8990 president JJ Atencio and Sun Life Philippines Riza Mantaring sign cooperation deal
Leading insurer Sun Life of Canada (Philippines) Inc. has forged an alliance with mass housing developer 8990 Holdings Inc. to roll out a nationwide financial literacy program envisioned to evolve into a platform to cross-distribute each other’s products.
For Sun Life, this is part of an array of initiatives mapped out to achieve an ambitious goal to scale up its base of insurance and mutual fund clients to five million by 2020 from 1.5 million (of which 70,000 are mutual fund account holders under mutual fund arm Sun Life Asset Management Co. Inc.) at present.
The five-year growth plan “Rise PH,” which seeks to champion financial inclusion in the Philippines, was unveiled by Sun Life Wednesday, during which the partnership with 8990 Holdings was also sealed.
While the goal to hit a 5-million client base—similar in size to those of big banks in the country—seemed ambitious, Sun Life Philippines president Riza Mantaring said it was best to set the targets high. “At Sun Life, we always dare to dream big—more so if the stakes are high. This is the country’s future we’re talking about.”
Operating in a market where insurance penetration is very low at 1.7 percent of gross domestic product, Mantaring said Sun Life, already being the market leader in this country, was now aspiring to “rise from success to significance.” Across the region, she said the penetration ratio was easily double the level in the country.
To support its goal, Mantaring said Sun Life would also have to double its network of agents of 8,000 at present. The group is also hoping to increase its nationwide footprint from 46 branches in 90 locations.
The cooperation agreement with 8990 Holdings on financial literacy is a collaboration to create appropriate educational tools, formats and templates as well as products and services that will address the financial, housing and insurance needs of ordinary working middle and lower-middle income classes.
The partnership is seen to result in the development of new products for the broader market, Mantaring said.
For his part, 8990 Holdings president Januario Jesus Atencio said during the joint press conference with Sun Life: “It starts with education but doesn’t necessarily end there. It’s a continuing exploration on how we can, for example, use insurance products to actually strengthen the motivation of buyers to continue paying monthly amortization.”
Based on loan default statistics, Atencio said it’s interesting to note that higher income segments tended to have higher default propensity. “So it is not so much on affordability. It is information; it is the willingness to continue paying amid all the distractions that will impact on disposable income. So i think what 8990 is saying together with Sun Life is we could teach the middle class and lower middle class Filipinos to invest and buy the right things, then at the end of the rainbow, you can see more prosperous individuals, more prosperous families.”
Building on 8990 Holding and Sun Life’s sharing of knowledge and conduct of financial literacy programs, Atencio said the relationship would eventually deepen into “cross product distribution.”
Since 2010, 8990 Holdings has been requiring its buyers to undergo a four-hour weekday financial literacy seminary as a pre-requisite to sales reservation. “We’ve seen how our collection efforts for the past five years stabilise at 90 percent performing accounts ratio when we are able to modify our buyer’s behaviour and attitude, and create new habits that insure regular monthly amortisation payments. This major innovation makes us the only developer in the Philippines today that does financial literacy seminars to the point that we are willing to forgo the sale if the buyer refuses to attend.”
Meanwhile, Sun Life has mapped out other initiatives to boost financial literacy. It has declared the month of June as “Financial Independence Month,” during which it has launched “Money for Life,” a comprehensive, customizable financial planning program for every stage in a person’s life.
To help inspire the public to create their own “money for life” plan with a financial advisor, Sun Life created a 360-degree visual reality video that transports the user to different scenarios based on their chosen life stake. The video can be experienced in a customized bus called “Bus to the Future” which will be deployed to different shopping malls and campuses nationwide.Doris Dumlao-Abadilla