Insurance premiums of BDO affiliate hits P1.2 billion

MANILA, Philippines - The Banco de Oro Unibank Inc. (BDO) and Generali Pilipinas bancassurance team has generated individual life premiums worth P1.175 billion in the first five months of 2009.

Bancassurance is the practice of selling or cross selling the products of the bank’s subsidiaries. BDO controls up to 40 percent of Generali Pilipinas, a life and non-life insurance company.

BDO is considered the largest commercial bank in the Philippines in terms of assets and branch network. The life insurance segment of Generali Pilipinas was ranked among the top 10 life insurers last year.

The practice of bancasssurance will result in fee-based earnings for BDO, one of the earnings stream increasingly contributing to its bottomline.

Generali Pilipinas president and chief executive officer Derek Chan said that the first five-month performance creates an atmosphere of confidence to outperform 2008. 

Last year, the life insurer reportedly sold premiums worth P1.36 billion from the P1.45 billion in 2007. The life insurance industry was after all not spared the global crunch as premiums fell by over 30 percent in the period in question.

“Our initial target was to reach P1.2 billion in June 2009. With the favorable condition, I believe bancassurance production alone may exceed Generali Pilipinas’ entire companywide production of P2.6 billion by the end of the year,” Chan said in a statement.

Meanwhile, Generali Pilipinas senior vice president Melvin Esteban attributed the bancassurance distribution channel’s growth to the synergy between BDO’s Branch Banking Group and the insurer’s Financial Advisors (FAs).

FAs are licensed sales agents of Generali Pilipinas, based in the branches of BDO. They acquire their license with the Insurance Commission and get additional training as financial advisers.

Generali Pilipinas has 250 FAs while BDO has 702 branches. The ideal ratio is one FA for every branch although it depends on the potential of the branch locations.

“Our growth is a reflection of the clients’ confidence in the GP and BDO partnership. Our approach to our clients is holistic. We want our clients’ wealth to grow and be protected as well. And this is very much appreciated by our clients,” Esteban added.

He added that new products would also be rolled out this year in cooperation with BDO.

Generali Pilipinas is a joint undertaking of Assicurazioni Generali of Italy, one of the world’s largest insurance company, Jerneh Asia Berhad of Malaysia, a specialist insurer in the marine, industrial, and engineering fields, and BDO.

It is a composite license holder issued by the Insurance Commission, meaning it can sell both life and non-life policies. Its products and services include individual life insurance, group life and medical, auto and home insurance, small and medium business protection, as well as commercial property insurance. It has offices in Metro Manila, Bacolod, Baguio, Cebu, Davao and other major cities throughout the country.