BDO Philippine Split From Generali

BDO Unibank Inc (Philippines) has taken full control of its life insurance entity from its joint venture partner Generali Group. BDO terminated the joint venture vehicle Generali Pilipinas Holdings Co. Inc. (GPHC), the parent firm of life insurer Generali Pilipinas Life Assurance Co. (GPLAC) and non-life insurer Generali Pilipinas Insurance Co. (GPIC).

GPHC was created out of the insurance partnership forged between BDO and Generali in March 1999. 

BDO, the country’s largest bank, will take full control of GPHC and GPLAC, which will be renamed BDO Assurance Holdings Corp. and BDO Life Assurance Co. Inc. respectively.Meanwhile, Generali will take full control of GPIC and continue to operate in the Philippines, which is part of its Asia-wide operations.

By assuming full control of the GPHC and GPLAC insurance operations, BDO said it would be able to adapt more readily to the demands of its target markets. BDO president and chief executive officer Nestor V. Tan noted that while the partnership with Generali has been integral to the success of the companies, “BDO intends to embark on a new journey of diversifying into the life insurance sector via this new wholly-owned unit to maximize cross selling of products to its extensive retail customer base.”

BDO is re-focusing its insurance strategy to align with its thrust to solidify its presence in the broad-based middle income market. Life insurance policies are sold through BDO’s 880 branches nationwide  and is a contributor to the bank’s fee-based earnings.

China Banking Corp., another bank affiliate of the SM Group, likewise operates a bancassurance  joint venture company known as Manulife  Chinabank Life Assurance Corp. with Manulife Financial, one of the world’s largest insurers.

Generali Pilipinas Life reported total premium income last year of nearly P5 billion, placing it ninth overall, followed by Manulife Chinabank Life Assurance Corp.

ANZ U-turn On Asia

Expansion across Asia was at one time the key to ANZ’s future. And why not, growing into the wealthiest region in the world made fiscal sense. Times change however and a current internal review looks likely to see an end to all that, and more.

In 2009 Australia and New Zealand Banking Group acquired the Royal Bank of Scotland’s retail, wealth and commercial businesses in Taiwan, Singapore, Indonesia and Hong Kong, as well as the institutional businesses in Taiwan, the Philippines and Vietnam.

It was a portfolio of businesses that the then troubled RBS had itself only just purchased from ABN AMRO.

Asian Strategy

The deal gave ANZ ready made access to 54 branches, $3.2 billion in loans and $7.1 billion in deposits serving about two million clients. It was part of former CEO Mike Smith’s Asian growth strategy.

Now in 2016 times have changed and so have ANZ CEO’s. Current Chief Executive Shayne Nelson has made no secret that he is keen on simplifying the bank offering into what many interpret as becoming an onshore vanilla Australian bank. 

Back to Basics

Australian publication AFR (paywall) reports that news filtering out of the internal revue on ANZ's wealth segment is that the preferred option for the Melbourne based bank is for the complete sell off of its wealth and life insurance operations.

That option however with slower economic growth in Australia and in key Asian markets might not appeal to many buyers who would need to shell out an estimated $5 to $6 billion. 

Asian Wealth Units

Should they be «hived off» the ANZ private wealth units in Asia would certainly attract a lot of interest.

No doubt the usual names will be floated as potential buyers, OCBC's Bank of Singapore, DBS, perhaps also don't count out the ambitions of Joachim H. Straehle, CEO of EFG International. Although with the integration of BSI they might be too busy. And don't discount Julius Baer and Credit Suisse who are both increasingly relying on Asian business growth to support their business. 

Or would they?

The wealth business ANZ acquired in the 2009 deal was the old ABN AMRO Van Gogh Preferred, a banking service for the mass affluent, not a private banking business. A lot of due diligence and tyre kicking might mean no deal or a tough negotiation on price in this buyers market.

ANZ will report in August the findings of their wealth division revue.

Malaysian Loves Uber

The latest study by the Land Public Transport Commission (SPAD) has found that 75% of Malaysian users choose Uber over taxis. The online study involved 45,000 users.

Previous reports had stated that Uber users preferred the service as the vehicles used were better and the service was cheaper. They were also fed up of taxi drivers who refused to take them to their destinations, failed to use their meters and overcharged them.

