REAL

LIFE
NEVER
STOPS

The 2014 Philam Life Performance Report

2  |  2014 PHILAM LIFE PERFORMANCE REPORT
 REAL LIFE NEVER STOPS
For over 65 years, Philam Life has helped generations
of Filipino families plan, protect and prepare for life.
Our experience has allowed us to help millions of
people achieve their goals, and to be there for them in
times of need.

We know that real life never stops changing, and that

people need a partner who understands and supports
them through life’s challenges and opportunities.

That is why we are committed to genuinely engage with

our customers through meaningful dialogue. By talking
to them, we know that we can better provide them
with the right solutions and the right plans that turn
struggles into success, fears into peace of mind and
dreams into reality. 

We at Philam Life are proud to be part of AIA, “The Real

Life Company.”

2014 PHILAM LIFE PERFORMANCE REPORT  |  3

 AT A GLANCE:

AIA
AIA has a diversified business across the
Asia-Pacific region. Our long experience
in the region allows us to tailor our
strategies to the culture, demographics
and insurance needs of each market in
which we operate.

Our vision is to become the pre-eminent

life insurance provider in the Asia- AIA CO. AND
Pacific region. That is our service to our AIA INTERNATIONAL
FINANCIAL STRENGTH
customers and to our shareholders. RATINGS & OUTLOOKS:

AA-/Aa3
Our purpose is to play a leadership role in (STABLE)
driving economic and social development
across the region. That is our service to OVER

90
societies and their people.

YEARS
OF HISTORY IN ASIA

100% OWNERSHIP

2,910
MORE THAN

18 16 167
IN 16 OUT OF

MILLION USD
MILLION BILLION USD
GEOGRAPHICAL GROUP SCHEME OPERATING PROFIT
IN TOTAL ASSETS AFTER TAX (2014)
MARKETS MEMBERS

1,845
MORE THAN

28
MILLION
INDIVIDUAL POLICIES
MILLION USD
VALUE OF NEW
BUSINESS (2014)

4  |  2014 PHILAM LIFE PERFORMANCE REPORT

1919
CHINA

1931
HONG KONG

1931
SINGAPORE

1938
THAILAND

1947
PHILIPPINES

1948
MALAYSIA

1957
BRUNEI

1972
AUSTRALIA

1981
NEW ZEALAND

1982
MACAU

1984
INDONESIA

1987
KOREA

1990
TAIWAN

2000
VIETNAM

2001
INDIA

2012
SRI LANKA

2013
MYANMAR 1

2014 PHILAM LIFE PERFORMANCE REPORT  |  5

 AT A GLANCE:
Our Vision:
We are the undisputed leader
in insurance and wealth
management.

PHILAM
Our Mission:
We empower Filipinos to achieve
financial security and prosperity.

LIFE
The Philippine American Life and General
Our Values:
Integrity
Passion for Excellence
Malasakit (Concern)
Kusang-loob (With an open heart)

Insurance Company (Philam Life) is the

country’s premier and most trusted life
insurer.
OVER

118
Established on June 21, 1947 by Cornelius
Vander Starr with Earl Carroll as founding
president, Philam Life served as a “house
BILLION PhP
of savings” to help Filipinos recover from IN CLAIMS & BENEFITS
the ravages of World War II. Mr. Carroll 1950 - 2014

envisioned “a Philam Life policy in every MORE THAN

9.0
Filipino home.” This vision has become the
driving force behind the dynamic growth of
Philam Life. BILLION PhP
EDUCATIONAL PAYOUTS
2004 - 2014

ALMOST

800,000 6,000 1,700,000

MORE THAN MORE THAN

INDIVIDUAL POLICIES GROUP INSURED GROUP

POLICIES MEMBERS

9,000 2x 1.5 500

OVER

MORE THAN THE BILLION PhP MILLION PhP

AGENTS CAPITALIZATION SET IN CAPITAL FOR ITS IN CAPITAL FOR ITS
NATIONWIDE BY THE INSURANCE LIFE INSURANCE NON-LIFE INSURANCE
COMMISSION LICENSE LICENSE

6  |  2014 PHILAM LIFE PERFORMANCE REPORT

The Strongest Name In Insurance Philam Life and Philam Asset Management Inc. are
among the Top Investment Houses in Asian Local
Throughout its 68-year history, Philam Life has Currency Bonds 2014 in the Philippines, as ranked
a long track record of fulfilling its commitments by The Asset Magazine.
to all policy holders and business partners.
Consumers trust Philam Life for its financial
strength, strong brand name, and ability to Philam Life is ranked first among other life
deliver on its promises. insurance companies, and ranked # 41 among
the biggest corporations in the Philippines, based
As part of AIA, The Real Life Company, Philam on BusinessWorld’s 2014 report on the Top 1000
Life understands the real life needs of its Corporations in the Philippines.
customers by providing them with right plans and
the right solutions to help them achieve financial
security and prosperity. In 2013, Philam Life was recognized as the top
performing company in the AIA group by winning two
prestigious awards -- the AIA Premier League Cup
and the AIA Champions’ League Cup for achieving
the highest sales growth over target for the year.

Philam Life is the only financial institution in the

Philippines to receive 10 Platinum Trusted Brand
awards from 2004 up to 2014 from Reader’s Digest
Asia, based on consumer surveys measuring
trustworthiness, credibility, quality, value,
understanding customer needs, innovation and
social responsibility.

Philam Life received 18 Professional Education

Awards from the Life Office Management Association
for outstanding employee development programs.

In 2008, Philam Life was recognized by the

Philippine government, through the Overseas
Workers Welfare Administration, for its outstanding
programs for Overseas Filipino Workers.

Philam Life received the Presidential Citation from

the Philippine government for its contribution to
nation-building (1994).

Philam Life was given the prestigious Asian

Management Award for two consecutive years (1991
to 1992) for strong performance in General and
Financial Management.

2014 PHILAM LIFE PERFORMANCE REPORT  |  7

 OVERVIEW
—
Message from the Philam Life Chief Executive Officer

“Our achievements as a
team prove that we are doing
the right thing, in the right
way, with the right people,
and that through this the
results will come.”

To our valued stakeholders, aspects of their business in a fast and strengthen our distribution channels
efficient way. to effectively reach different markets.
The year 2014 has been eventful and We will harness the use of technology
at times challenging. Yet we carried on • We continued to develop our people. to give our customers more access to
with faith and renewed commitment to We are proud of the quality of our faster and more efficient servicing.
give 100% of our passion, skills, and employees and financial advisors who
commitment to end the year with good serve as the face of Philam Life to our Still key to our continued success is our
and respectable growth. customers. Through them, we were ability to reach out to more Filipinos
able to successfully address the needs by making financial planning and life
We have laid the foundation to further of our customer and provide real life insurance easy to understand, more
strengthen our ability to deliver value plans and solutions that will help them convenient, and more accessible in
to our customers amid an increasingly achieve their dreams and goals now ways that will address their unique
competitive market environment. and in the future. needs.
   
We look back with pride at our Our achievements as a team prove that I am confident that by building on our
successful initiatives last year: we are doing the right thing, in the right 68-year heritage and with the support
way, with the right people, and that of our parent company AIA, we will
• We have started transforming our through this the results will come. be the undisputed leader in the life
field offices in key locations with the insurance industry measured by scale,
aim to become premier facilities, which As we move into 2015, we are very quality and profitability.
we can all be proud of. well-positioned to capitalise on the
huge opportunities that the Philippine
• We continued to provide modern insurance market provides.
sales tools to our financial advisors
and leaders, such as iPoS and the We will focus more on our customers
distribution portal to keep them and what they need – health protection, Estelito G. Madrid, Jr.
abreast with the latest information life protection, savings and retirement, Chief Executive Officer
and to enable them to keep track of all and long term investments. We will Philam Life

8  |  2014 PHILAM LIFE PERFORMANCE REPORT

BUSINESS REVIEW
— REVENUES
2014 Gross Premiums for the year

18.6
amounted to P18.6 billion. Despite
Financial the decline in Net Premiums
Highlights during the first half of 2014, the
life insurance sector performed
strongly during the last quarter
REAL GAINS of the year, thereby reducing the
decrease in premium growth to
only 8%. Philam Life Net Premiums
also reflected the industry-wide
decline at 8% versus LY. Strong
growth however was seen in First
Year Premiums which grew 37%, BILLION PhP
consistent with the thrust to grow
the renewal premium business.
Total Revenues amounted to P35.2 IN GROSS PREMIUMS
billion, up by 4% versus last year. 

