Manulife, CBS creating ‘sachet’ insurance

MANILA, Philippines - Manulife Philippines is in talks with China Bank Savings (CBS) for bancassurance products designed for the thrift bank’s retail market base.

Bancassurance is basically a partnership between a bank and a life insurance company, wherein insurance products are sold through the bank’s branch network.

China Banking Corp. (China Bank) and Manulife Philippines have formed a joint venture bancassurance company a few years back called Manulife Chinabank Life Assurance Corp. or MCBLife.

It presently ranks ninth among the 32 life insurance companies in 2013, with premium income worth P8.2 billion.

Recently, the Bangko Sentral ng Pilipinas (BSP) has liberalized further the practice of bancassurance, which includes thrift banks that are allied with huge conglomerates. In the case of CBS, it is a subsidiary of China Bank, which, in turn is a member of the SM Group.

Manulife Philippine president and chief executive officer Ryan Charland admitted that they are in discussion with CBS officials on the type of life insurance products that will be sold through the thrift bank.

“We need to work together with CBS for the right product, because the customer profile is different from the retail market of the main bank (China Bank),” Charland said.

He added that Manulife Philippines has experience throughout the region to help draw up the type of offering suited for the so-called retail or sachet market.

Manulife Financial has a huge presence in most of Asia and the Pacific, which accounts for a quarter of the business of the Canada-based financial and insurance giant.

CBS president Alberto Emilio V. Ramos said in an earlier interview that the life insurance products should have a biased towards savings and protection rather than investments.

“It should be priced inexpensively with probably lower coverage, but protection nonetheless for our bank clients, some of which were formerly unbanked,” Ramos said.

MCBLife presently works through the nearly 400 branches of China Bank, which employs 220 financial sales associates (FSAs). CBS branch network would surpass the 140 branches mark by next year with the integration of recently acquired Planters Development Bank.

What may be working in the life insurer’s favor is that their future bancassurance products with CBS may not require FSAs.

Meanwhile, Charland said that they want to operate a total of 50 branches by end 2014, from its existing 30. Those branches will house the 5,400 sales agents presently deployed nationwide.

Manulife Philippines hopes to expand its premium income by at least 30 to 35 percent this year.

Last year, Manulife report weighted premium income of P15 billion while MCBLife stated P8.2 billion, or a combined weighted premium income of P23 billion.