US firm, local bank form bancassurance alliance

New York Life Insurance (Philippines) Inc. (New York Life) is holding talks with a domestic commercial bank to form a business alliance called bancassurance. New York Life, with an initial capital of P450 million, is a subsidiary of global insurer New York Life International.

Officials refused to give details of the talks except that they hope to finalize and formalize the alliance before the end of the first half this year.

"All we can say it that it is a local bank with extensive reach and an alliance with several foreign financial institutions," they said.

Bancassurance is a business arrangement which allows the insurer to tap client base and branch network of the bank to sell its various insurance products. These are marketed as a consumer products by the bank to its clients and prospective customers as an added incentive.

Thomas F. Flournoy, New York Life International chief of international agency operations, said in an interview that bancassurance is one of the many activities that it plans to undertake in the Philippines.

"We have also launched our work-site marketing offensive and we likewise forged an alliance with a leading pre-need company," Flournoy added.

New York Life has a program with CAP Life, a subsidiary of the College Assurance Plan (CAP) Group of Companies. CAP Life markets memorial plans and its alliance with New York Life offers added protection for the families of the plan holders.

The US-based life insurer remains open to forging more working relationships with other financial institutions, bank or non-bank to expand its reach to the Philippine market. It has three offices and branches with three more in the pipeline.

Second leading life insurer Sun Life of Canada (Philippines) Inc. has been holding talks with Security Bank Corp. for the same purpose.

Other existing alliances are Philippine AXA Life Insurance Corp. and the Metropolitan Bank and Trust Co. (Metrobank), Ayala Life Assurance Inc. and the Bank of the Philippine Islands (BPI), PCIB Cigna Life Insurance Corp. and Equitable PCI Bank.

Philippine American Life Assurance (Philamlife) and Insular Life Assurance, the first and third leading insurers, opened their own banks with an option to form alliances with other financial institutions.