MANILA, Philippines – Global insurance giant AXA is expanding its health product lines as well as its digital and IT presence in the country ahead of what it sees as great time for a rapidly changing local insurance environment.
"We are focused on Asia, and the Philippines is a particularly interesting market for us. The average age of the population is 23 years old, something we dream of in Europe," said AXA Group Global CEO Thomas Buberl at a briefing in Makati City on Wednesday, July 5.
"The population is coming into the working age, offering huge potential, and there's a huge infrastructure for health [insurance] that still needs to be built. We can import a lot of knowledge from elsewhere to really bring into the Philippines and go beyond insurance," he added.
AXA is also set to move its regional IT shared services center to the Philippines, with the facility expected to open in the 2nd half of 2017.
"We chose Manila due to its well-established IT talent pool and similar time zone to AXA Asia and regional countries and customers. The center will focus on both digital and core IT technologies and it is planned that the new center will grow to a few hundred AXA IT employees by 2020," Buberl said.
He also noted that the Philippine market continues to show promise, growing overall by 25.77% in the 1st quarter of 2017.
Expanding insurance offerings
AXA Philippines, a joint venture between AXA Global and GT Capital-led Metrobank, booked P21.6 billion in total premium income last year, making it the 2nd largest life insurance firm in the country behind Sun Life, according to the Insurance Commission.
In the 1st quarter of 2017, AXA Philippines' total premium income grew at 30%. AXA Philippines chief executive officer Rahul Hora expects that 30% growth to be sustained this year, especially as the firm is in the midst of expanding its product portfolio after having acquired general insurance firm Charter Ping An last year.
The acquisition allows AXA Philippines to diversify into all types of insurance. In particular, it is aggressively pushing its health insurance.
"In the local industry, the participation of the private sector in health is only at 5% so there is such a big drive on the health side to give customers what they need," Hora explained.
"Out-of-pocket expenses that customers pay [for medical care] is one of the largest in Asia. A full 54% of the health expenditures in the country is being paid by individuals, so it shows how little the contribution of insurance companies is here. That is what drove us to launch new health products and that is our focus," he added.
The country's young demographics also gives the firm an opportunity to use digital services to reach new customers. Hora noted that 15% of AXA Philippines' customers are using their app.
A lot of the firm's growth also comes due to its partnership with Metrobank.
"Our partnership with Metrobank, which we are extending to PSBank, allows us to position ourselves as a one-stop shop for customers. [A customer] can walk in and get the full suite of financial products," Hora explained, adding that about 60% of the AXA business comes from Metrobank.
Looking out for opportunities
The planned expansion comes at a time of consolidation for the local industry as new regulations will require insurance companies to have a capitalization of at least P1.3 billion by 2020.
At least 5 non-life insurance firms have already said they may close down, which could provide acquisition opportunities for bigger firms like AXA Philippines.
"We are always on the lookout [for acquisitions] because of the growth objectives that we have for the market. Whenever we feel that there is an opportunity that makes economic sense for the shareholders to buy, we definitely will be looking at those options," Hora said.
He added that "nothing is shortlisted or close to a deal as of now but we are always on the lookout because our focus here is going to be in general insurance and in health insurance so any opportunities ... will always be looked at by AXA." – Rappler.com