Generali Phils benefits from ‘regrouping’

MANILA, Philippines - Generali Philippines is beginning to reap the benefits of  “regrouping” which it started in 2009.

Generali Philippines is a joint venture between Generali Group of Italy and BDO Unibank Inc.

Premiums grew 38 percent from January to September this year.

Total premium income last year was placed at slightly a little over P2 billion from a “regrouped” P1.7 billion in 2010.

Premiums were up P3.2 billion but that was stacked with a lot of single premiums or one-time gains.

In 2011, it ranked 10th overall in a field of 32 players at that time.

So far, new individual insurance sales expanded by 30-percent, mainly arising from regular premium products.

 Individual renewal premiums grew by 59 percent, while group life and health premiums were up 25 percent.

Generali Philippines president and chief executive officer Renato Vergel de Dios said the key driver is its sustained efforts to beef up its primary bancassurance distribution channel.

In fact, it is the only distribution channel as a result of the “regrouping.” It dropped the agency force and concentrated on building its bancassurance network.

 Bancassurance is the practice of selling insurance policies within a bank’s branch network, in this case BDO’s 750 or so branches.

It is referred to as “cross selling” by the Bangko Sentral ng Pilipinas (BSP), meaning a bank is allowed to sell products of its subsidiaries or sister companies within the branches.

Selling the life insurance products are 500 trained financial advisers (FAs) or Generali Philippines employees fielded in the branches, which the Generali Philippines chief executive calls “virtual insurance kiosks.”

The reorientation of Generali Philippines, plus investment in sales training and supervision, improve field management system, and concentration on its broad-based target market of its distribution channel, has resulted in nearly threefold improvement in regular sales productivity since 2009.

“Our efforts in developing a professional bancassurance sales force or financial advisers (FAs) by building strong fundamentals have started to bear fruit,” Vergel de Dios said. “This move has brought us closer to our ultimate objective of helping bank clients buy the right insurance products for their expressed needs. In the process, we enabled our FAs to achieve their own financial aspirations via a rewarding sales career in Generali Philippines.”

Likewise, the life insurer not only relied almost exclusively on bancassurance, but stuck to just selling traditional protection products.

It did not sell single pay premium products, and variable or unit linked investment insurance products.

Generali Philippines will drop its non-life insurance business at the start of 2013 to further solidify its position in the life insurance industry.

 By shifting its focus towards its core life business and maximizing its partnership with BDO, Generali Philippines is poised to achieve its ambitious growth targets that will move the company further up in industry rankings.

“With our strong foundation and right fundamentals now in place, we are extremely excited at the prospect of taking Generali Philippines to the next level,” Vergel de Dios added.

In its interim report after the third quarter of 2012, the Generali Group has likewise embarked in its own “regrouping.”

Generali launched a three-year plan for growth in Italy, with over €300 million of investments on brands, networks and customer service improvements.

The insurer launched a multi-channel business model to be integrated into just thee brands – Generali, Alleanza and Genertel – from its existing 10 brands. The new structure is expected to enable Generali to become profitability and market leader in Italy.

Part of the regrouping was adapting to the changing face of the global economy.

The “center of gravity” of global business and economic growth will shift eastward from the mid-Atlantic to reach China and India in 2050.

At least 11 countries were identified as part of the growth drivers coming mainly from Asia and Africa.

 Majority of the growth drivers of the future are emerging countries, including China, Bangladesh, Vietnam, Egypt, Brazil. And Generali has its finger in these emerging economies.

It is located in 60 countries worldwide. Aside from China, It has offices in HongKong, India, Indonesia, Japan, Thailand, United Arab Emirates, Vietnam, and the Philippines.

The Generali Group is one of Europe’s largest insurance providers and the biggest European life insurer, with 2011 total premium income of almost 70 billion euro.

It is also one of the world’s top asset managers and a unique real estate operator, with 82,000 employees worldwide and 65 million clients.