Robinsons Bank and Pru Life officials led by Robinsons Bank president Elfren Antonio Sarte, Robinsons Bank chair Lance Gokongwei, Pru Life UK president Antonio de Rosas (3rd, 4th and 5th from left) at bancassurance partnership signing on January 9, 2018
Gokongwei-led Robinsons Bank has teamed up with insurer Pru Life UK to sell basic protection products in its branches as part of its bid to be a more significant player in the highly-fragmented banking sector and debut into the underpenetrated local insurance space.
For Pru Life UK, a unit of London-based global insurer Prudential plc, the bancassurance partnership with Robinsons Bank will diversify its distribution channel after relying mostly on its organic agency force for many years. The partnership is initially sealed for a three-year-period.
Mid-sized Robinsons Bank has bigger growth aspirations and is part of a major Philippine business house with a vast footprint in retailing and other consumer-focused businesses, where synergies are seen to be unlocked to benefit the bancassurance tie-up.
Robinsons Bank chair Lance Gokongwei, who also chairs the bank’s parent conglomerate JG Summit Holdings, said in an interview during the launch of the bancassurance partnership on Tuesday that just by growing organically, the goal would be for Robinsons Bank to break into the roster of the country’s 15 largest commercial banks by 2020.
As of end-September last year, Robinsons Bank ranked 19th among the country’s 43 commercial banks based on total resources, which amounted to P94.4 billion. Total stockholders’ equity stood at P12.4 billion.
“By 2020, we’ll be P200 billion in assets, with capital of P15 billion,” Gokongwei said, adding that the JG Summit group would support whatever would be required for the bank to grow.
Pru Life UK president Antonio de Rosas said all of Robinsons Bank’s 134 branches were expected to participate in selling insurance products. The partnership will initially focus on traditional or basic products for now but the terms of the three-year partnership could be reviewed.
On its own, Pure Life is a major provider of variable unit-linked (VUL) insurance products. A hybrid between a mutual fund and life insurance, a VUL product becomes variable as investment returns depend on the market performance of the fund where the premium is invested.
“We are very pleased to kick off 2018 by having Robinsons Bank as our new partner. By combining our quality product offering with Robinsons Bank’s strong distribution platform, we are confident that this alliance will benefit Robinsons Bank’s customers by providing them with easy access to Pru Life UK’s solutions that suit their growing protection needs,” De Rosas said.
Robinsons Bank president Elfren Antonio Sarte said more insurance distribution opportunities could be explored beyond the bank’s branch network – which was expected to end this year at 153.
“We will also partner with our retail affiliates, hopefully to also use the JG eco-system to sell insurance products through its customer base. So it’s not limited to our branch network. We can open up many other channels and that’s one of the advantage that Pru Life sees with the bank,” Sarte said.
Sarte said it had taken a while for Robinsons Bank to venture into bancassurance because it had to choose the “right” partner. Nonetheless, he said bancassurance was among the fee-based businesses that constituted the bank’s growth roadmap to 2020.
During the first year of this partnership, the bank expects to generate P40-P50 million in premium revenues.
Demand for life insurance products has been rising in the Philippines, buoyed by continued economic growth, consumer affluence and a very low insurance penetration rate.
The so-called protection gap – or the difference in the amount of money available to make sure that people can maintain their current level of lifestyle if the breadwinner passes away – is estimated at P1.2 million per household in the Philippines.