CONTENTS OVERVIEW 04 AIA at a Glance 06 AIA Philam Life at a Glance 08 Message from the Chief Executive Officer 11 Financial Highlights BUSINESS REVIEW 12 Agency Distribution 15 Corporate Solutions 16 Marketing 19 Affiliates and Subsidiaries 20 Investments 20 Real Estate 20 Insurance Operations 21 Information Technology We at AIA Philam Life make a 21 Our People positive difference in the lives of 26 Our Management Team Filipinos by giving them peace of mind through the innovative 28 Philam Foundation protection and long-term savings solutions we offer, helping them live CORPORATE GOVERNANCE Healthier, Longer, and Better Lives. 30 Corporate Governance We are our customers’ partner in 31 Board of Directors creating a secure future for them 40 Operating Philosophy and their loved ones. 47 Enterprise Risk Management The strength and stability of our 49 Audit and Related Party Transactions Committee business makes it possible for us to fulfill our commitments to our FINANCIAL STATEMENTS customers, while access to global insight and expertise through our 52 Stockholder Information parent company, AIA Group, enables 53 Financial Statements us to create relevant solutions that address our customers’ needs. 2 | AIA PHILAM LIFE ANNUAL REPORTREPORT 2020 The business that is now agents; which in many cases have AIA, was first established continued for generations. by CorneliusThe business Vander that Starr is now agents; which in many cases have Guided by our commitment to make OVERVIEW in ShanghaiAIA, was in first1919. established continued for generations. ABOUT AIA a significant, positive impact on our by Cornelius Vander Starr Since then, AIA has grown to become customersGuided andby our communities commitment across to make in Shanghai in 1919. a significant, positive impact on our the largest independent publiclyThe business Asia,that is AIA’s now purposeagents; is towhich help in millions many cases have ABOUTSince then, AIA has grown to become listed pan-Asian life insuranceAIA, group, was first ofestablished peoplecustomers live Healthier, andcontinued communities Longer,for generations. across spanningAIAthe 18largest markets independent and servingby publicly Cornelius VanderBetterAsia, StarrLives. AIA’s Our purpose Purpose is to guides help millions the Guided by our commitment to make the holderslisted ofpan-Asian more than life 38 insurancein million Shanghai group, indecisions 1919. of people we livemake Healthier, and the Longer, actions we a significant, positive impact on our individualspanning policies 18 andmarkets more and than serving takeBetter as an Lives.organisation Our Purpose – empowering guides the the holders ofSince more then, than AIA 38 hasmillion grown todecisions become wecustomers make and and the communities actions we across 16 million group scheme members. and enabling people to understand individual policiesthe largest and more independent than publiclytake as an organisationAsia, AIA’s purpose – empowering is to help millions and manage their health, while Our contributions16 million group havelisted scheme supported pan-Asian members. lifethe insurance and group, enabling of peoplepeople tolive understand Healthier, Longer, meeting their long-term savings and spanning 18 markets and servingand manage Better their Lives.health, Our while Purpose guides the social andOur contributionseconomic progress have supported of our the the holders of more thanprotection 38 meetingmillion needs. theirdecisions long-term We believe we savingsmake that and and the actions we markets,social while and also economic advancing progress the of our individual policies and morehelpingprotection than to create needs.take a healthieras We an organisationbelieve Asia that – empowering reach andmarkets, impact while of16 life alsomillion insurance advancing group scheme the members. and enabling people to understand is onehelping of the to most create important a healthier and Asia acrossreach Asia. andWe alsoimpact take of lifepride insurance in and manage their health, while Our contributions have supportedvaluableis one things theof the wemost can important do for our and the long-termacross Asia. relationships We also take we pridehave in meeting their long-term savings and social and economic progresscommunities,valuable of our things today we and can in do the for future. our developedthe long-term with our customersrelationships and we have protection needs. We believe that markets, while also advancingcommunities, the today and in the future. developed with our customers and helping to create a healthier Asia reach and impact of life insurance is one of the most important and across Asia. We also take pride in valuable things we can do for our the long-term relationships we have communities, today and in the future. developed with our customers and The business that is now agents; which in many cases have AIA, was first established continued for generations. 