CORPORATE HISTORY

THE SECRET TO MALAYAN'S UNWAVERING SUCCESS

MOVING VISION

RESTLESS is one word to describe the Philippines - and the rest of the world - in the early 1930s. Nations were biting their nails in anticipation of war. It was as though you can perceive a bomb ticking away in a short distance, only to realize it was the wild beating of your own heart that you're hearing.

It was amid this environment that Don Enrique T. Yuchengco - Father and Founder of what is now known as the Malayan Insurance - set up what he called then as China Insurance and Surety Company. People either saw it as an excellent move or a hasty endeavor, depending on one's penchant for risky undertakings. But for Don Enrique, it was the most practical business decision that he has ever made.

After all, the 1930s also marked the beginnings of the Commonwealth, which promised to be a transition government before the country gained its independence from the United States in 10 years. As the country prepared for its independence, Don Enrique not only saw liberty from foreign hands. But with the trained eye of a brilliant businessman, he foresaw a thriving economy and a prosperous future for the Philippines. Barring all skepticisms, Don Enrique took a leap of faith into the then uncharted waters of the insurance industry, while grasping the one possession that he had which others lack: VISION. This outstanding quality was later on inherited by his son, Alfonso.

ASHES TO GOLD

True to his vision, Malayan Insurance now ranks FIRST in the non-life insurance industry - a standing it has enjoyed for decades. From a handful of employees and a paid-up capital of P 147,500 when it opened doors on February 16, 1930; it now boasts of hundreds of employees in the Philippines and abroad, with a multi-billion-asset portfolio.

Indeed, Malayan Insurance has gone a long, long way. Then again, getting to the top was - to say the least - not a walk in the park.

When World War II broke out, the upward growth of China Insurance was suddenly put to a halt. In 1944, the company's operations were suspended. When the battle ended in 1945, only a shadow of the once thriving Manila was left. The war left billions of pesos worth of damage and economic losses to the country.

Nothing was spared. The Japanese liquidated China Insurance and Surety, Inc. during the occupation, and its capital assets seized by the occupation government. The former premier location of China Insurance on Gandara St., in downtown Binondo was reduced to rubble and ashes. But not its Founder.

With unwavering resolve to rebuild what was ruined, Don Enrique re-opened China Insurance and Surety Company in 1949. But this time in a "shanty" at 484 Rosario St., in Binondo, Manila.

Aside from the location, however, Don Enrique and his handful of dependable employees - inadvertently or not - built a more sturdy, resilient image of himself in the eyes of China Insurance's pre-war policyholders when he settled their claims for losses, even when his business was ravaged by war. That was pure, unadulterated palabra de honor in the eyes of the public. And with that move, China Insurance quickly regained its former stature in the insurance industry in the newly-independent Republic.

NEW NAME, NEW LEADER

In 1949, owing to an atmosphere of nationalistic fervor and a growing realization of the need to establish the identity of the brown race, China Insurance was renamed Malayan Insurance Company.

In the couple of years that followed, the reins of leadership was also gradually passed on to Don Enrique's son Alfonso - a practicing accountant who took advanced studies at Columbia University, New York. Alfonso learned the ropes of the business the hard way when he became Malayan's general manager, just only in his mid-twenties. He did two jobs - early morning to midday as a professor at the Far Eastern University, then after that worked late nights and even Sundays at Malayan. When Don Enrique passed away in 1953, he was more than equipped to head the fast-growing business.

SURGING AHEAD

Under Alfonso Yuchengco, Malayan Insurance experienced tremendous growth. The Malayan Group of Insurance Companies was established, having under its wing the Tokio Marine Malayan Insurance Co., Inc. (formerly known as Pan-Malayan Insurance Corporation), The First Nationwide Assurance Corporation and Bankers Assurance Corporation (formerly the Malayan-Zurich Insurance Company, Inc.). In July 2008, the Tokio Marine Malayan Insurance Co., Inc. merged with Malayan Insurance. The combined resources and capabilities of the two will further enhance Malayan Insurance’s leadership in the Philippine market.

The Group provided the machinery for local and global expansion. Between 1955 and 1976, offices were established in Hong Kong, Kuala Lumpur, Singapore, Brunei, Bangkok, Jakarta, Taipei, Guam, Papua New Guinea, the United Kingdom, Japan, Greece, France, Belgium, Germany, Mexico, Kenya and Holland; a subsidiary was established in the United States; and in the Philippines, regional offices and branches were opened in Luzon, Visayas and Mindanao.

