Industry Insurance Revenue ₱891 million (2010) Founded 18 February 1963 Area served Philippines | Founder Daniel L. Mercado, Sr. Operating income Type of business Private | |
Headquarters Pasig City, Manila, Philippines Key people Gregorio "George" D. Mercado
CEO | ||
Philippine Prudential Life Insurance Company, Inc. (Philippine Prudential) is a privately held insurance company doing business in the Republic of the Philippines. It was founded in 1963 by Daniel L. Mercado, Sr. and is currently run by his grandson, Gregorio "George" D. Mercado, who serves as President and CEO. As of December 2011, Philippine Prudential had over ₱120 billion of business-in-force, and is among the top 15 life insurance companies (ranked according to paid-up capital) in the Philippines, and one of the top 10 wholly Filipino-owned life insurance companies.
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History
The company was founded in 1963 by businessman and philanthropist Daniel L. Mercado, Sr. with total assets of just under ₱500 thousand. In 1979 his grandson George Mercado took a job as head of sales at Philippine Prudential, then resigned six years later when Manila's business environment became untenable, taking a job in the United States. In 1996, Daniel L. Mercado, Sr. died, leaving the company in the hands of his son Daniel M. Mercado, Jr. In 1999 George Mercado returned to the firm, and assumed the post of President and CEO from his father in June 2004.
Philippine Prudential is among the Top 15 Life Insurance Companies (according to Premium Income) in the Philippines, as well as among the Top 10 wholly Filipino-Owned Life Insurance Companies.
On July 9, 2012, the company received its Certificate of Authority (CA) after meeting the requirements of the Insurance Commission of the Philippines. The CA is a certification that Philippine Prudential is deemed qualified by the Insurance Commission to operate and transact its insurance business.
Investors
Philippine Prudential Life Insurance Company is privately held by the Mercado family, owners of a rural bank, and a non-life insurance company. Because the Insurance Commission will require by 2012 life insurers to be capitalized at ₱250 million, Mercado has stated that he may offer additional shares of the company to outside investors in 2012. Philippine Prudential has over 1.8 million policy holders.
Performance and outlook
The company's premium income more than doubled in 2008, going from ₱245 million in 2007 to ₱491 million the following year. Total investments were recorded at ₱342 million in 2009 with a total of ₱72 million paid in claims. As of 31 December 2011, it had:
In 2010, total revenues grew by 31 percent to ₱895 million, aided by a Philippine economic expansion that was the fastest in more than three decades.
As of December 2011, Philippine Prudential had over ₱120 billion of business-in-force.
Mercado predicted that Philippine Prudential's gross premiums will grow 30 percent in 2011, the result of additional distribution channels and sales offices, with 240 sales and marketing staff. The company also plans to expand microinsurance sales, tapping its network of 500 rural bank clients.
Products
The company sells endowment plans, permanent plans, whole life plans, group plans, healthcare coverage, education and pension policies, and mortgage redemption insurance. Unlike many of its competitors, the company does not offer complex insurance policies such as variable life, whose value depends on the performance of an asset in which the premiums are invested. Mercado has been reported as saying "Philippine Prudential's market is not ready for those types of products. Once people start losing the value of their policies, they'll get mad. We'd rather offer guaranteed plans like endowment."
Philippine Prudential Life Insurance Company also sells microinsurance. "We have some policies worth ₱10 thousand, which other companies won't touch," Mercado reports. "We're able to capture more Filipinos [this way]."
Distribution
As of December 2012, Philippine Prudential has over 1.8 million policy holders. They are mostly depositors at rural banks, as group insurance accounts for a large share of the company's sales.
The company has six distribution channels:
Brand confusion with Prudential Life plans
Philippine Prudential is unrelated to the similarly named Prudential Life Plans Inc., a pre-need policy provider that has recently experienced financial difficulties. The brand confusion has resulted in critical blog posts being written about Prudential Life Plans, but incorrectly naming Philippine Prudential.
On February 8, 2012, in response to customer and public concern following current news report that Prudentialife Plans was issued a "stay order" by the Insurance Commission of the Philippines (IC). Philippine Prudential assured its policyholders and the general public, through an official media statement, that it has no filial or business relationship whatsoever with Prudentialife Plans, Inc. (PPI), a pre-need company which deals in pension, education and memorial plans.