SHAREHOLDERS’ EQUITY

85.2
Equity balance remained
strong at P85.2 billion, 11%
up from last year’s P76.5
billion, coming principally
from Net income for the year
of P5.0 billion and net change BILLION PhP
in fair value of available-for-
EQUITY BALANCE
sale financial assets.

218 5.0
NET INCOME
Net income of P5.0 billion was lower than last
year’s P6.9 billion. The high net income last year
includes one-off items mainly gain on sale of UN
property of P1.4B as a result of the transfer of
BILLION PhP Head office to BGC and higher FX gain last year BILLION PhP
of P550M, without which Normalized Net Income
IN TOTAL NET INCOME
INVESTED ASSETS would have registered 23% growth over LY.

INVESTMENTS

21.4
Total Invested Assets
stood at P218.0 billion,
up by 8% versus last year.
Investment Income net
of Investment expenses
amounted to P11.9 billion.

POLICY BENEFITS
Net insurance benefits
and claims totaled P21.4
BILLION PhP billion, up by 14% from last
year. Change in insurance

NET INSURANCE contract liabilities increased

by 28% to P7.9 billion due to
BENEFITS & CLAIMS the increase in the value of
Unit-Linked funds.

2014 PHILAM LIFE PERFORMANCE REPORT  |  9

 REAL ACHIEVEMENTS

BUSINESS HIGHLIGHTS
Philam Life’s overall strategy to achieve its growth targets for 2014 was to strengthen its
distribution platforms – particularly in agency and bancassurance – and create a more
customer-focused organization. We have expanded our premier agencies in progressive
business districts around the country, maximized the potential of our bancassurance
partnerships, and created more initiatives to render best-in-class service to our customers.

10  |  2014 PHILAM LIFE PERFORMANCE REPORT

AGENCY DISTRIBUTION Training & Development
To sustain sales and recruitment, we encouraged
The Agency focused on four major initiatives in 2014 to more leaders to embrace an enhanced New Advisor
drive channel growth:  Enhancing Agency Productivity, On-boarding Program as well as the Sales Builder and
Quality Recruitment, New Advisor Activation and Leader Business Builder Programs. Among the pilot group of
Development. advisors who had attended, productivity had increased
from 20% to 27%.
We have observed significant positive growth across all
four initiatives. From 2013 to 2014, the number of MDRTs We also launched General Agents and Managers
increased by 19%, case sizes jumped 20%, while the number Association (GAMA) modules such as Building the Right
of Producing Agents grew by 9%. People (BRP) which 55 of agency leaders were able to
complete, and Finding the Right People (FRP) which
Quality recruitment turned in impressive results. Our 76% of agency leaders were able to complete. Initial
first-year agent retention nearly doubled and reached 60% indicators show that attendance to the GAMA training
growth, while the number of Real Advisors increased by resulted in 28% of leaders achieving higher ANP
15%. The 90-day Activation Rate for our new advisors also and recruitment standards, up from 16% before they
registered a significant 19%. attended the training.

The number of Qualified Leaders under our Leader Agency Executives have also undergone advanced
Development initiative grew by a substantial 59%, while training conducted by external consultants to
Recruiting Leaders increased by 22%. strengthen their recruitment and activity management
skills.
Recruitment  
We established the advisor recruitment process via Leadership Development
the “Usap Tayo” business opportunity programs (BOP) In preparation for the 2015 Agency Compensation
conducted every month nationwide in over 30 locations. This Scheme (ACS) and to ensure the success of new agency
was supported by an Automated Recruitment Information leaders, we strengthened policies and processes
System (ARIS) to track the progress of new recruits from on leader appointment and promotion, including
the time they were pre-registered up to their first sale. For an improved centralized Home Office review of all
the past two years, we were able to license at least 5,000 candidates for appointment and promotions. Under this
new advisors every year and made significant changes in the review, candidates must meet the standards of team
overall manpower count of the agency. As of end-year, 42% production and manpower, complete all leader training
of Philam Life’s advisors belonged to Generation Y and were classes, attend an assessment workshop and undergo a
expected to grow into top performers and new managers of revalida presentation of his/her business plan in front of
the Company, thereby delivering new market growth. a panel of territory and regional heads.

Philam Trainers Conference 2014

2014 PHILAM LIFE PERFORMANCE REPORT  |  11

 BUSINESS HIGHLIGHTS
—

Above: Advisors who generated the highest ANP during the campaign period Above: One of the forums held by Corporate Solutions for its broker partners
proudly display their plaques during their trip to Bali, Indonesia.

Productivity Enhancement and Reactivation

For top-tier advisors, year-long campaigns were the major CORPORATE SOLUTIONS
drivers of productivity. This includes the Premier Agency
The year 2014 was a record-breaking year for Corporate
Awards, Premier International Mediterranean Cruise
Solutions (CS). Three of the country’s top savings and loan
Trip Incentive, MDRT benefits, AIA Save a Life and the AIA
associations, as well as two top banks in the Philippines
President Club. To drive participation throughout the year,
became new partners, significantly contributing to a 63%
short-run campaigns with regional travel incentives were
growth in premiums. Persistency likewise hit a high 91%.
also put in place. This aimed to drive middle-tier performers
to better their performance and eventually aim for top-tier
The Agency Team centered their efforts and plans on
rewards and move up in the Premier Career Path level. As
activating MDRTs and Premiere Advisors to sell CS. Special
a result, more advisors and leaders met the 2015 Premier
training sessions and campaigns were held to build
Agency Awards qualification, representing a 19.2% increase
knowledge and reward these advisors for their support.
compared to the same period last year.

Relationships with the top three global brokers were

Another tool to increase productivity is the Interactive
strengthened, more local brokers were activated and two
Point of Sale (iPoS) application. iPoS utilization rate has
major Corporate Unit Agencies were recruited to bring in
increased to 46%, with each iPoS user producing an average
more major accounts. These resulted to a 76% increase in
of four cases. This is 23% higher than the standard case
broker business vs 2013 ANP.
size produced by the rest of the agency force. Policies sold
through iPoS contributed 16% of the total Agency Annualized
New Premium and 16% of total policies sold.
MARKETING
To sustain the increase in productivity, the Sales Builder
Program and a Coaching for Performance activity
New Products and Riders
In February, we launched Health Invest to address market
management program were put in place to provide regular
need for a unit-linked health plan with critical illness,
discussion and monitoring of performance, as well as
accident, life insurance coverage and a health fund for future
actively encourage field activities such as joint field work.
healthcare needs. It was positioned primarily to supplement
employer-provided HMO coverage, the prevalent financial
Agency Office Expansion
solution for health among employed breadwinners and
We embarked on the Agency Office Transformation program
single professionals.
to create an agency office environment that attracts new
advisors and outstanding potential leaders, as well as
Likewise, the rider suite for unit-linked plans was launched
doubles the number of promoted new leaders within two
to help provide comprehensive protection benefits and offer
years of the office transformation. Thirty offices nationwide
targeted product solutions. This was supported by a 2H 2014
have already been transformed during the first phase, which
Product Bundling campaign for advisors, aimed at giving
was completed in 2014. Twelve more top-priority sites are to
them sales tools for targeted product needs such as com-
be renovated until 2016. This initiative has been aligned with
prehensive protection, health, education and retirement. The
the customer service office model to ensure the delivery of
Education and Retirement product bundles specifically filled
field offices with full functionalities that support growth and
in a competitive gap in targeted savings solutions, allowing
meet customer needs.
advisors to offer a more complete suite of products.

12  |  2014 PHILAM LIFE PERFORMANCE REPORT

Above: Philam Life’s Health Invest campaign.

Customer-centric Initiatives (SIO) Family Provider offer to clients of more than two years.
The creation of the Customer Council has instituted a This was the first wide-scale attempt to help advisors identify
more customer-centric culture in the company. In 2014, priorities and leverage on their existing customer business.
the Customer Experience Dashboard was updated and the
Desired Customer Experience (DCE) Model was validated Digital Marketing
among the Council members. This was strategic in our Ease Majority of our digital campaigns aim to: 1) create aware-
of Doing Business (EODB) initiatives such as the Customer ness and interest for life insurance and financial planning; 2)
Portal and the enhancement of call center services and attract young professions; and 3) serve as lead generation to
other customer touchpoints. support health and protection product strategy.