Fairfax Buy PT Asuransi Multi Artha Guna

Canada’s Fairfax Financial Holdings Ltd has agreed to buy 80 per cent of PT Asuransi Multi Artha Guna Tbk (AMAG) for about $165-million, sending shares of the Indonesian insurer to a record high. Fairfax, in a statement late on Monday, said it would buy the stake from PT Paninvest Tbk and affiliates in a deal likely to close by year-end.

On Tuesday, AMAG shares rose as much as 15.5 per cent to 462 rupiah ($0.035), compared with just 0.7 per cent in the broader market.Fairfax’s deal with the Panin Group, controlled by Indonesia’s Gunawan family, highlights foreign interest in the Southeast Asian country’s general insurance market after a number of deals in recent years in the life insurance segment.

Japan’s Sumitomo Life Insurance Co bought 40 per cent of the life insurance arm of PT Bank Negara Indonesia Tbk, while compatriot Dai-ichi Life Insurance Co Ltd acquired 40 per cent of Panin Life.

Fairfax said it would integrate AMAG with its Indonesian subsidiary, and that AMAG would enter a long-term general insurance partnership with PT Bank Pan Indonesia Tbk.

Hong Leong Assurance Up For Sale

Hong Leong Financial Group’s (HLFG) potential sale of its 70% stake in Hong Leong Assurance (HLA) and 65% stake in Hong Leong MSIG Takaful (HLMT) is expected to unlock its valuation.

The potential sale of HLA and HLMT is a positive in that it would unlock the valuations of Malaysia’s fourth largest life insurer. The disposals could raise about RM3.2bil, which translates to RM2.79 per share, which we think could potentially be distributed back to shareholders. 

HLFG announces that it will commence negotiations for the possible sale of its stakes in HLA and HLMT. The buyers are not specified. HLA, which is the fourth largest life insurer in Malaysia after AIA, Great Eastern and Prudential, in terms of annualised new business premiums.

The research house said the insurance division currently contributes less than 10% of group earnings so there would not be a significant impact to earnings post disposal. 

What HLFG would have left in its stable would be a 64.4% stake in HL Bank, 30% stake in MSIG Insurance, an 81.3% stake in HL Capital and a 100% stake in HL Insurance  (Asia).

Zurich Bought MAA Takaful

Zurich Insurance Co Ltd has bought MAA Takaful Berhad (MAAT) from MAA Group Berhad and Solidarity Group Holding BSC for RM525 million. A statement issued by Zurich Insurance Co said about RM400 million was paid at the closing of the transaction and that the balance would be paid on the third anniversary after the closing.

This, it said, was in accordance with the terms and conditions of the share purchase agreement and subject to certain adjustments.

Insurance Journal reported that the combination of MAAT’s range of products and Zurich’s existing insurance solutions would enable it to provide customers in Malaysia a full suite of insurance products and solutions spanning life insurance, general insurance, family takaful and general takaful.

Who Is Bilqis Hijjas

Dancer and performer Bilqis Hijjas, an activist, was freed from a charge of dropping balloons at a shopping mall last year. Magistrate Mohd Faizal Ismail ruled that the prosecution had failed to prove the charge against Bilqis, the daughter of prominent architect Hijjas Kasturi, under Section 14 of the Minor Offences Act.

“The complainant’s evidence was not credible when she claimed that she was insulted,” said the magistrate. “She was only doing her job as an auxiliary policewoman to maintain peace at the mall.”
He added the witness from the organiser for the art event did not realise about the balloon incident until she was told. Unless she realised it in the first place and reported to the authority, then the court can say the accused’s behaviour was insulting because it was targeting her.”

Magistrate Faizal also found the investigating officer, who told the court that Bilqis was “rude”, was merely giving his own opinion. He also went through the Hansard and found that when the Minor Offences Bill was debated, it did not specify what was the intention of enacting Section 14. “There is no case law that can be referred to. In facing a charge under minor offences, the accused would normally plead guilty.”

Magistrate Faizal then acquitted and discharged Bilqis from the charge. She claimed trial for allegedly insulting behaviour by dropping balloons at a shopping mall. If found guilty, the maximum fine is RM100. The yellow balloons had the words “justice” and “democracy”.


Speaking to reporters, Bilqis said she was grateful for the decision. “It was just very minor. If this is considered a crime, it will set a dangerous precedent,” she said.