Saturday, May 18, 2024

NewsHorizon

Where your horizon expands every day.

Business

, and revenue goals InLife anticipates achieving its NBAPE, profit, and revenue targets.


In the first half, INSULAR LIFE Assurance Co., Ltd. (InLife) experienced a significant increase in their new business annual premium equivalent (NBAPE), which puts them on track to surpass their yearly goal.

In the first half of this year, InLife reported a 127% increase in its NBAPE, reaching P1.706 billion compared to the same period last year.

“We will exceed our NBAPE (sales) target this year. As of the first half this year, we are at 127% increase already over the same period last year. And we see this growth momentum being sustained,” InLife President and Chief Executive Officer (CEO) Raoul Antonio E. Littaua said in a statement on Thursday. However, InLife did not disclose its NBAPE target for the year.

During a briefing on Thursday in Makati City, he stated that he anticipates the company’s NBAPE to double by the end of the year.

According to Mr. Littaua, InLife’s net income may not necessarily experience the same growth rate.

The speaker stated that a life insurance company does not immediately make a profit in its first year and it will take time before the current impressive increase in revenue significantly affects net income.

According to him, the parent company’s net income for this year will be relatively similar to last year’s.

In 2022, InLife’s total earnings reached P5.2 billion, showing a growth of approximately 35% compared to 2021.

According to InLife’s Chief Operating Officer, Efren C. Caringal, Jr., their net income for this year will not reach the same level as last year’s. However, they are confident that they will surpass their projected income for the year. InLife has not disclosed their specific income goal.

Mr. Littaua stated that we are on track to reach our goal for the year, but we are aware that it will be challenging to maintain or repeat that level in 2023.

Mr. Caringal pointed out that due to the one-time gains in the previous year and the long-term nature of insurance business, InLife’s income will be reduced.

The speaker explained that in life insurance, the realization of profit is not immediate. Typically, there are initial costs such as distribution, and profits are earned over time.

Hence, although immediate earnings may be reduced, our long-term financial success will be positive. This is our current approach.
Additionally, Mr. Caringal stated that higher interest rates benefit insurance companies.

“Due to the current high interest rates, insurance companies are able to offer investment products with much higher yields. This has led to significant growth for us in the past year. Our endowment products, which offer both protection and benefits while the insured is alive, have been particularly successful. The high interest rate environment allows us to provide higher yields and coupons for these products,” he explained.

The central bank of the Philippines, known as the BSP, increased borrowing rates by 425 basis points (bps) between May 2022 and March 2023. This resulted in a key interest rate of 6.25%, which is the highest it has been in almost 16 years.

According to Mr. Caringal, the increased inflation has impacted the need for insurance.

“Typically, insurance is not a top priority for consumers when making purchases. When inflation is high, savings rates tend to decrease. However, the Philippines has a low insurance penetration rate, leaving room for growth. This highlights the importance of increasing financial literacy among Filipinos,” stated the speaker.

The rate of overall price increase increased to 6.1% in September, up from 5.3% in August and 6.9% compared to the same month last year.

For the 18th consecutive month, inflation has exceeded the central bank’s target range of 2-4% per year. – Luisa Maria Jacinta C. Jocson