I SALUTE Renato A. Vergel De Dios, President and CEO of BDO Life. He makes a strong case for life insurance.
Apparently, amongst adult Filipinos, the total life insurance penetration is only 9 percent. Common reasons why, it is said, people don’t buy life insurance are:
(a) they can’t afford it
(b) they don’t see the need
(c) they get nothing from it
(d) they don’t trust insurance companies
Of the foregoing, I believe that the most important is that many people don’t trust insurance companies. My direct experience is that many people don’t trust insurance companies is that, far too often, insurance companies are not trustworthy.
BDO knows about the untrustworthiness of the insurance sector.
In 2007, BDO completed a hostile takeover of Equitable/PCI Bank. Equitable/PCI had a BankAssurance relationship with PhilamLife which BDO inherited. In late August 2008, BDO marketed a PhilamLife insurance product. A family member paid for the product because (a) he could afford it, (b) he saw the need to be adequately insured, (c) he saw adequate benefits, and (d) he trusted BDO, our bank at the time, which was marketing the product.
Consequently, he invested $10,000 in the product which was purchased through BDO.
And then…wala.
No acknowledgement from PhilamLife and no issuance of the policy which was stated to be received by us in 12 days time.
After three weeks, we met BDO and PhilamLife. The meeting was not cordial. We received insolent backchat from PhilamLife which claimed that it was “very busy”. Our concerns were compounded by what was happening to PhilamLife’s parent company in the US, AIG. Through spectacular financial illiteracy on the part of AIG, it turned out that it was unable to meet its obligations and soon had to be bailed out by the US Government to the tune of $182.3 billion (greater than the Philippine National Debt at the time).
Further representations by ourselves, and allegedly by BDO, to PhilamLife were fobbed off. Eventually, we received a partial refund (we lost $1,000) from PhilamLife.
We never ever saw the policy that we paid for in full.
Of course we don’t trust insurance companies.
PhilamLife has now changed its name to AIA Philippines.
For several years PhilamLife maintained an inappropriately adversarial stance with regard to our representations over our failed transaction.
Naturally, we closed our account with BDO.
In turn, the BancAssurance relationship between BDO and PhilamLife did not last beyond 2009. BDO then formed a BancAssurance relationship with Generali which also did not last very long.
Now, BDO has bought the life insurance relationship in house.
We wish BDO every success.
We also wish every success to reputable insurance salesmen who try hard to sell their product in a difficult market – thanks to their disreputable colleagues who are underpinned by inadequate management./PN
