1.

The rise of Gen AI

*One of the, if not the, biggest technological advancements made in 2023 was
generative Artificial Intellegence. The advancements made in tech since the
pandemic have boomed and ultimately changed the financial sector. This is something
we’re likely to see more of this year. Specifically, the influence on fintech and
the application of generative AI on chatbots is expected to grow this year through
banking technology, such as apps and other online money services, which could
produce new revenue streams.
What generative AI has done is open a new world of innovations that can help
personalize financial planning and investment management. One example of this is in
insurance. Since AI has an ability to find trends in data, AI helps insurers create
personalized products which could lead to more accurate risk assessments and ease
insurance costs for individuals.

2. Capturing Digital Dividend

After 25 years, most banks have mastered the digital customer experience, with a
strong focus on service. This has made digital banking functionally correct and
emotionally devoid. 99% of banking touchpoints today are remote; no one is talking
to a banker anymore.
Chatbots and virtual assistants powered by AI have become prevalent in the banking
sector to provide quick and efficient customer support, answer queries, and assist
with basic transactions.
Like for example, i don't know if your familiar with MIA of Metrobank. MIA stands
for Metrobank Interactive Assistance. Instead of calling the customer service
hotline, Metrobank credit cardholders can go to Facebook Messenger for assistance
from Mia (Metrobank Interactive Assistant).[1] With Mia, you can learn more about
your credit card application, balance, recent transactions, and rewards redemption.
Banks can use their vast stores of consumer data along with gen AI to move beyond
basic demographic segmentation and treat each customer as an individual. The
ultimate objective is to offer the same authentic, personal experience through
digital channels that banks have always provided in branches.

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The purpose of non-bank audited financial statements is similar to that of audited

financial statements for banks or any other type of organization. Audited financial
statements provide an independent and objective assessment of an entity's financial
position, performance, and cash flows. While the specific regulatory and reporting
requirements may vary for different types of entities, the fundamental purposes of
audited financial statements remain consistent in providing reliability,
transparency, and credibility to financial information.

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Have you ever heard about these words like Reinsurance assets? Insurance
receivables? Insurance Contract liabilities? These might sound family to some of
you or some would be wondering where are these words coming from. So, let me
explain those words that are exclusively for the speciaalized industry.

As I observe in the Financial Position of The MAnufaturers Life Insurance C0. There
are some unfamiliar words that I observe. One of these are Insurance Receivables,
Reinsurance Assets, and Insurance Contract liabilities.
Now, what are these words?

Lets tackle about the Reinsurance Assets:

Did you know that the most expensive insurance claim of all time were collectively
15.4 trillion made during the financial collapse in 2008. This amount is more than
the GDP of the entirety of the US. And well you might be wondering how herculean a
tasked it must have been for the insurance company to pay out this amount?
Ever wondered if insurance firms have any sort of insurance for times like these?
Well, this is where the concept of REINSURSANCE comes in the picture.
Reinsurance- is also known as insurance for insurers or stop loss insurance

It is the practice whereby insurers transfer poriton of their risk portfolios to

other parties by some form of agreement. It reduces the likelihood of paying a
large obligation resulting from an insurance claim. These term was the most
important term in an insurance business.

What is reinsurance?
Suppose you buy an insurance policy from an insurance company. Then you will have
to pay premiums for this policy, in return the insurance company will safeguard you
in case of any risk . in this way, the insurance company will have a lot of
liability or a lot of possible claim of amounts. During the COVID-19 or other
natural disaster, the insurance company had a difficulty in paying these huge
amoung of liabilities. This is where reinsurance companies come to rescue.

Reinsurance- are the insurane of the insurance company. Here, the insurance company
transfer portion of its risk profiles to other parties, which are the reinsurers,
by some form of agreement to reduce the likelihood of paying a large obligation
resulting form high insurance claims. Here, the insurance company that seeks the
risk cover is known as a "cedent". And the reinsurance company is known as the
"ceded"or "reinsurer".

Here, The THE MANUFACTURERS LIFE INSURANCE CO. (PHILS.), INC.is the cedent whose
asking help to cover some or portion of its risk profiles to MUNICK RE wherein they
both have an agreement named QUOTA SHARE REINSURANCE AGREEMENT in 2016 whereby the
Company will cede to the reinsurer proportionate share of premiums reinsured as
stipulated in the agreement. Even though the Parent Company may have reinsurance
arrangements, it is not relieved of its direct obligations to its policyholders and
thus a credit exposure exists with respect to reinsurance ceded, to
the extent that any reinsurer is unable to meet its obligations assumed under such
reinsurance agreements.

The Parent Company is neither dependent on a single reinsurer nor are the
operations of the ParentCompany substantially dependent upon any reinsurance
contract.
As of December 31, 2022 and 2021, the balance of reinsurance assets amounted to
P=65.75 million
and P=125.83 million, respectively

By spreading the risk, an insurance company can take on clients whose coverage
would be too great of a burden for a single insurance company to handle alone. In
this way, bothe the insurance and the reinsurer earn more busienss as well as
revenues.

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Life Insurance Contracts

For life insurance contracts with fixed and guaranteed terms, estimates are made in
two stages. At the inception of the contracts, the Parent Company determines
assumptions in relation to future deaths, voluntary terminations, investment
returns and administration expenses. These assumptions are used for calculating the
liabilities during the life of the contract. A margin for risk and uncertainty is
added to these assumptions.

Terms
Life insurance contracts offered by the Parent Company mainly include whole life,
term insurance,endowments and unit-linked products.

Whole life and term insurance are conventional products where lump sum benefits are
payable on death, provided death occurs within the terms of the policy.
Endowment products are products where lump sum benefits are payable after a fixed
period or upon death if it occurs before the period is completed.
Unit-linked products differ from conventional policies in that premium, net of
applicable charges, are allocated to units in a pooled investment fund and the
policyholder benefits directly from the total investment growth and income of the
fund.