To ensure new customers stay committed to the policies

they bought, we developed and implemented the enhanced OPERATIONS
welcome call initiative. This is to ensure that the client’s
on-boarding experience is delivered properly (i.e. client AND TECHNOLOGY
understands the products bought, there is a receipt of policy
contracts within the agreed period, there is validation of Operations Transformation
contact information, etc.). In alignment with AIA’s Pioneer 2 strategies, Operations
Transformation’s focus was on the “Ease of Doing Business”
We launched a through-the-line communication campaign (EODB). Key steps completed were the electronic payment
called “Financial Planning Made Easy” (FPME) to create facilities for iPoS and the automation of bank collections.
awareness and buy-in among internal stakeholders Customer Service Centers were enhanced with a queuing
prior to the official launch of Philam Life’s Operations system (PEQS) which is linked with the frontline system
Transformation project. This project also includes customer (TIPS), enabling faster servicing among front liners.
and advisor touchpoints such as iPoS and Agency Portal,
ePlan (transactional customer portal), Transformed In addition, a one-stop shop model was envisioned for
Customer Service Centers, Enhanced Customer Hotline, the contact centers, more transactional activities were
Simplified Communications, and Multiple Payout and decentralized, authority limits through Auto-POS was
Payment Facilities. increased and override training was completed.

To help agents build long-term relationships and business Another key achievement was the rollout of a new Policy
with existing clients, we launched a campaign to provide a Kit to improve customer on-boarding experience through
Guaranteed Insurance Offer (GIO) Health Invest offer to cus- on-time delivery of policies and a new design that aids
tomers of less than two years and a Simplified Insurance Offer readability and comprehension.

2014 PHILAM LIFE PERFORMANCE REPORT  |  13

 BUSINESS HIGHLIGHTS
—

OUR PEOPLE
Being the Real Life Company, Philam Life provides services
that address and support the changing needs of our
customers and our people. We pride ourselves in building
a motivated workforce that is well positioned to fulfill our
goals, meet our customers’ needs and deliver value to
stakeholders.

Fostering a Culture of Family,

Above: The customer service center (Manila Bay branch) in Pasay City with the Recognition and Support
new queuing system for faster servicing time.
We have built an environment where employees are
encouraged to grow professionally, while holding the value
of family close to their hearts. We have created a sense of
Information Technology family through activities like the annual Philam Group Family
IT partnered with off-shore AIA Technology Shared Services Day, Kiddie Halloween Party and Kiddie Christmas Party.
(TSS) and on-shore local IT service delivery partners to Aside from these, good camaraderie and teamwork were
meet demand and capacity requirements as well as ensure also encouraged at work through departmental gatherings,
efficiency in costs and services. Initiatives were taken to birthday celebrations and recognition of individual successes.
achieve a scalable and utility-based IT Infrastructure model
in order to deliver IT capacity on-demand, opex “pay- Philam Life has also recognized employees’ loyalty and
per-use”, and faster turn-around time for new business dedication through the annual Employee Recognition
applications. Program, recognizing those who have been with the
company for 10, 15, 20, 25, 30 years and above most
Wave started to be utilized as a digital platform for internal especially the retirees who had served the company for
communication, collaboration, and engagement. It allows many years.
employees to share ideas and work on shared documents,
make announcements and participate in group discussions. We also have continuously created and participated in
programs to showcase local talents such as annual talent
contests within and outside AIA. Winners of the AIA Got
ENTERPRISE RISK Talent 2014 were sent to Hong Kong and Macau to compete
with those from other markets and we were able to bag the
MANAGEMENT first honorable mention award.

Philam Life’s risk function recognizes that effective risk Growing in Excellence
management maximizes the value of its business to Excellence is key to realizing our vision of becoming the
its shareholders. The Philam Group Risk Management undisputed leader in insurance and wealth management.
Committee (“Group RMC”) is a risk oversight committee To achieve this, we maintained the 70-20-10 framework,
and a key element of the risk governance structure and where 10% of the professional and personal development
Enterprise Risk Management (ERM) framework. It is of its people came from structured learning curriculum;
represented by senior management of Philam Life and 20% learning came from coaching and mentoring; and 70%
affiliates, providing a forum for risk management issues. came from on-the-job learning, and stretch and mobility

The Group RMC directly reports to the Board Risk Below: Maxibear and Dr. Cowell, official mascots of Maxicare and My Health
Clinic pose with employees
Committee (“BRC”) and has oversight on the Financial Risk
Management Committee (FRMC), and the Operational Risk
Management Committee (ORMC).

Further, the Philam Life Board Risk Committee (“BRC”)

is responsible for determining the Risk Appetite, the
Risk Management Statement, and the Risk Management
Framework, and providing advice and assistance to the
Board of Directors for the review and recommendation
of these matters. Likewise, the BRC also approves the
company’s Risk Measurement Systems and Metrics.”

14  |  2014 PHILAM LIFE PERFORMANCE REPORT

 BUSINESS HIGHLIGHTS
—
Our People
LUZON

There is an even distribution of male and female employees

across all employee categories, from senior management to rank
and file. Only 3% are hired on a contractual basis, and less than
one-fourth are unionized.
1,958 (89%)

MALE FEMALE VISAYAS

866 1,382 132 MINDANAO

(39%) (61%) (6%)

104 (5%)

2,194 97%
FEMALE MALE
CONTRACT TERMS
Employee Category Number Percentage Number Percentage

Senior Management 91 7% 76 9%
Middle Management 164 12% 127 15%
PHILAM GROUP
Junior Supervisory 940 71% 570 66% EMPLOYED FULL-TIME
EMPLOYEES
Rank & File 133 10% 93 11% NATIONWIDE

assignments. This comprehensive approach allowed us to encourage employees to embrace an active lifestyle.
maximize the growth and potential of each employee on These included sports tournaments such as Badminton,
every level of the organization. Basketball and Volleyball.

To grow leaders from within, we made it a strategic priority During the company’s annual “Wellness and Flu
to fill positions internally through targeted developmental Vaccination Day,” free influenza vaccination were provided
programs such as the Management Associate Program to over 2,000 employees and their immediate family.
where structured training sessions and on-the-job training
in various business units prepared associates for strategic Medical benefits offered to employees include a group life
roles in the organization. We have provided growth insurance, a health care plan, and an in-house clinic to
opportunities for our emerging leaders through leadership provided immediate medical assistance.
development initiatives. Training programs were also offered
specific to each individual’s contribution level and function Rewarding Performance
such as ‘The Best of Me Program,’ ‘The AIA Manager Series,’ Given our strong pay-for-performance culture that
‘Crucial Conversations’ and ‘Influencer’ help employees and aligns the work goals of the employees with the over-
managers understand how they can leverage their own style all company directions, performance and success were
of work as they progress in their careers. rewarded on top of the basic monthly compensation,
bonuses and leave credits. Employees were also given the
We have also utilized a Performance Development Dialogue option to become stakeholders in the company through
to set clear goals, manage expectations at work, and the Employee Share Purchase Plan (ESPP), wherein
enhance career development among employees. eligible employees may purchase ordinary shares of
the company with qualified employee contributions and
Promoting Health and Well-Being the company will award one matching restricted stock
To promote healthy living among our employees, we have purchase unit to them at the end of the vesting period for
implemented a broad range of wellness initiatives that every two shares purchased.

2014 PHILAM LIFE PERFORMANCE REPORT  |  15

 BUSINESS REVIEW
—
Affiliates and Subsidiaries

REAL TEAMWORK
Philam Life continued to capitalize on the strength and expertise of its subsidiaries – BPI-Philam Life Assurance
Company as its bancassurance channel, and Philam Asset Management as fund manager of the underlying funds
of its unit-linked products.

BPI-Philam Life Assurance Corporation (BPI-Philam) Philam Asset Management, Inc. (PAMI)
BPI-Philam is one of the leading insurance companies – The year 2014 was another strong year for PAMI, which has
a joint bancassurance venture of Bank of the Philippine once again proved itself as one of the top-performing mutual
Islands and Philippine American Life and General Insurance fund companies in the industry. The company ended the year
Company. The synergy of two of the largest financial with over P47.3 billion in Assets under Management (AUM)*,
institutions in the Philippines propelled BPI Philam Life equivalent to a 24% growth compared with the same period of
Assurance Corp. to become the fifth-ranked life insurance the previous year. Total number of shareholders also increased
company in the country at the end of 2014, up from its 6th- and reached 54,295 as of year-end.
place ranking in 2013—a remarkable achievement in a year
that saw the industry contract by 8%. This overall growth in AUM can be attributed to the significant
boost in sales of PAMI’s two biggest funds, namely Philam
The challenges of 2014 are now the springboard that BPI- Strategic Growth Fund, Inc. (PSGF) and Philam Fund, Inc. (PFI).
Philam will use to achieve aggressive growth in the next PFI accounted for 20.60% of the total PAMI AUM and posted a
several years. The year marks the start of the company’s 35.72% growth versus last year. As of year-end, PFI has an AUM
multi-segment, multi-distribution strategy to maximize its of P9.752 billion. Similarly, PSGF contributed 35.8% to the total
penetration into its market that comprises valued customers PAMI AUM because the fund’s size has grown by 51.27% versus
of BPI. The blueprint to meet revenue goals and sustain- end-2013. PSGF’s AUM has almost reached P17 billion by the
able growth objectives is in place. Initiatives that provide a end of 2014.
solid base and encompass the whole organization – such as
a stronger manpower complement, effective and efficient The success of these two funds may be credited to their positive
sales management, class-leading sales and bank training performance. At the end of 2014, PFI posted a one-year return
programs, and customer service platforms that ensure ease of 13.46% and a five-year cumulative return of 97.09%. PSGF
of customer use – are laid out. The product range to properly has also a proven track record of being the top performing PAMI
cater to the various market segments it aims to serve has Fund with 17.72% one-year return and a cumulative five-year
been strengthened. Most importantly, the engagement and return of 120.36% at year-end.
commitment of all parties to the partnership between AIA,
BPI and Philam Life is fortified. This record-breaking performance of PAMI can also be credited
to the strength of the company’s distribution channels, the
Enhanced productivity and a sharpened focus on the various significant inflows from Philam Life’s Unit-Linked Products
customer segments worked for the long-term sustainable (ULP) sales with PAMI funds as underlying, as well as strong
growth of BPI-Philam, further boosting its quest to become sales from PAMI’s institutional accounts and HNW clients.
the top insurance company in the Philippines.

