Human Resource Information System (HRIS) for data entry, tracking, and information needs of our HRD, payroll, management, and accounting functions within the Company. We also put in place tools that will make it easier for our senior officers to know how they measure job performance and for our employees to be aware of how they are being evaluated. With technology, real-time performance assessment will now be possible so everyone will be on their toes and push work productivity. We are also digitizing the other people processes such as training management, talent acquisition, succession planning, and compensation planning. These tools will enable the company to integrate the people process from “womb to tomb.”
In terms of physical infrastructure, a major milestone for us in 2017 was the unveiling of the extensively renovated Insular Life Building in Makati City. The reimagined iconic building now showcases modernized facilities and equipment, a state-of-the-art boardroom, a grand ballroom that can host events for up to 300 people, an updated façade, and a five-level parking building. Insular Life Makati also boasts of its Silver LEED (Leadership in Energy and Environmental Design) certification, which means its construction methods and materials, coupled with energy-efficient building equipment, make it a sustainable building. It uses less water and energy, and reduces greenhouse gas emissions. It is also certified by the Philippine Economic Zone Authority (PEZA), assuring tenants of tax incentives and other commercial benefits.
The building houses our InLife Learning Center, which features millennial colors and interiors that are a far cry from the 54-year-old building’s former look. The InLife Learning Center, is primarily for the use of our agents, for training, private meetings between agents and their clients, and with a lounge at the center. At the entrance is our office for customer service. Except for the mezzanine and the 12th floor that InLife occupies, the building is available for commercial lease.
“The risks, as well as the opportunities, will always
be there. Competition will always be tough, for instance, but that is the reality of the free market and it is good because it only drives us to be better in what we do.”
How do you plan to make a 107-year-old company like InLife relevant to younger Filipinos?
Millennials are now undeniably a growing market segment for insurance players. There are an estimated 26 million millennials
as of 2016, according to the Philippine Statistics Authority, who comprise one-third of the country’s total population.
While they spend their salaries to enjoy and experience life in its fullness, market insights we have gathered show that
they do not plan to stay in the YOLO (You Only Live Once) phase forever. Eventually, they transition to concern themselves
with the more serious parts of life (dubbed as ‘adulting’), and part of this realization is the need to save
for their future.
These insights led us to develop the First Million Fund, a VUL insurance offer that calls for parents to jumpstart their
investment by putting in an initial premium of at least ₱500,000, which could reach ₱1 million on the eighth policy year.
After launching the Fund in 2016, we embarked on a social media campaign on ‘adulting’ targeted at millennials
and their parents.
In addition to coming up with products for the millennial market, we realized that our brand has to evolve as well to keep
up with this young mindset. This led us to launch “Inlife for Good.” Apart from shortening ‘Insular
Life’ into ‘Inlife,’ we also wanted a catchy version that connotes being an insider, trendy, cool and
hip, or being “in.” We added “for Good” to reinforce the commitment that we have had in the past
107 years: we serve for a higher purpose for the good of our policyholders, our stakeholders, and our community. And
as a company with a 107-year track record, we are here for good.
We think of our company as the ‘flag bearer’ in the Philippine insurance industry. After all, we are the only
100-percent Filipino-owned insurance company among the top life insurance companies. Thus, we always strive to work to
be at par with or exceed the multinationals in serving the insurance needs of the Filipino. The greater challenge, however,
is really to insure more Filipinos and raise the country’s insurance penetration rate. We believe we have a significant
role to play and that is why we are saying Inife is “for good”— working for the good of the Filipino
More than being relevant to the younger Filipinos, this is the bigger message that we hope to achieve with our rebranding.
What risks and opportunities do you see in 2018 for the Company?
We have a very positive outlook for 2018. Our economy’s GDP is expected to grow by 8 percent and national income per
capita is seen to reach US$5,000, bringing the Philippines closer to becoming an upper middle-income country. The
life insurance industry is projected to grow by 9 percent.
As one of the industry leaders, Inlife is prepared to capitalize on this growth momentum.
In 2018, our bancassurance partnership will become fully operational. We hope to benefit from UnionBank’s total network
of 300 branches and offices and its over six million clients in 2018. We plan to go full blast with our agency force
expansion to reach a bigger segment of the market.
We also continue to build our digital capabilities to modernize our sales and service channels. Our goal is to continually
improve servicing digitally and to automate our processes to make them faster and more convenient for our policyholders.
Nowadays, online channels have made serving the customer a 24-hour window rather than the traditional 9-to-5 office hours.
We are also moving for more and more usage of our automated underwriting system (AUS) and our online policy servicing
through our customer portal. We also organize events online and offline to maintain our active engagement with policyholders
and our agents.
We have also entered into a partnership with the International Finance Corporation (IFC) of the World Bank to educate and
offer risk-mitigating solutions for women in the country. Inlife is IFC’s only partner in Asia and we are excited
to deliver more products to women and ensure their financial wellness. This program, which we call “Empowering
the Filipino Sheroes,” is our way of helping the mission on financial inclusion so all Filipino women will gain
access to financial instruments and life insurance.
As for the global market environment, while we recognize threats, being in the insurance business for 107 years makes
the Company a veteran to all these cyclical challenges. The risks, as well as the opportunities, will always be there.
Competition will always be tough, for instance, but that is the reality of the free market and it is good because it
only drives us to be better in what we do. In the end, the good we do will all redound to the benefit of the Filipino
— and this is why we say, we are “Inlife for Good.”