Generali Pilipinas overshoots targets

MANILA, Philippines - Generali Pilipinas is confident that it would achieve, if not surpass its 2009 premiums targets with the way its bancassurance operations have been performing.

Generali Pilipinas is a joint venture life and non-life insurance company between Generali Asia and Banco de Oro Unibank Inc. (BDO). Generali Asia, in turn, is a regional alliance between Assicurazioni Generali (Generali) of Italy and Jerneh Asia Berhad of Malaysia.

The original 2009 premiums targets was reportedly set at P2.6 billion while the production of its bancassurance operations was envisioned to contribute at least P1.5 billion in first year premiums.

“As of the third week of July, our bancassurance operations have already reached P1.8 billion,” Melvin J. Esteban, Generali Pilipinas senior vice president told The STAR.

Esteban said that Generali Pilipinas is now mulling a revision of targets after the full first six months of the year.

Bancassurance is the practice of selling the products of a subsidiary within the premises of the bank’s branches, as well as its client base. The bank must own at least five-percent equity in the subsidiary practicing bancassurance. In this case, BDO controls up to 40 percent of Generali Pilipinas.

He attributes the bancassurance distribution channel’s growth to the synergy between BDO’s Branch Banking Group and the insurer’s financial advisors (FAs).

Esteban said that Generali Pilipinas was marketing traditional and whole life products. Majority of its bancassurance products are single pay premiums, with a few exceptions following the staggered payment format.

To speed up the process, they want to field a total of 300 FAs covering the 700 or so branches of BDO by end 2009. Its FA compliment stood at 260 at the start of July.

The ideal ratio is one FA per bank branch. “However, the present ratio of one FA for two or more branches will suffice,” the Generali senior vice president added.

Last year, Generali Pilipinas reported total premiums amounting to P1.36 billion, lower by 6.6 percent from the 2007 premiums of P1.46 billion. The official numbers have still to be released by the Insurance Commission (IC).

In the same period, the entire life insurance industry reported that premiums fell by roughly 33 percent to P50.6 billion from P76.2 billion in 2007.

For the top 11 players, total premiums shrunk by 34 percent to P46 billion from the P69.9 billion in 2007.

Generali Pilipinas is estimated to rank 10th overall last year, with a market share of 2.7 percent, after the taking the 9th spot in 2007.