The Philippine arm of the Hong Kong-based FWD Group — the first foreign life insurer to enter the local market in 10 years — set foot in the country in April 2014 and launched its business operations in September with an initial investment of P1.3 billion in April.
FWD Life President and Chief Executive Officer Peter Karl Grimes said for the first half of the year, FWD Life made “under P1 billion” in total premium so far, the 14th largest in the local insurance industry.
“[We’re] beyond target for 2015. I expect that by the end of the year, we will be P2.5 billion,” Mr. Grimes told reporters in a media roundtable on Friday.
FWD Life is targeting to be among the top five of the country’s life insurers when its local operations reaches five years.
Data from the Insurance Commission (IC) showed that as of the first semester of 2015, the top five life insurance companies in the Philippines in terms of premium income were Sun Life of Canada (Philippines), Inc. (Sun Life) with total premiums of P16.313 billion; Philippine AXA Life Insurance Corp. with P11.884 billion (from P7.614 billion); BPI Philam Life Assurance Corp. with P11.452 billion (from P6.228 billion); Philippine American Life and General Insurance Co. with P10.542 billion (from P8.219 billion); and Pru Life Insurance Corp. of UK with P9.354 billion (from P6.969 billion).
The FWD Life official noted that bulk of the firm’s current sales comes from its existing exclusive bancassurance arrangement with Security Bank to sell FWD Life Insurance products in its branches.
Investment-linked products will also continue to drive sales this year, but moving forward, Mr. Grimes noted that the life insurer will focus on further pushing health and protection products.
“Majority of the business has come from bancassurance,” Mr. Grimes said. “Currently, market is still heavily biased on investment rather than health and protection and that’s something that we really feel strongly about… health and protection is something that people should take seriously.”
Bancassurance refers to the selling of insurance products within bank branches. Under Republic Act No. 10607 or the amended Insurance Code, banks are no longer required to have a 5% equity in insurance companies to enter into a bancassurance deal. Any bank can now get into the bancassurance business as long as it complies with the requirements set by the IC and the central bank.
FWD Life has some one hundred financial solutions consultants and over a thousand agents in force. It has at least 10,000 customers for its first year of operations.
Moving forward, the life insurer endeavors to grow rapidly and “expand more aggressively” next year.
“We have a very strong growth plan for next year. Lots of new products, expansion plans in the pipeline,” Mr. Grimes said.
Meanwhile, despite the expected entry of more foreign players into the local insurance industry, Mr. Grimes said there is room to grow the Philippine market, noting the very low insurance penetration in the country at 1.7%.
“I believe there will be more foreign entrants coming in but we continue to be extremely bullish on the Philippine macroeconomy and we don’t think the upcoming elections will derail growth … we see a continued rise in remittances and an even faster rise in BPOs (business process outsourcing) that will drive domestic economy,” he added.
The FWD brand is fairly new, unveiled just last August 2013 following the Pacific Century Group’s acquisition of ING Groep. N.V.’s Hong Kong, Macau and Thailand insurance businesses in February 2013. Swiss Re Group invested in FWD Group in December 2013 with a shareholding of 12.3%.
The FWD Group has over 300,000 customers in Hong Kong and Macau and over 400,000 customers in Thailand. It also has presence in Indonesia and is looking at tapping Vietnam by next year, Mr. Grimes said.
News Source: BUSINESS WORLD ONLINE