According to the Convention on Biological Diversity (CBD): “Forest biological diversity results from evolutionary processes over thousands and even millions of years. Ecological forces such as climate, fire, competition and disturbance drive these processes. Furthermore, the diversity of forest ecosystems (in both physical and biological features) results in high levels of adaptation, which is an integral component of their biological diversity. Within specific forest ecosystems, the maintenance of ecological processes is dependent upon the maintenance of their biological diversity.”
Our vision is to be one of the world’s finest non-life insurance companies and our mission is to become a platform through which all of our stakeholders are able to achieve their life purpose
As a Philippine general insurance carrier, we understand the increasing volatility of global climate patterns. One example of which would be the 410 ppm of CO2 that was measured by the Mauna Loa observatory in April 2017. Residing in Metro Manila, home to the fourth highest population density among the world’s 20 largest megacities (according to the German insurer Allianz), we well understand the vulnerability of man-made assets to catastrophic events. Likewise, the impact of generational shifts, changes in the structure and performance of the global financial industry, and the impact of the internet also need to be considered.
Half the genes in our corporate DNA cause us to be prudent, to protect our capital and enterprise value from current and near-term disruptions. On the other hand, the other half urges us to be willing and ready to adapt to what is, for perspective’s sake, just the latest in a very long series of economic, technological and climatological cycles. Indeed, we should remember that we live in a time that is probably the most prosperous period in the history of mankind.
Tacit knowledge
Over the past few years, in order to protect and grow our core business, we have had to build our expertise across a number of areas. We have developed instruments and processes such as detailed hazard maps, proprietary all-digital solutions and loss mitigation programmes for motor and property customers. We have also placed greater focus on motorcar restoration and recycling, e-commerce operations for brand new and recycled spare parts, business process outsourcing services, cybersecurity, and claims processing. Another important area of focus would be greenhouse gas mitigation through reforestation and experiments in carbon dioxide dissociation.
These new capabilities excite us and we look forward to more initiatives. As a rule, these should not only complement and strengthen our core insurance business, but should also provide us with new markets, new partners, new skill sets and new ways of seeing the world. Indeed, we are close partners with highly reputable companies from Switzerland, Australia, the US and Japan.
We have experienced good results by combining our core team of insurance professionals with engineers, scientists, designers and professionals from other industries. This depth and diversity of talent allows us to address problems in new ways, to combine existing concepts into new configurations and to see opportunities through fresh eyes.
Professor Ricardo Hausmann, Director of the Centre for International Development and Professor of the Practice of Economic Development at Harvard University, directly correlates a society’s economic prosperity to its ability to produce complex and pioneering products. Professor Hausmann points out that know-how, or ‘tacit knowledge’ (as coined by Michael Polanyi), resides in a ‘personbyte’ (as coined by César Hidalgo), or the amount of knowledge that can be reasonably held by one person. The more complex and the less ubiquitous a product is, the higher the number of diverse personbytes are needed to develop and make it.
As we work to better solve our customers’ existing problems and capitalise on opportunities, we develop increasingly complex products, particularly in the form of services. Consequently, we always keep our eyes open for all-new personbytes to help us along our evolutionary path. These can be found in the form of individual professionals, service providers or business partners, both locally and globally.
The Standard Insurance vision
We are one of the Philippines’ leading general insurers and the largest motorcar insurer in the country. We have more than 1,300 associates that work from 62 locations nationwide. Our vision is to be one of the world’s finest non-life insurance companies. Our mission, meanwhile, is to become a platform through which all of our stakeholders are able to achieve their life purpose: for our associates, this would be to practise the craft of non-life insurance with dignity and professionalism both locally and globally; for our customers, it would be to receive the finest quality insurance cover at affordable prices; for our shareholders, it would be to receive a fair return on their capital; and for our business partners, it would be the continuation of mutually beneficial, sustained and long-term relationships.
For our customers to receive the finest quality insurance cover at affordable prices, our strategy requires that we achieve a number of things. We must achieve our scale and maintain a high level of unit sales, minimise our variable costs and receive satisfactory returns on our investments in human resources, physical assets and financial assets.
Achieving high unit sales requires our delivery systems to be efficient and our defect rates to remain under control. A key initiative to achieve this is the development and deployment of our core insurance system, named iINSURE. This provides us with flexibility, speed and cost efficiency by allowing us to create systems, subsystems and applications that benefit our intermediaries and our end customers. Similarly, our claims subsystem, iCATS, and RAPID, our motorcar adjustment subsystem, allow us to continuously improve the processing speed and quality of claims. Moreover, we are the first Philippine insurer to have its core systems hosted on the cloud through Amazon Web Services. This helps us with business continuity and will allow us to scale more efficiently in coming years.
New developments
We hope that regular new product offerings also support us in achieving high unit sales or, at the very least, help improve our brand in the eyes of our customers. One such recent offering is Ultrasafe, the country’s first insurance telematics product. We position it as a safety device that helps car owners track their cars and driving performance, as well as a pay-as-you-drive product. Another recent offering is our motor/life bundle, which combines a one-year-term life product provided by one of the country’s largest life insurers with our comprehensive motorcar insurance policy. We are just about to launch another new creation called the Zero Carbon Footprint product: this features an annual surcharge against which our company plants enough trees to offset a customer’s vehicle’s annual carbon dioxide emissions, which are typically estimated at about two metric tonnes.
To minimise our variable costs, which are mainly claims costs, we work to ensure that our reinsurance programme is robust and able to withstand increasingly destructive events. We have the largest coverage for catastrophic loss events among local insurers, and the members of our reinsurance panel, led by Munich Re (rated AA- by S&P), must be rated at least A- by S&P. As a result of this, our programme has responded to significant events very well over the years.
We believe that accidents are largely avoidable. As such, to minimise our variable costs, we strive to maintain underwriting discipline to keep our property and motorcar portfolios relatively low-risk. Similarly, we also try to work with clients to reduce the probability of them having an accident. For instance, we provide our customers with online safety driving courses and claims mitigation kits, each of which contains a driver safety card, a blessed Catholic statue and a Christian cross, as the Philippines is a predominantly Roman Catholic nation.
Another initiative to minimise our variable costs is the development of our 6.5-hectare technical and training centre. The centre allows us to reduce the financial losses arising from the number of vehicles declared as total losses each year. The facility, located around 90 minutes from the Philippines central business district, houses motorcar restoration, repair and recycling operations, all which comply with Philippine standards. For every three total-loss units incurred by the company, two units are restored and sold to the company’s employee retirement fund, which resells such units through an interest-bearing instalment sales programme to external buyers. The one unit that is not restored is recycled, with parts used for restoration or sold to the outside market through Blisam Trading. This is an e-commerce joint venture between the company’s services subsidiary Insurance Support Services International and Broadleaf of Japan, the operator of a Japanese e-commerce platform for trading recycled automotive parts.
As shown in recent years, we continue to invest in diversity, whether of skills, perspectives or approaches. Combined, these assets enable us to create, innovate and execute strategies in such a way that allow us to remain relevant today, and for the foreseeable future.
