The largest Filipino life-insurance company, Insular Life Assurance Co. Ltd., which partnered with Union Bank of the Philippines (UnionBank) to offer bancassurance services to Filipinos, is positioning the partnership to become the dominant player in the country’s banca
ssurance industry.
UnionBank President and COO Edwin R. Bautista said the bank is targeting the top spot in the bancassurance industry with the forged partnership with Insular Life, on the back of the strong sales culture it already has and a sales group dedicated to servicing customers’
bancassurance needs.
“But the goal is to be one of the top bancassurance partnerships in the country. I think our main advantage is the sales culture in our branches. We separated the sales from the operation functions of the branch a long time ago,” Bautista said.
The Insular Life-UnionBank bancassurance partnership was approved by the Insurance Commission on March 8, 2017, while the Bangko Sentral ng Pilipinas gave its nod on April 4, 2017.
According to Bautista, a total of 200 sales agents will be allotted for bancassurance alone, but UnionBank’s current 400 sales personnel in its branches nationwide can still sell bancassurance products. The bank has around 227 licensed sales agents.
“That’s on the bank side, then we will have 200 more for the banccassurance only. But the others will also be allowed to sell, so in effect we have 600 people selling,” Bautista said.
In the other banccassurance arrangements, a separate company is formed to cater to bancassurance needs, while for the partnership UnionBank entered into the agreement directly. This means that bank secrecy issues, as well as data privacy issues will not be a problem since the agents will be coming from the bank. If it is from a different company, then access to information of client will not be easy.
UnionBank is also improving its technology to adapt to the changing needs of its clients, including the modification of its branches to its digital platform.
However, no expansion in the number of branches is being eyed for the year.
“Like I said before, we are not expanding branches, we are into digital transformation. In fact, even our existing branches are going to be modified as we go along. That, I think, will make us different from our competitors as they are still talking about expansion of their branches. Our branch expansion will happen on the mobile phone,” he said.
Under the bancassurance distribution partnership, UnionBank and its wholly owned subsidiary, City Savings Bank, will distribute and sell the insurance products of Insular Life to its over 6 million bank clients spread across a network of over 300 branches and offices.
For this bancassurance business, Insular Life will provide a differentiated model for UnionBank tailored to fit the bank’s customer segmentation.
Omar T. Cruz, former president of a bancassurance joint venture and former Philippine national treasurer, was appointed senior executive vice president and head of the bancassurance operations.
“This business will definitely transcend market volatility, because this business is not about trading your portfolio, but it is about addressing the real financial need of the client across time.
Therefore, it is for a long-term proposition, anytime is a good time to come in,” Cruz said.