Union Bank launches new bancassurance platform

Aboitiz-led Union Bank of the Philippines is set to roll out a new bancassurance platform this month in partnership with homegrown insurer Insular Life Assurance Co. Ltd.

Union Bank has obtained the Bangko Sentral ng Pilipinas’ approval for its plan to engage in cross-selling activities with Insular Life. Its thrift bank arm City Savings Bank likewise obtained a similar cross-selling authority, based on a disclosure to the Philippine Stock Exchange.

The two financial institutions will not create a new legal vehicle or joint venture for the bancassurance business, aiming to put in place the most efficient and competitive structure. As Insular Life is already part owner of Union Bank with a 16.2-percent interest, this solves the cross-ownership requirement for the cross-selling of insurance products using the Union Bank branch network.

“The financial advisors are hired into Union Bank and there is no separate joint venture company,” Union Bank senior executive vice president for retail banking and corporate banking Eugene Acevedo said, when asked about the structure of the new business.

Union Bank and Insular Life will put in place a bancassurance governing board chaired by Union Bank president Edwin Bautista and co-chaired by Nina Aguas, the chief executive officer of Insular Life. They will also create a joint bancassurance working committee chaired by former National Treasurer Omar Cruz, now Insular Life’s chief bancassurance officer.

“We can start in April because we have both Insurance Commission and BSP approvals,” Acevedo said.

“We have been laying the groundwork for months now. We have close to 200 relationship managers (RMs) who have passed the Insurance Commission exams. These RMs are existing Union Bank employees,” he added. —DORIS DUMLAO-ABADILLA