PHILAMLIFE: A PRIZED ASSET

Written for an internal newsletter, October 27, 2008.

It is very difficult to talk with clients who have been victims themselves of the past pre-need fiasco. Given their past experience in some pre-need institutions, they now have their conclusion that Philam will end up with the same situation. Many thanks to some news media who helped aggravate the growing misconception of clients, that task to convince them that we will not end up the same as the other defunct pre-need companies became much more difficult.

In order to properly address a policyholder’s concern, one must look through the policyholder’s eyes. Being a Philam policyholder myself, I had my own share of questions and made it as a guide to properly explain the situation to policyholders. The bottom-line of all these is the question, “What will happen to my money if something happens to Philamlife?” That was precisely the main thought of most of the people I talked with during my stint in the conservation team. I was stationed at Cubao RO, where I saw lots of people flocking the business center to either take out a loan, or surrender, primarily because of the news that Philamlife is for sale. I was part of a team composed of people from Philam Call Center, OFW Marketing, and Customer and Area Marketing Office.

I was able to convince a couple who wished to surrender their Pension Builder policy.
The conversation started out with both of them very much angry with the most recent news about AIG divestment and Philamlife’s “for sale” status. Their ire got even worse when they saw in the news that owners of the infamous pre-need company are planning to buy Philamlife.

I started my two-cents worth with a bit of history about the pre-need fiasco. I told them the fact that since most pre-need companies sold educational plans that were open-ended, they found it very hard to keep up with the rising tuition fees. This, coupled with laws that deregulated tuition fee increases, developed problems for pre-need companies in terms of liquidity.

I told them that Philamlife, being a leader in the life insurance industry, has no similar problem. I boasted our strong asset figures of more than P170 billion as of December 2007. Aside from this, I explained the concept of liquidity reserves, which we have accumulated to at least P76 billion. I told them that Philamlife is not closing down, but is simply being sold. The change in ownership will not affect their policies since whoever the new owner will be, the company is bound to fulfill all contractual obligations to the policyholders. The Insurance Commission has very stringent regulations to make sure that the company will honor its commitment to give the policy benefits due each Philamlife client.

To convince them further, I reassured that Philamlife is being sold not because it is going bankrupt—but rather we are considered as one of AIG’s prized assets which makes our company very attractive for prospective buyers. I added a few facts about our parent company, AIG’s current situation and the reasons why we are being sold. I strongly stated that we are not being sold because we are bankrupt, but because we are one of their strongest assets.

Then, the man asked me, “What happens if all of them withdraw?” I answered, “Then we shall give them their cash surrender values. As I have previously said, the IC attests to the fact that we can pay for all present benefits due.

The couple then added a few more minor questions on my employment status and our current situation in the company. After that, the couple’s frowns turned into nods and smiles, indications that they were somehow assured that Philamlife is not going bankrupt, but simply changing its ownership. The husband then gave me a pat on the back and jokingly said, “Okay, we believe you. Make sure you don’t close down okay?”

And I jokingly replied, “I wouldn’t be here in front of you if we are going bankrupt. I’d better be off in the streets looking for a new job.” Then we separated with smiles on our faces.

What the?!

So does this mean we can't drop off in the present because it's supposed to be done already?

I mean, seriously, guys! Aren't there any copywriters from MMDA? We are always proud to say that we are the only Southeast Asian country fluent in English but we can't do simple subject-verb agreement on a traffic sign?! Or maybe it's a simple typo error from the signmakers... Who knows?

I sure hope that this is not a reflection of our plummeting aptitude in English.

Photo taken in North Avenue Station at MRT.

Manpower Services?!

I didn't know Philam had a mantenance services company. I'm sure it's not related to the Philam Group whatsoever. :) Even Equitable has its manning agency! Wow! hehehe. The powers of Pinoy Creativity. hehe

Photo taken somewhere in QC.

Thy will be done...

Gov. Ed Panlilio is doing a magnificent job in cleaning up the corruption-stricken Pampanga. And what is his prize for doing such? A signature campaign for his ouster. There were rumors of overflowing cash gifts to various cities and municipalities to support such a campaign. It seems like Among Ed has stepped on very powerful, brutish and superlatively corrupt people for him to be receiving such campaigns.

As a person of God, although "on leave," Among Ed firmly believes in the Beautitude, "Blessed are they who are persecuted for righteousness; the Kingdom of God will be theirs." That is why his struggle to bring back the integrity and honor of the government is very much intact. He undermines any form of attack even the ones coming from his Vice Governor, or league of provinces. He believes in what is right, and what should be done. He fears nothing and no one because he knows who is on his side.

