Belgium’s largest insurers recently concluded a deal that would allow them to establish a beachhead in the Philippine market, which among Southeast Asian nations remains largely underserved.
East West Bank, the Gotianun family’s financing arm, this week announced plans to create a joint venture with the Ageas group, for their foray in the local insurance industry.
For Eastwest, the deal will enable the bank to complete its menu of services to help it serve the middle and retail banking segments. Ageas, meanwhile, may benefit from its partner’s extensive reach in the country’s urban centers.
“We have always viewed bancassurance as an integral part of our business model,” Eastwest president and CEO Tony Moncupa Jr. said, explaining that the deal would complete its product offerings.
Under the deal, the partners will each own 50 percent of the company, with Ageas having a slight edge of a few shares. Eastwest will be the exclusive distributor of Ageas’ insurance products for 20 years. The new firm will be named EastWest Ageas Life, and will have P2.9 billion in capital.
“We have made no secret that we wish to enter the Philippines,” Ageas Asia CEO Gary Crist said in a statement. “The potential is huge given that the current life insurance penetration rate of around 1.5 percent is one of the lowest in Asia.”
With more than 400 branches, Eastwest has the seventh largest distribution network in the Philippines.
Ageas is one of Europe’s top 20 insurance companies. It operates successful partnerships in Belgium, the United Kingdom, Italy, Turkey, China, Malaysia, India and Thailand.