BPI-Philam employees pose during their “Quantum Leap” Sales Kick-off held The first PAMI Investment Outlook with speakers (L-R) Brian Murray, PhD, AIA
at World Trade Center Tent in Pasay City. Head of Economic Research; Ferdinand Berba, PAMI President & CEO; and UP
Economics Professor Benjamin Diokno, PhD

16  |  2014 PHILAM LIFE PERFORMANCE REPORT

BUSINESS REVIEW
—
Corporate Social Responsibility

EFFECTING REAL CHANGE

Philam Paaralan Skill-based Volunteering
Through Philam Life and AIA’s donations as well as Philam Foundation partnered with the Department of
contributions from other like-hearted local and international Social Welfare and Development (DSWD) Region III for the
organizations, Philam Foundation, Inc. was able to build 40 launching of the Skill-based Volunteering program, which
classrooms in 2014. Three of these classrooms were located utilizes the skills, experience, and education of volunteers
in Taguig National High School as a community relations to match the needs of the partner organization. Twenty-
effort in line with Philam Life’s transfer to Bonifacio four out-of-school youth from Angeles City, Pampanga
Global City, while 37 were built to help schools which were participated in a “Job Hunting Workshop” conducted by the
devastated by Typhoon Haiyan in 2013. KaAkbay volunteers from Philam Life’s Human Resources
Department. Participants were taught basic résumé-writing
Philam Paaralan was also able to receive 1,250 tablet chairs and given pointers during interviews. The workshop helped
from Isla Lipana Foundation, Inc. through their Seat of Hope the participants be ready in their pursuit of employment and
program. The table below shows the list of classrooms and for better self-representation during interviews.
partners.
Philam Savings Awareness Initiative
KaAkbay Philam Volunteer Corps by Volunteer (PHILSaivs)
Philam Foundation continued to encourage volunteerism Through the Philam Savings Awareness Initiative by Volunteer
through house builds, tree-planting projects, sponsorship (PHILSaivs), the company’s CSR initiatives – Philam Paaralan
of children’s activities, and savings awareness campaign and Kaakbay Philam Volunteer Corps – were aligned with our
sessions. In 2014, 15 volunteer activities were initiated, core business of promoting financial awareness and literacy.
engaging more than 447 volunteers around the country who This was done through promoting the value of savings to our
gave a total of 2,341 volunteering hours. Philam Paaralan children (through a story telling session
and coin bank-making activity). Hopefully this would pave the
KaAkbay volunteers are now present in Metro Manila, Cebu way for them to be financially literate and learn the value of
and Davao. The volunteering experience will be expanded to preparing for their future.
Northern Luzon in 2015.

LIST OF CLASSROOMS AND PARTNERS

—
Class-
rooms
Name of School Built Partner

Taguig National High School, Pateros 3

Marasbaras Elementary School, Tacloban 3 Happy Hearts Fund
San Jose Central Elementary School, Tacloban 2 Give 2 Asia
Manlilisid Elementary School, Leyte 3 Happy Hearts Fund
Pastrana Central Elementary School, Leyte 3 Philam Life Agency Sales Group and Premier Agency
Philippine American Cultural Foundation Students of Pastrana Central Elementary School
Watt Samakki-Dhammikaram, Inc.,
MDRT Foundation
Cantahay Elementary School, E. Samar 2 Give 2 Asia
Salug Elementary School. E. Samar 2 National Museum
Sta. Fe Central Elementary School, Cebu 2 Philippine Stock Exchange Foundation, Inc.
Medellin Elementary School, Cebu 2 US Philippine Society
Loon South Central Elementary School, Bohol 2 National Museum
San Miguel Central School, Leyte 4 Happy Hearts Fund
Manlilisid National High School, Leyte 4 Happy Hearts Fund
Jawili Integrated School, Aklan 2 US Philippines Society
KaAKbay Philam volunteers pose with local residents
Don Francisco, Dinglasan Memorial School, Capiz 2 US Philippines Society
after their tree planting activity in Davao City.
Estancia Central Elementary School, Iloilo 2 US Philippines Society
Bayabas Elementary School, Negros Occ. 2 US Philippines Society

2014 PHILAM LIFE PERFORMANCE REPORT  |  17

 COMMITTING TO REAL LEADERSHIP

CORPORATE GOVERNANCE
Philam Life confirms its full compliance with the Code of Corporate Governance, and its
commitment to the highest standards of corporate governance is rooted in the belief that a
culture of integrity and transparency is essential to the consistent achievement of its common
goals. Creating a sustainable culture, where trust and accountability are as vital as skill
and wisdom, steers us toward achieving long-term value for shareholders and clients, and
strengthens our confidence in the institution.

18  |  2014 PHILAM LIFE PERFORMANCE REPORT

CORPORATE GOVERNANCE
—
Committing to Real Leadership

THE BOARD OF DIRECTORS

Roles and Responsibilities of the Board Orientation Program and Training
The Board of Directors exercises all the powers of the corpo- The Corporate Secretary, together with the key officers of
ration, and all business conducted, and all properties of the the corporation, provide the orientation for new directors
corporation, are controlled and held by them. The Board is ac- to explain the organizational profile, charters, by-laws,
countable to the shareholders and as such, it shall ensure the policies and procedures in the Corporation. Board Induction/
highest standard and governance in running the Corporation’s Orientation materials are also provided to the new directors
business and setting the strategic directions. The detailed for their reference. A corporate governance seminar is also
roles and responsibilities of the Board are specifically set forth arranged for each director to ensure adherence to best
in the By-Laws and the Manual of Corporate Governance. practices on corporate governance.

Board Independence Performance Evaluation

Each of the independent directors meets the guidelines set in The Corporation has established its own performance
the Manual of Corporate Governance. None of the independent evaluation process, the criteria of which are based on the
directors has any business or significant financial interest Insurance Commission’s Circular on Corporate Governance.
in the Company or any of its subsidiaries. They, therefore, Every April of each year, all members of the Board, are given
continue to be considered independent. assessment questionnaires for the purpose of evaluating the
performance of the Board, the Committees, the Chairman
Board Process of the Board, and the Chief Executive Officer. The results
Board meetings are held on a quarterly basis unless a are then collected and submitted to the Nomination and the
special meeting is necessary to consider urgent matters. The Governance Committee, which will then be submitted to the
Corporate Secretary schedules the meetings at the beginning Board for its notation.
of the year, which however may be subject to changes
depending on the availability of the directors. The Corporate Board Chairman
Secretary also ensures that Board materials are sent to the The Board Chairman’s other significant commitments are as
members at least five (5) business days in advance of the follows:
scheduled board meetings.
• Non-Executive Chairman, AIA Group Limited
In addition to the regular meetings, the directors also engage • Non-Executive Director, PCCW Ltd.
in informal meetings on a quarterly basis to further discuss • Non-Executive Director, PICC Property & Casualty Co. Ltd.
issues and strategies. Non-executive directors also find time • Director & President, AIA Foundation
to meet separately on a regular basis to discuss the business • Non-Executive Chairman, PineBridge Investments Asia Ltd.
affairs of the Corporation. • Non-Executive Director, PineBridge Investments Limited

The minutes of meetings of the Board and all Committee are Board and Committee Meetings in 2014
recorded and kept by the Corporate Secretary. The minutes The Board meets at least four (4) times a year. The directors
are open for inspection by the Board and the stockholders receive the meeting pack five days in advance. The meeting
upon request. pack includes among others, the Board and Committee
Meeting Minutes for approval of the Board, the business and
Election of Directors financial highlights of the Corporation and other items that
The Company uses a transparent procedure for the election need Board action and approval.
of directors. The Nomination and Governance Committee looks
into the qualifications of directors and thereafter the Board The presence of at least six (6) out of eleven (11) directors
deliberates on the recommendation of the Committee. At the is necessary to have a quorum and the affirmative votes of
stockholders meeting, the shareholders are duly informed by the majority of the directors present are required to decide a
the Corporate Secretary of the qualified nominees and of the matter except where the law or the by-laws require a higher
voting method and vote counting system. Each stockholder with number.
voting privilege shall be entitled to cumulate his vote in the
manner provided by law. After the election process, the Corporate The Board exercises discretionary powers and oversees the
Secretary shall count the votes and thereafter declare the duly management of the Corporation.
elected members of the Board.