I am not much of a religious person but I strongly believe that persons like Among Ed are God's way of helping the Filipino people experience change in governance and public service. What we as Filipinos have to do is to stand up behind him and give him the opportunity to make that change. We are a few notches away from the poorest countries in the world, and one of the main reasons for such is corruption and greed. It is about time we experience that change before it's too late.

Fancy that!

While rank and file soldiers, non-commissioned and junior officers relentlessly fight in Mindanao with substandard artillery and extreme lack of supplies, another General is once again facing a controversy involving sums of money. P7 million worth of contingency fund money? For what?

If I were caught with lots of money in my hands, I would either keep mum about the reason behind it, or think thoroughly of the most realistic excuse or alibi. I would never ever say that I had a friend who is asking me to buy a watch in Moscow. Watch in Moscow?! Am I not reading the papers anymore? Has Moscow turned into a watch haven now? Or maybe the officers will make a side trip in Switzerland or Japan? Whatever is the reason behind this outrageously hilarious alibi is yet to be seen. The person who asked a favor to buy him/her a watch should come out in the offing and tell the Filipino people how sorry he is for giving big bucks to a general who is NOT on a vacation, but on a "business" trip. It was a 2-day Interpol meeting! How the heck can you have the time to purchase a 7-million buck watch? Oh well. All of our questions are still about to be answered. I'm sure the next scenario would be a Senate investigation and lots and lots of grandstanding.

After all these fiascoes and controversy surrounding Generals, I can never blame groups like Antonio Trillanes and several other junior officers and regular soldiers for staging coups and for breaking the chain of command. In the Military, leadership by example is very very important in getting the respect and trust of your followers. When will they ever learn??!

In the midst of occuring crises in the world economy, a controversy involving large amounts of money adds ire and dismay from the populace. People, especially those holding delicate positions in government, should be extra careful and wary of the repercussions of their actions. times like these, you should "moderate your greed."

So what is the real story behind the money? Is it really a contingency fund, as what the PNP has mentioned in their statement? Or is it a personal request for a watch purchase, as what was previously stated?

Worst News of the Year

I just heard recently the worst news of the year. I did not expect this to happen. This was unprecedented. I thought that with the latest developments in the computer we can do everything. But the high-tech world did not see this coming.

EA SPORTS, WHY THE HECK WILL YOU NOT LAUNCH NBA LIVE '09 IN PC VERSION?!?!?!

I hope you're happy with this major omission. You just lost a loyal customer, buddies!

On Philamlife

Philamlife is not closing down. It's just being sold. AIG thinks that Philamlife is a good asset so they sell. It's like a big ship with a replacement Captain. Everything's gonna be just fine.

I try to avoid entries about my company, but I feel that it's about time that I somewhat contribute to spreading the word about Philamlife's situation. For Philamlife employees and agents, it is business as usual. Philamlife remained market leaders for the past 60 years, they're still market leaders now, and will be market leaders even after the sale. The employee force is strong, the agency force is diverse, the market base is deep. Just like what Mr. Cuisia has mentioned, the winning bidder will definitely be an instant market leader in the insurance industry.

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10 groups keen on Philamlife
By Ted P. Torres
Tuesday, October 7, 2008
www.philstar.com