In a speech delivered during the 1999 Annual Lecture of the Malaysian Institute, Ambassador Alfonso T. Yuchengco stated that, "Malayan was probably the first ASEAN-based insurance company to become truly multinational. It was the first to avail of the openness then of the various Asian countries to the establishment of branches by foreign insurance companies."

In 1983, Alfonso Yuchengco's daughter, Helen Y. Dee, was elected as the third president of Malayan Insurance, heralding a period of domestic expansion and modernization. She spearheaded the firm's modernization programs through innovative developments in manpower training, computer technology and insurance products and services. In 1982 and 1984, Mrs. Dee was elected Chairperson of the ASEAN Insurance Council (AIC).

STRONGER, STURDIER AT 75

The strength of Malayan Insurance has been reaffirmed internationally. AM Best, the world’s oldest and most authoritative insurance rating and information source, affirmed Malayan Insurance’s rating of B++ (Good) and assigned an issuer credit rating of “bbb” . The outlook on both ratings is stable, reflecting consistency in market leadership, strong risk adjusted capitalization, a stable stream of investment income and extensive reinsurance arrangements.

Standard and Poors also provided a BB (positive) rating despite the entire industry’s “negative financial strength” outlook, noting the company’s market franchise, satisfactory solvency and adequate level of reserves that support the company’s growth prospects.

Perhaps one of the more perceptible keys to Malayan Insurance's success is its constant pursuit of innovative products and services - all for the benefit of the policyholders who have placed their trust on the company over the years.

Proof of that is when Malayan created the first Filipino professional reinsurance company in the Philippines in 1956. While in the '60s, Malayan introduced the first Personal Accident Insurance vending machine - the Flight Travel Insurance Plan - and the first Personal Accident (PA) Christmas Card.

Malayan's "firsts" continued in the '80s when it again became the first insurance company to embrace modern technology. In 1983, Malayan networked all its systems and computerized its processes. While in 1987, it introduced another innovation in the country with Car Etching - a carnapping deterrent program - in cooperation with the Philippine Motor Association.

Malayan's prospective and existing policyholders in the 1990s were greeted with more pioneering products. In 1992, Malayan introduced the first fully-computerized motorcar insurance claims processing service, aptly called Express Claims Service. Another innovation of the standard motorcar insurance was the Loss of Use (LOU) insurance feature which provided policyholders with an additional benefit of transportation reimbursement when the insured vehicle is not available for use as a result of loss or damage. Wanting to further improve its service to its policyholders, Malayan provided motorcar insurance policyholders with a free Membership Road Assistance Program dubbed CAMILLE or Call Malayan Insurance Live Line.

In 1995, Fidel M. Alfonso, a well-known personality in the domestic insurance industry, and Yvonne S. Yuchengco, were elected Chairman of the Board and President of Malayan, respectively. Together, they embarked on a quest to raise the standards of insurance protection and service quality in the Philippine non-life insurance industry.

In 2001, Atty. Adelita Aquino Vergel de Dios, the country's former Insurance Commissioner during the administration of President Corazon S. Aquino, was elected Chairman of the Board of Malayan Insurance. Together with Yvonne S. Yuchengco, the company sought to increase the industry's penetration in the country, which the Insurance Commission identified as a low 11% of the "insurable universe." What Malayan did was to open new markets and channels to insurance product, and, provided the public insurance access through banks (through its marketing programs), pawnshops, cellphone service providers, utility service providers, money remittance outlets, credit cards and privilege cards, rural banks and livelihood cooperatives. After Atty. Vergel De Dios left the company in February 2008, Malayan Insurance welcomed its new Chairman of the Board, Mrs. Helen Y. Dee.