2014 PHILAM LIFE PERFORMANCE REPORT  |  19

 CORPORATE GOVERNANCE
—
Committing to Real Leadership

The number of Board and Committee meetings held in 2014

are as follows:
BOARD OF DIRECTORS
Nomination
Board Chairman: Edmund Sze Wing Tse and
Board of Audit Governance Compensation
Directors Committee Committee Committee
Vice Chairman: Ambassador Jose L. Cuisia, Jr.
Meetings held & attended
for the year 2014 7 4 3 1
Executive Directors: Estelito G. Madrid, Jr., CEO
Reynaldo C. Centeno
Edmund S.W. Tse 7 - 3 1
Ariel G. Cantos
Gordon T. Watson 6 - 3 1
Independent/ Estelito G. Madrid, Jr. 7 - - -
Non-Executive Directors: Cesar A. Buenaventura Jose L. Cuisia, Jr. 6 - 3 -
Washington Z. Sycip Washington Z. Sycip 6 2 - 1
Francis G. Estrada Cesar A. Buenaventura 7 4 - -
Non-Executive Directors: Gordon T. Watson Francis G. Estrada 7 4 3 -
Ricardo J. Romulo Ricardo J. Romulo 6 - - -
Ariel G. Cantos 7 - - -
Corporate Secretary: Carla J. Domingo Reynaldo C. Centeno 7 - - -
Note: “-” indicates that the director is not a member of this committee

EXECUTIVE COMMITTEE INVESTMENT COMMITTEE Related Party Transactions

Chairman: Ex-Officio Chairman: Related party relationship exists and details of Related Party
Gordon T. Watson John Chu Transactions are provided in Note 31 of the 2014 Audited
Vice Chairman: Members:
Financial Statement. The Company has no RPTs that can
Estelito G. Madrid, Jr. Jose L. Cuisia, Jr., Estelito be classified as financial assistance to entities other than
G. Madrid, Jr., Cesar A. wholly-owned subsidiary companies. The Company ensures
Members: Buenaventura, Francis G. Estrada,
Cesar A. Buenaventura David Banks, Arleen May S.
that RPTs are conducted in such a way to ensure that they are
Ricardo J. Romulo Guevara, Tisha T. Darvin fair and at arms’ length, and disclose such facts in its Annual
Performance Report and the Audited Financial Statements.

Operating Philosophy
AUDIT COMMITTEE
NOMINATION AND The AIA Operating Philosophy of “Doing the right thing, in
Chairman: GOVERNANCE COMMITTEE the right way, with the right people ... and the results will
Cesar A. Buenaventura
Chairman: come” establishes the unique culture of AIA across all 16
Members:
Edmund S.W. Tse markets. This Operating Philosophy, among others, created
Washington Z. Sycip
Members:
the foundation for the AIA Code of Conduct, which sets out the
Francis G. Estrada
Francis G. Estrada ethical guidelines for conducting business on behalf of AIA, of
Jose L. Cuisia, Jr. which Philam Life is a member corporation. The Code serves
Gordon T. Watson
as guide in compliance, ethics and risk issues that can allow
everybody to contribute positively to the society where the
Corporation operates.

COMPENSATION COMMITTEE BOARD RISK COMMITTEE The Code applies to all AIA and Philam Life officers and
Chairman: Chairman: employees. The same standard also applies to our business
Edmund S.W. Tse Francis G. Estrada partners, including agents, contractors, subcontractors,
Members: Members:
suppliers, distribution partners, and others who act on behalf
Washington Z. Sycip Ricardo J. Romulo of AIA and Philam Life. Thus, the Corporation, its directors,
Gordon T. Watson Estelito G. Madrid, Jr. senior management and employees are mandated and
Ariel G. Cantos
required to comply with the policies set forth in the Code, and
the Compliance Department of the Corporation is tasked to
implement those policies, and monitor compliance therewith.

20  |  2014 PHILAM LIFE PERFORMANCE REPORT

The Code sets forth several policies which all officers and use improper means to influence another person’s business
employees should strictly comply and adhere to, and includes, judgment. All employees and officers are required to comply
among others, the following: with AIA’s Anti-Corruption Policy and Guidelines, and any
employee who has knowledge of, or in good faith suspects,
• Prevention of Insider Trading & Price Sensitive Information a violation of any of these laws, regulations or policies must
Policy, which defines the duty of the employees to safeguard report them promptly to the Compliance officer assigned to
material information from improper use. Under the Policy, it is their business or otherwise as set out in the Speak Up section.
illegal to trade securities while in possession of material non-
public information, and pass material non-public information • Anti-Money Laundering and Counter Terrorist Financing,
to anyone who may trade securities based on it or give others which provides the responsibility of employees in helping
recommendations to buy or sell securities. prevent money laundering and terrorist financing. The Policy
basically requires employees to identify clients and monitor
• Safe, Healthy and Secure Workplace, wherein the their activities, and report, if any, suspicious or unusual
Corporation is required to conduct its business in a manner activities consistent with applicable laws. Employees are
that protects the health, safety and security of Philam Life required to abide by anti-money laundering programmes
employees and customers. Situations that may pose health, established by AIA and its Business Units, and everybody in the
safety, security and environmental hazards must be reported organization is encouraged to contact the Compliance Officer,
promptly to management or to the appropriate Corporate the person responsible for money laundering prevention, as
Security personnel. soon as they have learned of any activity that might be unusual
or suspicious.
• Treating Customers Fairly, which demands that customers
should be treated fairly at all times, and that products, • Social and Environmental Responsibilities, which
services and advice must be appropriate to meet customer encourages the Corporation and its employees to make a
needs. Under the policy, marketing, advertising, and sales positive contribution to the society and the environment, to
related materials and services must always be truthful and contribute positively to the social and economic development
accurate, and misrepresenting or attempting to mislead or of the communities in which it operates, and to promote
deceive customers by use of unsupported or fictitious claims health, financial literacy, education and other community
about Philam Life products, or those of its competitors, is needs. The Corporation and its employees volunteer time and
not acceptable. The Corporation is required to provide high funds to programs that promote health, financial literacy,
standards of service and respond promptly and fairly to education and other community needs. AIA and Philam Life
customer feedback. are committed to reduce the impact of its operations on the
environment and raise awareness about sustainability by
• Supplier Selection, which provides that selection of suppliers taking part in activities that highlight these issues.
and vendors should be selected on the basis of performance
and merit in accordance with a fair and transparent Whistleblower Policy
process. Requirements for suppliers and vendors to follow As part of Corporate Governance, Philam Life adheres to AIA’s
the standards in the Code must be included in the vendor comprehensive Whistleblower Program, which is designed to
management program. handle reports of misconduct and inappropriate behaviour. It
aims to establish corporate values and culture that support
• Fair Dealing, which requires business with the customers, ethical behaviour. The Program also prohibits retaliation against
service providers, suppliers and competitors to be conducted any employee for making a good faith report of an actual or
in a fair manner as the Corporation seeks competitive suspected violation of the Code of Conduct, laws, regulations or
advantages only through legal and ethical business practice. Philam policies.
Improperly taking advantage of anyone through manipulation, Reporting of concerns or suspicions may be made by multiple
concealment, abuses of privilege information, intentional means as provided in the Code. The report may also be made
misrepresentation of facts or any other unfair practice is not by using the AIA Group Ethics and Compliance Hotline (PLDT)
tolerated by the Corporation. 1010-5511-00-00-245-4179 or 105-11-800-245-4179.

