Cut in banks’ reserve requirement ratio (RRR) is seen to help boost Allianz PNB Life Insurance, Inc. premiums by more than 10% this year.
In a briefing, Allianz PNB Life Insurance president and chief executive officer Alexander Grenz said the company has “a strong share of bancassurance where we see a bit of a slowdown because of the first half of the year.”
“This is expected to recover in the second half of the year with the release of the RR of the central bank. We will see more activity in the bancassurance side in the second half and I hope so that we do too,” Grenz said.
He was referring to the cut in banks’ RRR, which the Bangko Sentral ng Pilipinas (BSP) slashed by 200 basis points for universal and commercial banks (U/KBs), among others, on a staggered basis from May to July this year.
He explained that bancassurance, which is a joint venture business of a bank and an insurance company, has been affected by a liquidity issue in the economy in the first half of the year, which is seen to affect its full-year growth.
Aside from the expected lift from the RRR cut, Grenz said they are also looking at other strategies, such as strengthening their agents, not only by increasing their numbers but also by improving their skills.
He explained that “diversified distribution strategy built on various pillars,” which the agency started last year, will allow them to post stronger growth in the coming years.
For this year, Grenz said they are considering an annual expansion of “slightly above 10 percent.”
He said this growth is lower than in the past year but pointed out that the big jump was because they have a low base, given that the company is relatively new.
Allianz PNB, a collaboration of the Tan-led Philippine National Bank (PNB) and Germany-headquartered Allianz SE, started operations in 2001.
Grenz said growing from small scale, they have to have realistic targets “to grow healthy.”
“We don’t want to grow too fast because the quality will lag. So at the end of the day, we need to make sure that we focus internally, on getting our business model right because we need to have a scalable business model, in order to grow fast,” he added. (PNA)