BANCASSURANCE is the concept of selling life insurance products through the connections that insurance companies have with banks and therefore the banks’ customers. For example, in 2014, the Hong Kong based insurance company FWD joined forces with Security Bank to sell its insurance products to Security Bank’s customers. The advantage for FWD is that Security Bank’s customers’ contact details are made available to FWD who can then market its products.
Another bank which has a bancassurance connection is BDO Unibank. In this case, BDO has its Bancassurance activity in-house through BDO Life Assurance Company (BDO Life). This means that BDO Life can obtain knowledge of BDO’s customers when selling life insurance. This has the advantage that those selling life insurance products are better positioned to market insurance products that are compatible with the customers’ needs.
In contrast, an insurance salesman without knowledge of the prospect’s financial position has to ask snoopy questions before he can make realistic recommendations.
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BDO took over Equitable-PCI Bank in 2007. At the time, Equitable had a Bancassurance relationship with Philam Life which BDO inherited. 2008 was not a good year for the financial sector. Philam Life’s parent company in the United States, AIG incurred huge losses. The doubtful concept ‘too big to fail’ was invoked which meant that AIG had to bailed out by the US Government to the tune of US$182.3 billion (approximately P10 trillion)!
Fortunately, the Philippines was relatively untroubled by the AIG debacle. Nevertheless, BDO did incur difficulties in its relationship with Philam Life and disengaged from its Bancassurance partnership at the end of 2009.
BDO then formed another Bancassurance relationship with Generali in 2010. This, too, did not last very long and eventually BDO formed BDO Life Assurance Company (BDO Life) which exists to-day.
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The Life Insurance sector in the Philippines, by international comparisons, is small and comprises less than two percent of the Nation’s Gross Domestic Product.
Previous Insurance Commissioners have glibly, and I believe erroneously, asserted that the limited life insurance market is because ‘Filipinos are financially illiterate.’ It would be more accurate to suggest that not all insurance salesmen operate with the necessary degree of probity to engender a buoyant market.
A long time ago, I suffered from malpractice from a falsified quit claim form.
It is not too late for the errant insurance company to withdraw its inappropriately adversarial relationship with me.
It might even regain lost market share!/PN