• Anti-Corruption and Bribery, which basically prohibits all Philam Life likewise adheres to the AIA Anti-Corruption and
employees, agent, or independent contractor in providing Bribery Policy, which provides that no employee, agent or
bribes or other improper benefits to another person in order to independent contractor may provide bribes or other improper
obtain or retain business or unfair advantage in any business benefits to another person in order to obtain or retain business
interaction involving AIA, Philam Life, its customers and or an unfair advantage in any business interaction that involves
employees. Under the Policy, the Corporation is not allowed to the Corporation, its customers, and employees.

2014 PHILAM LIFE PERFORMANCE REPORT  |  21

 CORPORATE GOVERNANCE
—
Committing to Real Leadership

EXECUTIVE COMMITTEE PHILAM LIFE EXECUTIVE

COMMITTEE MEMBERS:
Seated (L-R): Ms. Ledesma,
Chief Executive Officer: Estelito G. Madrid, Jr. Mr. Madrid, Atty. Domingo,
Ms Guevara, and Mr. Banks.
Chief Financial Officer: David N. Banks Standing (L-R): Mr. Javier,
Mr. Santos, Mr. Cantos, Mr.
BPI-Philam President and CEO: Ariel G. Cantos Zantua, and Mr. Cariaso.

Head Of Human Resources: Gerard M. Cariaso

Chief Investment Officer: Arleen May S. Guevara

Chief Marketing Officer: Jaime Jose M. Javier, Jr.

Chief Agency Officer: Anagel L. Ledesma

Head of Vitality and

Chief Operating Officer
for Affiliate Companies: Allan R. Santos

Head of Information Technology: Nilo C. Zantua

22  |  2014 PHILAM LIFE PERFORMANCE REPORT

—
List of Stockholders

Percent of Beneficiary Date of

Name of Stockholder Shares Held Class Amount Paid Ownership Nationality Ownership Appointment

Hong Kong
AIA Company Limited 199,560,512 Common 1,995,605,120.00 99.99993%
SAR
Edmund S.W. Tse AIA Company
1 Common 10.00 Chinese Jul 19, 1991
Non-Executive Chairman/Director Limited
Gordon T. Watson AIA Company
1 Common 10.00 British Jan 11, 2011
Non-Executive Director Limited
Jose L. Cuisia, Jr. AIA Company
1 Common 10.00 Filipino Jul 26, 1993
Non-Executive Vice Chairman/Director Limited
Francis G. Estrada AIA Company
1 Common 10.00 Filipino Apr 18, 2006
Independent Director Limited
Cesar A. Buenaventura AIA Company
1 Common 10.00 Filipino Sep 12, 1983
Independent Director Limited
Ricardo J. Romulo AIA Company
1 Common 10.00 Filipino Apr 3, 1987
Non-Executive Director Limited
Washington Z. Sycip AIA Company
1 Common 10.00 American Apr 26, 2001
Independent Director Limited
Ariel G. Cantos AIA Company
1 Common 10.00 Filipino Jul 16, 2013
Executive Director Limited
Reynaldo C. Centeno AIA Company
1 Common 10.00 Filipino Sep 28, 2005
Executive Director Limited
Estelito G. Madrid, Jr. AIA Company
1 Common 10.00 Filipino Sep 14, 2012
Executive Director Limited
Estate of Luis Yulo
149 Common 1,490.00 0.00007% Filipino

TOTAL 199,560,671 1,995,606,710.00 100.00000%

— —
Philam Group Chart of Ownership Capital Structure

AIA Company, Limited Authorized Capital Stock:

P2,000,000,000.00

The Philippine American Life and General Insurance Company

Subscribed and Paid-Up:
P1,995,606,710.00
(1)

51% 100%
BPI-Philam Life Assurance Corporation Philam Properties Corporation
No. of Shares Issued &
(2) 10.3873%
Outstanding:
(5)
39% 32.7558% 2.658%
Perf Realty Corporation Philam Tower Condominium Corporation
3.1661%
199,560,671 shares
(3) 30% 10.8659% (6)
40% 33.9964% 6.6050%
Kapatiran Realty Corporation Philam Tower Management Corporation
3.3330%
Treasury Share:
100%
Philam Equitable Life Assurance Company, Inc. 100% 439,329 as of April 2013
18/F Holdings, Inc.

Par Value:
(7)
100% 39.9940%
Philam Asset Management, Inc. 45/F Holdings, Inc.
P10.00/share
(8)
100% 80.3250%
Philam Call Center Services, Inc. Tower Club, Inc.
(4)
(4)

Philam Foundation, Inc.

 CORPORATE GOVERNANCE
—
Board of Directors

EDMUND S.W. TSE JOSE L. CUISIA, JR.

Non-Executive Chairman/Director Vice Chairman/Director

Aged 77, Mr. Tse began his career in the industry when Aged 70, Ambassador Cuisia is the
he joined AIA in Hong Kong in 1961. In 1975, he was Ambassador Extraordinary and Plenipotentiary
appointed President and Managing Director of the to the United States of America and is the
AIG-owned Nan Shan Life Insurance Company, Limited Vice-Chairman of Philam Life. He is also the
(Nan Shan), one of the top insurance companies in Chairman of the Board for The Covenant Car
Taiwan. He was appointed Chairman of Nan Shan in Company, Inc. and the Vice-Chairman of the
1990, and reappointed in 2004. Board of SM Prime Holdings (SMPHI). He holds
directorates in PHINMA Corporation, Holcim
In 1983, he was named President & CEO of AIA, Philippines, Inc., Manila Water Company, Inc.,
eventually becoming Chairman and CEO in 2000. In (all of which are publicly listed companies),
1996, he was elected to the AIG Board of Directors PHINMA, Inc., BPI-Philam Life Assurance Co.
and appointed Vice-Chairman in 1997; he was named (BPLAC) and AIG Shared Services, Inc.
Senior Vice-Chairman in 2001. He served as AIG Co-
Chief Operating Officer from 2002 to 2003. Following Ambassador Cuisia previously served the
his retirement as Chairman and CEO of AIA in June Philippine Government as Governor of the
2009, he served as the Honorary Chairman until Philippine Central Bank and Chairman of its
December 2010. Monetary Board from 1990 to 1993. He was
also appointed Commissioner, representative
Mr. Tse is the Non-Executive Chairman of AIA Group of the Employer’s Group, for the Social
Limited. Security System (SSS) from September
to December 2010. The Ambassador was
He serves many community and professional also Governor for the Philippines to the
organizations as well as educational institutions and International Monetary Fund and Alternate
is President of the AIA Foundation, which supports Governor to the World Bank. Prior to service
charitable causes in Hong Kong. In 2001, Mr. Tse was in the Central Bank, he was Administrator and
awarded the Gold Bauhinia Star by the Government of CEO of the Philippine Social Security System
the Hong Kong Special Administrative Region. He has from 1986 to 1990. He received his Bachelor
also received an Honorary Fellowship and an Honorary Science degree in Commerce from De La
Degree of Doctor of Social Sciences from The University Salle University and holds a Master’s degree
of Hong Kong. In 2003, he was elected to the Insurance in Business Administration from the Wharton
Hall of Fame, the most prestigious award in the School of Business. Ambassador Cuisia has
insurance industry. He was the first and so far the only been a Director of the Company since 1994.
Chinese to receive this prestigious award.

24  |  2014 PHILAM LIFE PERFORMANCE REPORT

REYNALDO C. CENTENO ARIEL G. CANTOS RICARDO J. ROMULO
Executive Director Executive Director Non-Executive Director

Aged 59, Mr. Centeno served as Aged 55, Mr. Cantos is the President Aged 82, Mr. Romulo is a Senior Partner
Chief Operating Officer of Philam and Chief Executive Officer of BPI- of Romulo Mabanta Buenaventura Sayoc
Life. Prior to this position, he was Philam Life Assurance Corporation. & De Los Angeles, one of the oldest law
the company’s Chief Actuary and Mr. Cantos is a member of the firms in the Philippines.
Chief Finance Officer. Board of Directors of the Philam
Life Group, and sits as a Trustee He specializes in commercial and
He is a Fellow of the Society of of Philam Foundation, Ayala-FGU corporate transactions, and is a Director
Actuaries (USA), the Actuarial Alabang and Ayala-FGU Makati of BASF Philippines, Inc., Johnson
Society of the Philippines, and the Condo Corporation. & Johnson (Philipines), Inc., Honda
Life Management Institute. He is Philippines, Inc., Zuellig Pharma
also a Member of the American Before his current appointment, Mr. Corporation, Maersk-Filipinas, Inc. and
Academy of Actuaries and the Cantos was Senior Vice President is Chairman & Director of Cebu Pacific
International Actuarial Association. and Chief Agency Officer of Philam Airlines and director of JG Summit
Life. He has had an enriching and Holdings, Inc.
He holds a Bachelor of Science successful career in Philam Life’s
degree in Mathematics, cum Agency Distribution Channel, which Mr. Romulo was the Chairman of the
laude, from the University of he served for close to 30 years. He Makati Business Club for 19 years,
the Philippines, and a Master held various positions within the and remains a member of the Board of
of Science degree in Actuarial channel such as Profit Center Head Trustees. He was a member of the 1986
Mathematics from the University of of Accident & Health Products; Constitutional Commission which drafted
Michigan. He is a graduate of the Director of Manila Agencies; and the present Constitution of the Republic
Top Management Program of the Director of Provincial Agencies. of the Philippines. He was also member
Asian Institute of Management. of the Council of State under President
Mr. Cantos earned his Bachelor’s Corazon Aquino, and the Governance
Degree in Economics, Honors Advisory Council under President Gloria
Program, at the Ateneo De Manila Macapagal-Arroyo.
University, Loyola Heights, Quezon
City. He holds a Bachelor of Science degree,
cum laude (1955) from Georgetown
University and a Doctor of Laws (J.D.)
degree (1958) from Harvard Law School.
De La Salle University awarded him the
Degree of Doctor of Education, honoris
causa, in 1990.

