Multinational insurer Pru Life UK has asked policymakers to lift the 5-percent equity rule and relax other requirements on bancassurance to make insurance products more accessible to the public.
Antonio Manuel De Rosas, president and chief executive officer of Pru Life’s office in the Philippines, said the removal of the equity requirement and a less stringent bancassurance requirements would allow more banks and insurance firms to engage in bancassurance, promoting healthier competition that should benefit the public.
Bancassurance is the sale of insurance products through bank branches.
Under existing rules implemented by the Bangko Sentral ng Pilipinas, a universal bank intending to enter into bancassurance should first infuse at least 5-percent equity in the concerned insurance firm. Also, a universal bank is limited to selling insurance products of only one company.
The problem with these requirements, De Rosas said, was the limited number of universal banks in the country, which did not match the number of players in the insurance industry.
“It will benefit both banks and insurance firms if engaging in bancassurance will be easier,” De Rosas told the Inquirer in an interview.
Pru Life UK has been in constant search for a bank that it can enter a bancassurance deal with. De Rosas, however, said it had yet to find a bank partner. He said that most universal banks in the country already had bancassurance partners, while others were discouraged by the need to infuse a 5-percent equity in insurance firms.
“We have talked to some banks but have not come close to having a deal,” he said.
Banks with existing bancassurance arrangements are Metrobank (with AXA), Bank of the Philippine Islands (Philam Life) and Banco de Oro (Generali Pilipinas).
Given the difficulty in finding a bancassurance partner, De Rosas said, Pru Life UK would focus on expanding its network of sales agents to widen its reach in the country.
He said the insurer intends to continue hiring more agents to increase the current number of about 3,000. Last year, it hired about a thousand more agents, De Rosas said.
De Rosas said there was still much room for growth in the insurance market in the Philippines. Insurance penetration remains low in the country although incomes have been rising, he added.