6 foreign insurance firms woo Philippine National Bank

MANILA, Philippines - Six foreign financial institutions are interested in forming an alliance or a joint venture bancasssurance with Philippine National Bank (PNB) of taipan Lucio Tan..

Those interested are Fubon Life of Taiwan, Samsung Life of Korea, Allianz AG of Germany, Zurich Life of Switzerland, a Japanese, and Malaysian insurer.

Emmanual M. Dooc, commissioner of the Insurance Commission (IC), confirmed PNB is the  target of several foreign players wanting to bring its insurance business via the bancassurance route, either through a joint venture or acquisition.

“It is the only bank of significant size and financial stability that will make sense for a foreign player to join forces,” Dooc said, confirming the attention on PNB.

He however refused to name the said players.

However, sources close to the parties involved confirmed the ongoing “courtship” saying formal meetings have already been held.

PNB Life Insurance Inc., the existing partner of the bank, may be involved in the possible entry of a foreign player.

PNB Life is already practicing bancassurance. Last year, the insurer reported premium income of P4.6 billion, with a significant chunk coming from bancassurance sales.

Sources said Samsung Life held two formal audiences with PNB officials, the second ending on a bad note. “They asked too many questions without entering into formal due diligence,” they confirmed.

Early this year, the IC confirmed the strong interest of Samsung Life in the Philippine market. “They are looking for a partner, preferably with a bank partner,” IC officials revealed.

PNB has 662 domestic branches and 76 overseas branches, including 900 automated teller machines (ATMs) and several representative offices overseas.

The domestic branches would speed up sale of insurance policies while the overseas branches and representative offices are involved in remittances.

The major commercial banks are already involved with big life insurers, and making a killing through bancassurance arrangements.

Industry leader BDO Unibank Inc. presently operates a joint venture with Generali of Italy, while the Metropolitan Bank & Trust Co. is allied with AXA of France.

The Bank of the Philippine Islands (BPI) formed a joint venture company-BPI Philam Life Assurance Corp. with the Philippine American Life and General Insurance Co. (Philam Life).

Sunlife Financial allied with the Rizal Commercial Banking Corp. (RCBC), and Manulife Financial of Canada tied up with China Banking Corp.

These insurers presently account for more than 80 percent of the country’s total premium income, with the bancassurance partnerships reporting stronger growth rates than insurers relying solely on sales from agency.