2014 PHILAM LIFE PERFORMANCE REPORT  |  25

 CORPORATE GOVERNANCE
—
Board of Directors

ESTELITO G. MADRID, JR. GORDON WATSON CESAR A. BUENAVENTURA, O.B.E.

Executive Director/ Non-Executive Director Independent Director
Chief Executive Officer
Aged 51, Mr. Watson is the Regional Aged 85, Mr. Buenaventura is the
Aged 67, Mr. Madrid served as Senior Chief Executive responsible for the Managing Partner of Buenaventura,
Advisor to the Regional CEO of AIA and Group’s businesses operating in Echauz and Partners Financial Services,
was a member of the Board of Directors Hong Kong, Macau, Korea, Australia, a financial advisory firm. He started his
from 2012 to 2014. He is also a member Philippines, Vietnam, New Zealand, career at Shell in 1956, and was the first
of the board of directors of BPI-Philam Sri Lanka and India as well as the Filipino CEO and Chairman of the Shell
Life Assurance Corporation since April Group Corporate Solutions business, Group of Companies in the Philippines
2013. He is the current President of the the Group’s Partnership Distribution in 1975 until his retirement in 1990. He
Philippine Life Insurance Association and AIA Vitality. stayed on as non-executive chairman until
(PLIA), the umbrella organization of all 1992.
life insurance companies operating in the Mr. Watson has been with AIG/AIA
Philippines. for 30 years in various leadership He was a member of the Monetary Board
positions. Prior to rejoining AIA of Central Bank of the Philippines (1981 to
Mr. Madrid started his career as Section Group in 2011, he was Global Vice 1987), the Board of Regents of the Univer-
Manager at Procter & Gamble before join- Chairman and Regional CEO of sity of the Philippines (1987 to 1994) and
ing the life insurance industry in 1971. He ALICO Japan and Asia. Prior to this the Board of Trustees of the Asian Institute
started as a professional career agent of role, he was ALICO’s Global Chief of Management (1994 to 2007). He was
Manulife Financial and later on became a Operating Officer, playing a key Chairman of the Board of Atlantic Gulf &
Sales Unit Manager in 1984. By 1985, he be- role in the completion of the sale of Pacific Co. of Manila from 2000 to 2010,
came an Agency Director and after only one ALICO to MetLife. and in 2014; Vice-Chairman from 2011 to
year became the First Filipino President of 2013. He is currently a director of the fol-
Manulife Financial, serving from 1985 to Before joining ALICO, Mr. Watson lowing organizations: DMCI Holdings, Inc.,
1995. He was President of Ayala Financial was Deputy President of AIA with Semirara Coal Company, iPeople, Inc.,
from 1995 to 1996, and was the founding responsibilities for Hong Kong, Petroenergy Resources Corp., Concep-
President and CEO of Pru Life UK from 1996 Singapore, Thailand, Malaysia, cion Industries, Pilipinas Shell Petroleum
to 2006, later on serving as Chairman of the Indonesia and Vietnam. Prior to this Corp., and Philam Life. He is also Director
Board from 2007 until 2012. role, he was President and CEO of of Manila International Airport Authority.
AIG Life Korea.
He is the author of “ Business Without Mr. Buenaventura graduated from the Uni-
Capital – Insurance Selling”, a part of the Mr. Watson holds a Masters degree versity of the Philippines with a Bachelor
“I Did It, So Can You” book series of the in Business Administration from of Science degree in Civil Engineering.
Carlos Palanca Foundation Inc. published University of Hull in the UK and is a He received his Master’s degree in Civil
together with Anvil Publishing Inc. Fellow of the Chartered Insurance Engineering majoring in Structures from
Institute. Lehigh University, Bethlehem, Pennyslva-
He holds a Bachelor of Science in nia in 1954, as a Fulbright scholar. In 1991,
Commerce degree from De La Salle Mr. Buenaventura was made Honorary
University in 1969. Officer of the Order of the British Empire
(OBE) by Her Majesty Queen Elizabeth II.

26  |  2014 PHILAM LIFE PERFORMANCE REPORT

FRANCIS G. ESTRADA WASHINGTON Z. SYCIP CARLA J. DOMINGO
Independent/Non-Executive Director Independent Director Board Support - Corporate Secretary

Aged 65, Mr. Estrada has served on the Aged 93, Mr. SyCip is the Founder of Atty. Domingo is currently the Head of
boards of over 40 private and public SGV, the Philippine’s largest professional Legal & Corporate Secretary of The
companies in Asia, the U.S. and Australia. services firm. He is one of the founders and Philippine American Life and General
He was Managing Director/COO of P.T. Chairman Emeritus of the Asian Institute Insurance Co (Philam Life). She also
First Indonesian Finance and Investment of Management; member of the Board serves as the Corporate Secretary
Corporation (1975 to 1980), co-founded of Overseers of the Graduate School of of BPI-Philam Life Assurance
and served as CEO of the Asian Oceanic Business at Columbia University; Honorary Corporation (formerly Ayala Life).
Group (1982 to 1991), and co-founded and Chairman of the Euro-Asia Centre in
served as President and CEO of William E. INSEAD; Honorary Life Trustee of The Asia Atty. Domingo served as corporate
Simon and Sons, Asia (1992 to 1997). Society; and member of the Board of a secretary of various Philam
number of major corporations in Asia and companies from 2008 to January
Upon his return to the Philippines in other parts of the world. 2014, to wit: Philam Equitable
1997, Mr. Estrada co-founded and chaired Life Assurance Company; Philam
Equity Managers Asia, Inc. (Philippines). He served as President of the International Properties Group of Companies;
Federation of Accountants; was a member Philam Asset Management Inc.;
Mr. Estrada has served as an independent of the Board of the Joseph H. Lauder Philam Call Center Services, Inc.;
director or adviser to several for-profit Institute of Management and International the Tower Club, Inc. and Philam
organizations, including: Ayala Land Studies (University of Pennsylvania) and the Foundation, Inc. She also served as
Inc.; Energy Development Corp.; Rizal International Advisory Board of the Council Deputy company secretary of AIA
Commercial Banking Corp.; EEI Corp; on Foreign Relations; was Vice-Chairman Group Limited from February 7, 2014
and RCBC Savings Bank. He has also of the Board of Trustees of The Conference to February 6, 2015.
lent his time and expertise to several Board; and Chairman of the Asia Pacific
international non-profit organizations in Advisory Committee of the NYSE . He Atty. Domingo is a member of the
business, government, the private sector, served on the international boards of Integrated Bar of the Philippines,
and the academe. He was Governor, several large corporations, including the and a Fellow of the Institute of
Trustee, and President and CEO of the American International Group. Corporate Directors. Atty. Domingo
Asian Institute of Management (AIM), and is a graduate of the University of the
was Chairman of the Board of Trustees of Mr. SyCip graduated from the University East, with a Bachelor of Arts degree
De La Salle University (DLSU). of Santo Tomas in the Philippines with a major in Political Science, where she
Bachelor of Science degree in Commerce graduated Magna Cum Laude. She
Mr. Estrada holds Bachelor of Arts degree and Master of Science in Commerce with took her Bachelor of Laws degree in
in Literature and a Bachelor of Science highest honors. He attended Columbia Uni- San Beda, College of Law.
degree in Business Administration versity in New York for postgraduate work,
from DLSU, and a Master in Business and served in the U.S. Air Force. He has
Management, with Distinction, from been conferred several honorary doctorate
the AIM. He completed the Advanced degrees by universities in the Philippines
Management Program at the Harvard and Australia, and is the recipient of several
Business School in 1989. honors and international awards.