0044 | AIA PHILAM LIFE ANNUAL REPORT 2020 004 004 by Cornelius Vander Starr Guided by our commitment to make in Shanghai in 1919. a significant, positive impact on our Since then, AIA has grown to become customers and communities across the largest independent publicly Asia, AIA’s purpose is to help millions listed pan-Asian life insurance group, of people live Healthier, Longer, spanning 18 markets and serving Better Lives. Our Purpose guides the the holders of more than 38 million decisions we make and the actions we individual policies and more than take as an organisation – empowering 16 million group scheme members. and enabling people to understand and manage their health, while Our contributions have supported the meeting their long-term savings and social and economic progress of our protection needs. We believe that markets, while also advancing the helping to create a healthier Asia reach and impact of life insurance is one of the most important and across Asia. We also take pride in valuable things we can do for our the long-term relationships we have communities, today and in the future. developed with our customers and 004 AIA AT-A-GLANCE OVERVIEW ABOUT AIA The only international life insurer headquartered and THE LARGEST NO.1 listed in Hong Kong and LISTED COMPANY WORLDWIDE FOR OVERVIEW 100% FOCUSED ON THE HONG KONG MDRT REGISTERED ON ASIA STOCK EXCHANGE MEMBERS which is incorporated and The only multinational headquartered in Hong Kong company to top the table for six consecutive years Serving the holders of more than PAID MORE THAN PRESENCE REVIEW BUSINESS 38 MILLION US$16 BILLION individual policies benefits and claims during and over IN 2020, providing vital financial support for customers 16 MILLION participating members of group insurance schemes Provides protection 18 to people across MARKETS Asia with total sum assured of almost US$2 TRILLION CORPORATE GOVERNANCE CORPORATE FINANCIAL STATEMENTS AIA PHILAM LIFE ANNUAL REPORT 2020 | 5 ANNUAL REPORT 2020 001 OVERVIEW ABOUT AIA PHILAM LIFE ABOUT AIA PHILAM LIFE The Philippine American Life and General Insurance Company (AIA Philam Life) is the country’s premier and most trusted life insurer for over seven decades now. We focus our knowledge and experience on the Philippines and, as part of the AIA Group, are strengthened by their presence in the Asia-Pacific region. Almost 8,000 Our vision is to be the Philippines’ agents pre-eminent life insurance provider, nationwide driven by our mission of racing against risk to protect every Filipino family and empower them to achieve healthier, longer, and better lives. Almost 800,000 Almost 1,000,000 PHP1.39 billion individual policies insured group in capital for its members life insurance license Excess capital PHP500 million Over 5,000 4x the amount in capital for its group policies set by the non-life insurance issued Insurance license Commission 6 | AIA PHILAM LIFE ANNUAL REPORT 2020 OVERVIEW ABOUT AIA PHILAM LIFE OVERVIEW OUR STRENGTH AIA Philam Life won two awards in the Digital Transformer and Information For over seven decades now, AIA Visionary categories at the prestigious IDC Digital Transformation Awards Philam Life has been keeping its — 2020 for Fusion, its digital underwriting platform, which bested nominees commitment to its customers and across the Philippines. stakeholders. BUSINESS REVIEW BUSINESS The Philam Group was recognized for the third consecutive year as one of We have been recognized many times, — the Philippines’ Best Companies to Work For in Asia 2020 as presented by through awards and accolades from HR Asia. the Philippine government, from the business community here and abroad, AIA Philam Life was feted by the Insurance Commission (IC) and The from our peers in the industry, and Institute of Corporate Directors (ICD) with two Golden Arrow Awards for its through the continued trust of our — performance in the 2019 ASEAN Corporate Governance Scorecard (ACGS). policyholders. This is the second consecutive year the Company has been recognized by the ICD. As part of the AIA Group, we share AIA Philam Life received the Silver Award for Financial Advisers of the a network of trust that has been — painstakingly built across several Reader’s Digest Quality Service Award in 2020. countries for over a century. We For the past 16 years, AIA Philam Life has been consistently recognized remain strong and steadfast in our by Reader’s Digest Asia’s Trusted Brand Awards with 11 Platinum and five commitment, so that those who rely — Gold awards. The recognition is based on consumer surveys measuring on us can enjoy better lives. trustworthiness, credibility, quality, value, understanding customer needs, innovation and social responsibility. CORPORATE GOVERNANCE CORPORATE In 2013, AIA 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. In 2008, AIA Philam Life was recognized by the Philippine government, — through the Overseas Workers Welfare Administration, for its outstanding programs for Overseas Filipino Workers. AIA Philam Life received the Presidential Citation from the Philippine — government for its contribution to nation building (1994).