According to the latest announcement of the Insurance Commission, Sun Life of Canada Philippines, the oldest life insurance company in the Philippines, again dominated the Philippine insurance market in 2014 based on total premium income. Premium income generally refers to the money an insurance company receives by charging premiums to clients. The company that received the highest premium income in a given year can be considered the industry leader. Insurance companies compete to get the top spot. Sun Life has been holding the number 1 spot since 2011 after displacing Philam Life which has been the market leader for many years. Philam is the second placer last 2013 but now overtaken by Philippine AXA Life by 37 Million pesos. Philippine AXA Life has been very aggressive in its marketing campaigns.
It is interesting to note that Sun Life has 10 billion pesos margin from both the second and third placers: AXA and Philam. Will this margin increase or decrease next year? Will Sun Life retain its position in 2015? It is exciting to know the ranking next year. According to Philstar, the life insurance industry reported total premium income of P157 billion last year, roughly 8% lower than the P170 billion in 2013. Traditional policies (whole life,endowment plans, term plans) last year amounted to P50 billion, up from P48.3 billion in 2013. Variable life sales fell from P121 billion in 2013 to P107 billion last year.
While other companies are strong in traditional insurance products, Sun Life is strong in the Variable Life Insurance (VUL) market. VUL is a life insurance plan with life insurance and investment (mutual fund). Sun Life’s most popular VUL plans include Sun Flexilink, Sun Maxilink Prime and Sun Maxilink Bright. In VUL, part of your payment will pay the fees and insurance cost and part of it will be invested in a fund of your choice: equity fund, balanced fund or bond fund. The better returns of VUL funds compared to traditional plans attract the booming middle class in the Philippines. Many Filipinos are no longer attracted to the insurance plans with guaranteed cash values but low interest returns. The booming Philippine economy makes investment-linked (VUL) products attractive for Filipino plan holders.