By TPT (The Philippine Star)
Updated March 01, 2011 12:00 AM Comments (0) View comments
MANILA, Philippines - The Manulife Financial Philippines is opening two new business sectors as part of its aggressive organic growth in the Philippine market.
First, it has launched its first micro-insurance operations areas in Mindanao.
Second, it launched a study on the feasibility of putting up its own asset management firm to manage mutual funds.
“We will create pilot areas in one or two provinces in Mindanao, to be spearheaded by the Philippine operations with the help of Manulife’s regional office,” David Wong, Manulife Financial senior vice president and regional executive for Malaysia, Philippines, Thailand and Vietnam, said.
Wong described the microinsurance market in the Philippines as “informal” as compared to other nations in the Asia Pacific region. But he said that the country was a leader when it comes to mandating microinsurance, under the so-called Regulatory Framework for Microfinance.
Leading the country’s microinsurance parade are the mutual benefit associations (MBAs), while the life and non-life insurance industry are still looking for the right formula.
MBA cater to the under-banked, un-banked and the lower segment of society.
“We would encourage a new and formal system of microinsurance, but we will pilot test these first,” Wong said, adding that each economy had its own peculiarities and culture.
However, the challenge for microinsurance is not so much the micro-products but the distribution and the collections of premiums processes. MBAs are by itself both the distributors and users of microinsurance.
Life and non-life insurance companies are tapping the banking sector to reach out to the microinsurance sector, since rural banks have already been catering to the microentrepreneurs.
Microfinance institutions (MFIs) as well as cooperatives and non-government organizations (NGOs), all cater to the same market for microinsurance.
In fact, the Bangko Sentral ng Pilipinas (BSP) has already allowed thrift and rural banks to help market microinsurance.
Meanwhile, Wong also admitted that they have formed a review team looking up the feasibility of putting up an asset management firm. Asset management companies put up mutual funds for the retail investors as well as investments of the insurer.
The leading asset management firms with huge mutual funds are lead by life insurers.
The Bank of the Philippine Islands (BPI) and the defunct Ayala Life Assurance Co. manages the ALFM mutual funds. Sun Life Financial has an asset management subsidiary called Sun Life Asset Management Co. (SLAMC).
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