MANILA, Philippines - Philippine American Life and General Insurance Co. (Philamlife) will seek to renegotiate its contract with Banco de Oro Unibank Inc. (BDO) to continue selling its policies through the commercial bank’s 700 branches nationwide.
Philamlife sells life insurance products within BDO’s network through Philamlife Equitable Life Assurance Co. (PELAC), a joint venture company between Equitable PCI Bank and Philamlife.
When BDO acquired Equitable PCI Bank in 2007, it assumed the bancassurance contract of PELAC. The contract, however, expires next year.
Prior to acquiring Equitable PCI Bank, BDO formed a joint venture company with Generali Asia, a regional alliance between Assicurazioni Generali of Italy and Jerneh Asia Berhad of Malaysia. Generali Pilipinas also practices bancassurance through the BDO branches.
“We want to renegotiate with them (BDO), but we are also looking at other banks for a bancassurance agreement,” Jose L. Cuisia Jr., Philamlife president and chief executive officer, said in a press briefing yesterday.
PELAC is a significant contributor of premium income to Philamlife. Last year, it registered premium income of P2.1 billion.
Philamlife reported gross premiums of P17.9 billion last year and net income of P3.3 billion. It has remained the industry leader over several decades, cornering almost 25 percent of the market.
Meanwhile, newly-appointed Philamlife board chairman Edmund Tse said they are always looking for opportunities to expand. Tse is the honorary chairman of the American International Assurance Co. Ltd. (AIA), the regional financial institution that has taken over Philamlife.
AIA takes over Philamlife from the troubled American International Group Inc. (AIG), which has been receiving more than $300 billion in various types of assistance from the United States government.
In turn, AIG sold a large number of its assets or placed them into special purpose vehicles (SPVs). The US government will, in turn, have majority control over the SPVs.
“What is also important is that the prospective acquisition must be a perfect fit for Philamlife,” Tse added.
Philamlife was placed on the auction block late last year as part of the money-raising activity of AIG to sell assets to repay the US government.
Tse said AIA wants to remain one of the most influential financial institutions in the Asia Pacific region. Last year, it reported $16 billion in assets and $23 billion in premium income. It has a policyholder base of 20 million across the region.