A Message from the President

           Inspite of the sluggish state of our economy brought about by the seemingly endless political wranglings in the country, the economic outlook for 2005 has made significant stride compared to that of 2004.  Our Gross Domestic Product rose by 5.1% in 2005.  The remarkable US$ 13.8 billion remittances of OFWs brought into the mainstream of economic activity, complemented by government and private sector partnership, have boosted growth in mining, telecommunications, manufacturing, and property development.  Significantly, this has seeped down to the level of the imperceptible growth of the non-life insurance industry.

            In the Philippine insurance market, notably the property line has remained soft due to stiff competition among local insurers and an on-going price wars among intermediaries.  This, however, is now being rationalized and addressed by the Insurance Commission to improve our nominal growth.

            For the year under review, I am pleased to report that your Company posted another year of modest achievement inspite of market constraints, as shown by the following results:

UNDERWRITING HIGHLIGHTS:

            In 2005, your Company has generated a gross premium of 176 million pesos with a net retention of 87.53%, and realizing a comfortable net income of 9.3 million pesos compared with 4.8 million pesos in 2004.  Net income went up by 93%. Through the years, we have steadily increased our retention levels, protecting it further with excess of loss programs.  We are assisted here by top re-insurers in the world.  For the past several years, we have experienced positive underwriting results, contributed mainly by our traditional lines:  Property and Casualty, Motor and Bonds.

FINANCIAL REPORTS:

            Our balance sheet reflected a stable financial liquidity by having a current asset ratio of 1.4:1.  Our administrative expenses increased by 5.4 million pesos or 11.5% from 47 million pesos in 2004 to 52.4 million pesos in 2005.  This is mainly due to our human resource development program, mandated salary increases and increase in power rates.

            Total resources of the company as of December 31, 2005 amounted to 390 million pesos, posting a slight decrease from 399 million pesos in 2004.

INVESTMENT

            Our investment and other income were heavily weighed down as a result of lower investment rates due to the sluggish state of our economy.  Our investment in treasury bills amounted to 89 million pesos and investment in stocks amounted to 33 million pesos.  Our conservative approach in investment policies have cushioned us through the years, instead of adhering to the volatile and higher risk of other financial instruments.

OUTLOOK AND PLANS :

            As the level of our economic growth continues to increase, your Company expects a more favorable prospect in the years to come.  We anticipate in the foreseeable future, a change in our political climate that will promote a better economic environment.  Your Company will continue its strategy of offering quality service to its clientele and producers.

            On behalf of management, I wish to express my sincerest gratitude to the members of the Board of Directors, Stakeholders, Intermediaries, Officers and staff of the company for their invaluable support and contributions towards the achievement of our company’s goals.

DIONISIO M. DUNGCA, JR.
President