EastWest forms insurance firm
The Bangko Sentral ng Pilipinas approved the P500-million initial investment of EastWest Banking Corp. into an insurance company formed in partnership with Netherlands-based Ageas Insurance International N.V., a well-established global insurance firm.
“We shall inform the exchange as soon as we receive approval from the Securities and Exchange Commission and the Insurance Commission,” EastWest, the financial services subsidiary of the Filinvest Group of the Gotianun family, said in a disclosure to the stock exchange Wednesday.
EastWest signed a joint-venture agreement with Ageas in May this year to create a life insurance firm that will enable it to sell insurance products to customers.
The new firm will be named EastWest Ageas Life. The agreement and the name of the new company were subject to regulatory approvals.
Ageas Insurance International offers businesses and individuals life, non-life, healthcare and disability insurance products and mortgage and savings products.
The company was formerly known as Fortis Insurance International N.V. The company is currently based in Utrecht, The Netherlands, with operations in Luxembourg, France and the United Kingdom.
Through the partnership, EastWest will sell life insurance products through its various sales channels through an arms’ length 20-year distribution agreement with the new joint-venture company.
The bank said in a previous statement the joint venture company was projected to start commercial operations before the end of 2015.
Through the joint venture, EastWest aims to complete its line of product offerings to customers and take advantage of the developing life insurance market in the Philippines.
EastWest said teaming up with a well-established global insurance company like Ageas would enable it to provide world-class insurance products to its existing and future customers.
The initial paid-in capital of the EastWest Ageas Life will be P2 billion. The bank will hold 50 percent minus one share, while Ageas will hold 50 percent plus one share of the company.
EastWest also said through the new firm, it will not only be able to sell life insurance products but also increase its revenue base and expand its market share in the Philippines.
EastWest in the first half of 2015 posted a 4-percent decline in net income to P1.01 billion year-on-year on the back of lower trading gains and higher provisions for loan losses.
EastWest Bank reached a new milestone as total assets reached the P200-billion mark in the first half of the year. Total assets grew 31 percent to P204.9 billion from the P155.9 billion reported in the same period last year.
The growth in assets was propelled by the 23-percent expansion in loans to P131 billion. Deposits, meanwhile, increased 25 percent to P158.1 billion from P126.1 billion a year ago.