AXA eyes composite license in 2017

MANILA, Philippines - After completing the full integration of Charter Ping An Corp. in 2016, AXA Philippines will be applying for a composite license with the Insurance Commission (IC).

Last month, life insurer AXA Philippines acquired non-life insurer Charter Ping An from GT Capital Inc., one of the largest conglomerates in the country.

A composite license allows an insurer to sell life and non-life insurance products. There are four existing composite license holders in the industry.

The minimum paid-up capital for a life or non-life insurer is P550 million starting next year. It is presently at P350 million.

The required paid-up capital for a new entrant is P1-billion and it will escalate to P1.3 billion by 2020.

At the start of 2015, AXA Philippines has a capital base of P2.6 billion.

AXA Philippines president and chief executive officer Rien Hermans said having two lines under a single license reduces risks and increases opportunities.

Two licenses, means two client base, two link systems, while one license means one phone system, one Internet site, one link systems, operating platforms, among others.

With a composite license, the life and non-life operations will now compliment each other. And being part of a bigger conglomerate, the opportunities are increased several fold.

“The main value of putting the two lines under one brand, is that it makes doing business with AXA a lot easier,” Hermans said.

AXA can offer total solutions for the customer’s total life span, more products with AXA increase the chances are customers will stay with the insurer longer.

When a prospective client buys his first car, there is auto insurance through an auto loan with AXA’s bank partner; the first home, there is fire insurance through a mortgage loan; there is term insurance, whole life insurance, insurance with an education plan, or variable unit linked (VUL) insurance with investments; health insurance; or even a health plan.

“The better the renewal rate, the higher the profitability. It can mean higher persistency in life group, and a higher retention rate in non-life segment,” the AXA Philippines chief executive said.

Charter Ping An is the fourth best performer in terms of premiums earned among the country’s 69-strong non-life insurance industry. AXA Philippines ranked second best among the 30 life insurers.

Both are members of GT Capital, the holding company of the Ty clan, which likewise includes the Metropolitan Bank & Trust Co. (Metrobank), the Philippine Savings Bank (PSBank), Global Power, Federal Land, Toyota Motors Philippines, among others.

Charter Ping An has a huge corporate base, not counting the GT Capital influences. Thus it opens up a lot of opportunities for the group life business of AXA, which presently stands at 850 companies out of the 20,000 corporates in the Philippines.

AXA Philippines has a bancassurance partnership with Metrobank and PSBank thus access to the combined 915-branch network and their respective client base.

A prospective third line is the health and health insurance business, which is said to increase AXA Philippines profitability by at least 10 percent.

AXA Philippines is part of the AXA Group of France, currently the leading non-life international insurance company and the number three international life insurance company in Asia with strong presence in China, India, Hong Kong, Singapore, Thailand, Indonesia, and Malaysia.

With 103 million customers from 59 countries, AXA is considered a leader in insurance and asset management. According to the 2015 Fortune Global 500 list, AXA is the 20th largest corporation and 29th in the 2015 Forbes Global 2000 rankings.