2014 PHILAM LIFE PERFORMANCE REPORT  |  27

 —
Statement of Financial Position
December 31, 2014 and 2013
All amounts in thousands of Philippines Pesos

Growth
2014 2013 vs. PY%

Assets
Cash and Cash Equivalents 4,096,818 6,313,256 -35%
Insurance Receivables, net 883,891 926,332 -5%
Financial Assets At Fair Value Through
Profit Or Loss 31,869,114 21,338,352 49%
Available-For-Sale Financial Assets 148,666,656 142,512,074 4%
Loans and Receivables, net 29,853,553 28,542,253 5%
Accrued Income 3,240,328 3,183,578 2%
Investment In Subsidiaries and Associates 2,678,523 2,678,523 0%
Investment Properties, net 848,940 899,099 -6%
Property and Equipment, net 1,230,413 1,002,036 23%
Other Assets, net 3,420,399 1,685,464 103%
Total Assets 226,788,635 209,080,967 8%

Liabilities And Equity
Insurance Contract Liabilities, net 125,039,658 116,110,859 8%
Reserve for Policyholders’ Dividends 1,114,993 1,152,069 -3%
Policyholders’ Dividends 8,924,832 9,072,613 -2%
Liabilities for Supplementary Contracts 643,811 675,807 -5%
Premium Deposit Fund 1,365,152 1,673,274 -18%
Derivative Liabilities, net 18,493 19,507 -5%
Insurance Payables 368,751 190,009 94%
Accounts Payable and Accrued Expenses 2,274,185 2,450,659 -7%
Other Liabilities 1,803,441 1,265,515 43%
Total Liabilities 141,553,316 132,610,312 7%

Share Capital 2,000,000 2,000,000 0%

Contributed Surplus 25,000 25,000 0%
Treasury Shares (109,832) (109,832) 0%
Reserves For:
Fluctuation on Available-For Sale Financial Assets 43,628,810 40,303,812 8%
Remeasurements Of Retirement and Other
Post‑Employment Benefit Schemes 781,149 353,908 121%
Share-Based Payments 10,654 8,939 19%
Retained Earnings 38,899,538 33,888,828 15%
Total Equity 85,235,319 76,470,655 11%

Total Liabilities and Equity 226,788,635 209,080,967 8%

28  |  2014 PHILAM LIFE PERFORMANCE REPORT

—
Statement of Total Comprehensive Income
for the year ended December 31, 2014
(With comparative figures for the year ended December 31, 2013)
All amounts in thousands of Philippines Pesos

2014 2013 Growth

(revised) vs. PY%

Revenues And Other Income

Net insurance premiums
Gross premiums on insurance contracts 18,599,876 20,134,731 -8%
Reinsurers’ share of gross premiums on insurance contracts (109,323) (112,094) -2%
18,490,553 20,022,637 -8%

Investment income 12,476,650 12,670,602 -2%

Fair value gains (losses), net 3,311,773 (1,919,730) -273%
Gains on available-for-sale financial assets, net 672,990 1,002,783 -33%
Foreign exchange gain, net 40,992 591,071 -93%
Other income, net 185,778 1,449,975 -87%
Total revenues and other income 35,178,736 33,817,338 4%

Expenses
Benefits and claims expenses, net
Gross benefits and claims paid on insurance contracts 13,483,380 12,595,424 7%
Reinsurers’ share of benefits and claims paid
on insurance contracts (17,457) (46,948) -63%
Change in insurance contract liabilities, net 7,916,487 6,195,711 28%
21,382,410 18,744,187 14%

General and administrative expenses 3,423,256 2,971,841 15%

Commissions and other acquisition expenses 2,509,408 2,303,228 9%
Investment expenses 553,010 533,379 4%
Interest expense 422,596 457,830 -8%
Insurance taxes, licenses and fees 261,354 204,518 28%
Total expenses 28,552,034 25,214,983 13%

Income Before Income Tax 6,626,702 8,602,355 -23%

Income Tax Expense 1,615,992 1,617,669 -0%
Net Income For The Year 5,010,710 6,984,686 -28%

Other Comprehensive Income

Items that will be subsequently reclassified to profit or loss
Changes in fair value on available-for-sale financial assets 3,997,988 2,186,761 83%
Fair value gains transferred to profit or loss (672,990) (1,002,783) -33%
3,324,998 1,183,978 181%

Item that will not be subsequently reclassified to profit or loss

Remeasurements of retirement and other post‑employment
benefit schemes 427,241 579,046 -26%
Total other comprehensive income 3,752,239 1,763,024 113%

Total Comprehensive Income For The Year 8,762,949 8,747,710 0%

2014 PHILAM LIFE PERFORMANCE REPORT  |  29

 —
Statement of Changes in Equity
for the year ended December 31, 2014 and 2013
All amounts in thousands of Philippines Pesos

Reserve for Re-

measurements
Reserve for of Retirement
Fluctuation on and other Reserve for
Share Treasury Available-for- Post-employment Share-based Retained
Capital Contributed Shares Financial Assets Benefit Schemes Payments Earnings
(Note 19) Surplus (Note 19) (Note 7) (Note 27) (Note 20) (Note 19) Total

Balance At January 1, 2013 2,000,000 25,000 - 39,119,834 (225,138) 3,272 26,904,142 67,827,110

Comprehensive Income For The Year

Net Income For The Year - - - - - - 6,984,686 6,984,686
Other Comprehensive Income - - - 1,183,978 579,046 - - 1,763,024
Total Comprehensive Income For The Year - - - 1,183,978 579,046 - 6,984,686 8,747,710

Transactions With Owners

Cost Of Share-Based Payments - - - - - 5,667 - 5,667
Acquisition Of Treasury Shares - - (109,832) - - - - (109,832)
Total Transactions With Owners - - (109,832) - - 5,667 - (104,165)

Balance At December 31, 2013 2,000,000 25,000 (109,832) 40,303,812 353,908 8,939 33,888,828 76,470,655

Comprehensive Income For The Year

Net Income For The Year - - - - - - 5,010,710 5,010,710
Other Comprehensive Income - - - 3,324,998 427,241 - - 3,752,239
Total Comprehensive Income For The Year - - - 3,324,998 427,241 - 5,010,710 8,762,949

Transaction With Owners

Cost Of Share-Based Payments - - - - - 1,715 - 1,715

Balance At December 31, 2014 2,000,000 25,000 (109,832) 43,628,810 781,149 10,654 38,899,538 85,235,319

30  |  2014 PHILAM LIFE PERFORMANCE REPORT

 About Philam Life
The Philippine American Life and General Insurance
Company (Philam Life) is the country’s premier life
insurance company. Established on June 21, 1947,
Philam Life offers an extensive line of products in the
industry that provides solutions to various financial
needs including life protection, health insurance,
savings, education, retirement, investment, group and
credit life insurance.

Philam Life is a member of AIA Group Limited, the

largest independent publicly listed pan-Asian life
insurance group.

About AIA
AIA Group Limited and its subsidiaries (collectively
“AIA” or the “Group”) comprise the largest independent
publicly listed pan-Asian life insurance group. It has a
presence in 18 markets in Asia-Pacific – wholly-owned
branches and subsidiaries in Hong Kong, Thailand,
Singapore, Malaysia, China, Korea, the Philippines,
Australia, Indonesia, Taiwan, Vietnam, New Zealand,
Macau, Brunei, a 97 per cent subsidiary in Sri Lanka,
a 26 per cent joint venture in India and representative
offices in Myanmar and Cambodia.

The business that is now AIA was first established in

Shanghai over 90 years ago. It is a market leader in the
Asia-Pacific region (ex-Japan) based on life insurance
premiums and holds leading positions across the
majority of its markets. It had total assets of US$167
billion as of 30 November 2014.

AIA meets the long-term savings and protection needs

of individuals by offering a range of products and
services including life insurance, accident and health
insurance and savings plans. The Group also provides
employee benefits, credit life and pension services
to corporate clients. Through an extensive network
of agents, partners and employees across Asia-
Pacific, AIA serves the holders of more than 28 million
individual policies and over 16 million participating
members of group insurance schemes.

AIA Group Limited is listed on the Main Board of The

Stock Exchange of Hong Kong Limited under the stock
code “1299” with American Depositary Receipts (Level
1) traded on the over-the-counter market (ticker
symbol: “AAGIY”).
 The Philippine American Life & General Insurance Company
15F-18F Philam Life Head Office, Net Lima Building, 5th Avenue corner 26th St., Bonifacio Global City, Taguig 1634 Philippines
Tel. (632) 528-2000 | philamlife.com

32  |  2014 PHILAM LIFE PERFORMANCE REPORT