The Philippine American Life Insurance Co. (Philamlife) said yesteday it has received offers from about 10 groups after the firm was identified as among the assets to be sold by American International Group (AIG) to pay off its debts.
At the same time, the company sought to dispel concerns that the sale of the country’s largest insurer would affect its ability to pay claims.
Offers to buy Philamlife, the country’s biggest insurer, have come in from both local and foreign firms, some of which were private equity funds, Jose Cuisia, company chief executive told reporters.
“Closer to 10,” Cuisia said when asked about the number of interested buyers. He said he was not aware if there were others who had separately approached AIG’s advisers Blackstone Group LP and J.P. Morgan Chase & Co with an offer.
“I would say these are very respectable groups, also successful groups, which is why it is very encouraging for us,” he said.
But some of the interested buyers were unlikely to meet AIG’s criteria, Cuisia said, adding a strong reputable brand name, financial strength, and a strategic fit were the three key ingredients the US parent required for a successful sale.
“Some will immediately be crossed out,” Cuisia said.
A few of the buyers expressed interest to acquire AIG PhilAm Savings Bank alone while most were keen on buying the whole group, Cuisia said.
The Philamlife Group, the Philippines’ largest insurer, has an asset base of P170 billion and consolidated stockholders equity of P49.5 billion, policies-in-force worth P143 billion, and a work force of over 1,500.
Going by the AIG’s criteria, mega conglomerates like the San Miguel group, and the Ayala Group, are among a few local groups that are in a position to make an acceptable offer.
The San Miguel group has the money and an infrastructure for a financial arm, but not the expertise while the Ayala group has both the money and the expertise. The Ayala group has Ayala Life Assurance Corp., ranked in the top 10 players in the life sector, and BPI/MS, one of the biggest non-life firms in the country.
Valuation is likely to be a crucial issue. The question is how much a premium to add considering the fact that Philamlife has been the leader in the life insurance industry for almost six decades now.
“Whoever buys Philamlife automatically becomes the leader in the Philippines, what greater premium is that?” industry experts said.
Philamlife has over one million policyholders or roughly one third of all the life insurance policyholders in the Philippines. It has a sales force of over 8,000 against a little over 2,000 for its nearest competitors.
Cuisia said he does not know if the sale will be as a block or by company.
So far, he said several local banks have approached him for AIG Philam Savings Bank. Philamlife holds a 45-percent equity in the bank, while AIG holds another 45 percent. The remaining 10 percent is held by the Philamlife Employees Retirement Fund.
Based on 2007 data from the Insurance Commission, the other members of the top 10 life insurers in the Philippines in terms of assets are Sun Life of Canada (Philippines), Insular Life Assurance Co., AXA Philippines, Manufacturers Life Insurance (Manulife), Ayala Life, Pru Life Insurance of UK, Great Pacific Life Assurance (Grepalife), Generali Pilipinas Life Assurance, and Pioneer Life.
SunLife of Canada is affiliated with Sunlife Financial of Canada, Insular Life is a domestic mutual company, AXA is affiliated with AXA of France and reportedly among the biggest in Europe, Manulife is affiliated with Manulife Financial said to be among the biggest in Canada and the US, Ayala Life is of course an affiliate of the Ayala Group, Grepalife is a member of the Yuchengco group, Generali Pilipinas is affiliated with Generali Spa of Italy, and Pioneer Life has connections with Allianz of Germany.
Experts say that whoever bids for Philamlife and subsidiaries must be ready to commit huge, long-term capital.
“But they will be rewarded with a true-jewel of Philippine financial institutions, and the top slot overnight,” they added.
According to Cuisia, the company remains “strongly capitalised” and would be able to meet all its commitments to depositors, investors and policy holders.
He said most of Philamlife’s investments were tied to government securities and bonds, and that the firm did not have any offshore exposure to troubled American financial institutions.
“We would like to assure our policy holders there is no reason for them to worry, to feel their investments are at risk,” he said.
“We have managed our investment portfolio prudently and conservatively.”
Philamlife deputy president and chief operating officer Michel Khalaf said the company has for decades remained a “net contributor” to AIG.
While the company will seek to retain all its employees, he said there could be some “rationalisation” if a buy-out led to duplication of jobs.

Bonfire Reunion

It was a reunion of sorts for the recently concluded Ateneo Bonfire ceremonies, in celebration of championships of the Senior, Junior and Grade School Basketball, Ladies' and high school swimming. Amidst the drenched Bellarmine field, Ateneans from all over not just celebrated with the teams, but also reunited, reminisced and rekindled with their grade school, high school and college friends, classrooms, and tambayans. I was lucky to be in the company of three of my 4F friends, Odin, Jayvee and Bhonny (in photo).

Being a subtly rabid Blue Eagle fan, I purchased an incredibly expensive championship jersey from Adidas. I just thought, what the heck?! It only comes once every several years. :) But what if we go back to back? Then I'd have to save up for another P895 worth of shirts. Hopefully, inflation won't affect the shirt price that much.

We stayed until Parokya ni Edgar played. As usual, they played their all-time favorite hits Buloy, Halaga and Inuman na. In the middle of their songs they uttered hilariously funny spiels about Ateneo, about Darius' La Salle roots, and about Buwi's apathy towards the UAAP (Galing daw kasi ng OB montessori si Buwi kaya walang pakialam).

After staying there for a few hours standing in the sidelines of the Bell field, I realized that the main reason I went to the bonfire is not just to cheer for the champion teams, but to go back and cherish the good ol' days when all seems so simple and so much fun.

Congratulations to the 2008 UAAP and SBP Champions! Halikinu!