Manufacturers Life Insurance (Manulife), the local arm of the Canada-based Manulife Financial Corp (MFC), said on Tuesday it will capitalize on the fast-growing economy and tap into the middle-income market to double its growth in the life insurance business this year.
“Manulife is going to double the investment we make in our business in 2015 to make ourselves more accessible to customers all over the country… through increased spending in marketing and branding,” said Manulife President and Chief Executive Officer Ryan Charland.
He said the company was “very bullish” on the country’s life insurance industry, citing the 6 to 8 percent gross domestic product growth in the last two years, the young and skilled labor force, the growing middle class and the Philippines becoming “a trillion dollar” economy in the next 10 years and one of the top 20 economies by 2050.
“We view the Philippines as a critically important market,” Charland told reporters. “There are so many potential customers in the Philippines, and we think it’s an incredible opportunity for us.”
Charland said the firm will open 18 branches towards the end-2016—10 branches this this year and 8 more in 2016—to service more markets nationwide mainly in Mindanao, then Visayas and Luzon.
This will raise Manulife Philippines’ network to 50 branches by the end next year from the existing 38 branches.
In terms of market share, the company has cornered 8 to 8.5 percent of the Philippine market, but it is targeting to reach “double digits” of at least 10 percent share of the market after the expansion plan next year.
Charland said the company has been engaged more in the upper class market, but aggressive growth this year will extend to the middle market, which make up majority of the working class in the Philippines.
He said the firm is “on track” to attain its targets by the year-end based on its “very strong growth so far in the first quarter” of 2015.
“So far this year, we are in the realm of achieving our targets. In the first quarter, we grew our total sales by 40 percent. So we’re in the ballpark of what we need to achieve our sales growth,” Charland said.
Last year, its financial adviser insurance sales force grew by 38 percent, while insurance sales grew by 44 percent. As of end-April, Manulife’s financial advisers reached 6,700 from the 6,000 last year.
Its business comprises two-thirds traditional savings plan and one-third single-type mutual funds. At least two thirds of its sales come from life insurance business, and one third from its bancassurance venture with China Banking Corp.
China Bank owns 40 percent stake in its bancassurance joint venture with Manulife Philippines called Manulife China Bank Life Assurance Corp. The bancassurance venture began in 2007; China Bank hiked its interest in the joint venture firm to 40 percent from 5 percent in October last year.
To date, Manulife Philippines’ assets under management amounts to about P90 billion.
Established in the Philippines 108 years ago, Manulife is involved in life insurance, pension and education businesses.
Aside from the Philippines and Canada, MFC has presence in the United States, Singapore, Indonesia, Vietnam, Hong Kong and China.