MANILA – Allianz-PNB Insurance Inc., a tie-up between Lucio Tan-led Philippine National Bank and German insurer Allianz SE, expects a modest growth in premium income this year on the back of the challenges brought by tight liquidity in the market experienced during the first six months of the year.
“We see challenges in the market, we have a strong bancassurance dominated business model. Bancassurance is suffering because of the [tight] liquidity in the first half of the year,” Allianz PNB president and CEO Alexander Grenz said in a media roundtable in Makati City on Friday.
“Therefore, more conservative, we will probably see 10 percent to 11 percent [growth] for this year,” Grenz said.
The low double-digit growth expectation for 2019 is slower that the 69 percent growth in premium income recorded in 2018.
Bancassurance is an arrangement between a bank and an insurance company allowing the insurance company to sell its products to the bank’s client base, according to the Investopedia.
Grenz said the company is expected to recover in the second half of the year as the cut in reserve requirement ratio (RRR) of banks’ start to take effect as this in turn will add more liquidity in the financial system.
The Bangko Sentral ng Pilipinas’s Monetary Board decided to cut the RRR by 200 basis points to 16 percent in three stages— by 100 basis points (bps) effective May 31; 50 bps effective June 28; and another 50 bps effect July 26.
In 2016, Allianz SE completed a 51 percent acquisition of PNB Life Insurance Inc., which created the joint venture Allianz-PNB Life Insurance. (GMA News)