A stream of new products and packages were created by Malayan Insurance, enabling the ordinary Filipino to enjoy world class insurance protection through products like the Home Protect (an affordable insurance package for homeowners, town-house and condominium unit owners), the Automaster (a fully loaded automobile insurance package that provides superior features to the car-owner), Golfer's Insurance (a comprehensive insurance package for golfers), Business Protect (a packaged insurance product meant for small and medium business owners, offices and franchise holders), Malayan's Travelmaster (a comprehensive accident and medical insurance cover with travel assistance benefits), and the OFW Bantay Pamilya (a personal accident and hospitalization insurance plan designed for the family/dependents of overseas Filipino workers). The youthful leadership in Malayan then established a Quality Services Department - a first in the industry - which reviewed and improved the processes and transaction turn-around time of the company's front-line services, thereby raising the bar on customer service among the 94 insurance companies now doing business in the Philippines at the turn of the century. Malayan also successfully lobbied various local governments to mandate that business owners and building owners be required to obtain general liability insurance to protect those who would suffer an accident or be harmed while in their premises. The company also advocated for the national government to use the proceeds from the fire service tax to improve the country's Fire protection services. Today, the general public as well as the non-life insurance industry is benefiting from the leadership shown by Malayan Insurance.

Serving the varied needs of the market is at the core of Malayan Insurance's mission. And this mission was further affirmed when in 2002, it introduced the first valued insurance cover for high-end big bikes, called the Motorcycle 1. In keeping up with hard times, Malayan also saw fit to give the public the best way to invest their hard-earned peso when it introduced Text Insure in 2003 and One Peso a Day in 2004 - giving policyholders the first daily travel insurance conveniently available through SMS text.

Two innovative products were introduced in the market in 2005 namely: the Cell Protect which exclusively offered to Globe G-Plan subscribers that provides indemnity for lost or stolen or accidentally damaged cellphones and SIM cards; and, TravelMaster, a full protection travel insurance that responds to various emergencies and assistance while traveling such as accidents, medical assistance and recovery of lost or delayed baggage.

On its 75th year, Malayan honored its founder by successfully campaigning to rename Calle Nueva St. in Binondo to E.T. Yuchengco Street. Malayan also channeled its efforts on investment by developing the Malayan Plaza, a 36-storey residential condominium in Ortigas, which was inaugurated in 2005. Also in this year, Malayan launched Todo Asenso, a micro loan insurance product in partnership with the Rural Bankers Association of the Philippines (RBAP).

In 2006, two casualty line products were introduced, the PC Protect Insurance and Photo RX that cover the valuable owned computers and cameras against accidental damages and loss. As a part of its Corporate Social Responsibility Program, Malayan also launched in 2006 the Kabalikat Malayan Pondo Kabuhayan that supports the Gawad Kabuhayan sustainable livelihood projects of Couple’s for Christ. A portion of the insurance premiums paid by clients who renewed their comprehensive motorcar insurance and residential fire insurance policies will be donated to Gawad Kabuhayan. With much vigor, Malayan unveiled another product in 2007, the Foresight D & O Liability Insurance, a legal liability insurance for company executives and officers against any allegation of wrongful acts brought against them. TravelSure travel insurance product was also launched exclusively offered to passengers of the leading domestic airline in the country. Also in 2007, the Fire Assist product sachet protection to one’s property from losses due to fire and lightning was introduced.

At this very moment, the Malayan Group - from the Members of the Board down to the staff - are on a constant lookout for fresh, new ways to address the needs of the market. Never resting on its laurels, even as it has a strong hold at the top post in the non-life insurance market.

And of course, much of Malayan Insurance's success is also credited to the men and women who tirelessly present to the public the many virtues of its products and services. They are Malayan's intermediaries and Agents -- men and women who literally go to great lengths to offer the no.1 non-life insurance products in the country.

ENDURING LEGACY

Looking at the company's history, one can surmise that the lessons and legacies of three generations have not been kept in a wooden chest to rot and get musty. Instead, the wisdom and experience was passed on - such that when you look at Malayan today, the old school type of leadership is still very much present - made more potent with the injection of modern technology and unending dynamism.

Giants in the fields of business and politics have also shared their experience with the company. Among those who have served as Chairmen of the Board include Mariano Cuenco, former President of the Philippine Senate; Alfonso Sycip, a well-respected banker and business tycoon; Carlos P. Romulo, former President of the United Nations General Assembly and former Foreign Secretary; and Alfonso T. Yuchengco, Don Enrique's son who would later become Ambassador to the People's Republic of China (1986-1989) and Japan (1995-1998).

Excellent leadership, diligence, creativity and palabra de honor. These virtues kept the Company afloat when it was hit by circumstances that it had no control over. And these virtues are also the main reason why Malayan Insurance remains at its fittest - ready to take on any challenge - that the world places at its feet… for years to come.