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FWD PH to remove ‘fine print exclusions’ on insurance policies

Age, illnesses/sicknesses, occupation and risky endeavors are normally excluded from insurance policy coverage for the longest time, oftentimes causing many Filipinos to extricate themselves from existing plans or hesitate into getting insurance for themselves.

But HongKong-based FWD Insurance, which set up shop in the Philippines in 2014 and has been operating actively its life insurance business for the past six months, vowed to remove these “exclusions in the fine prints” of policies to ensure that coverage can be expanded in the coming years.

This thrust was bared by FWD Philippines president/CEO Peter Grimes to the Manila Bulletin as he spoke of other innovations that the company would aggressively embark to get an increasing share of the local life insurance market.

FWD is essentially born in HongKong owned by Richard Li Tzar Kai of HongKong (the youngest son of businessman Li Ka-Shing and brother of Victor Li, the 26th in the Forbes List of HongKong’s 40 richest people in 2010). He owns his own conglomerate under the Pacific Century Group (with three legs: property; telecoms, technology and media; and financial services.

Li acquired the asset management company of AIG in America (headquartered in New York) and three years ago, he acquired in February 2013 the ING Life’s business in HK, Macaw and Thailand for $2.2 billion and re-branded in HK in August 2013, Thailand a couple of months later and then Indonesia and Philippines. That was the beginning of FWD, which at the time of acquisition the brand was not in existence. The FWD brand was a product of creative agencies in New York, Hongkong, London and Asia.

“We have the first product, the cancer product- cancer being a very big problem in the Philippines (with one in eight Filipinos suffering from cancer and 75 percent getting cancer before the age of 50) and cancer is now a leading cause of mortality. The cancer product of FWD is very simple and without exclusions,” Grimes said.

With the low insurance penetration in the Philippines, Grimes said his company is growing the local market, which is at 1.3 percent penetration versus the ASEAN average of 3 percent. But this means, there are lots of growth opportunities, Grimes added.

Definitely, he said, next year we would be working on what we call Project Exclusion where we would be retaining only those exclusions mandated by the Insurance Commission such as injuries or death due to a criminal activity, drug addiction or illegal substance usage and suicide.

But extreme sports or those involving one’s passion, including jobs like commercial flight crew, would no longer be excluded from insurance coverage, as has been practiced in the past.

FWD Philippines was awarded a license in April, 2014. Within six months of 2015 it managed to build the business and in October, 2914, it was soft launched in the country. Active operations began in January. “Our first year has been very solid. The company met its plan in 2015 in fact the Insurance Commission in its mid-year report noted that of the 34 operating licensed life insurance companies (it being the newest and smallest entrant). FWD was able to move to the 14th place with insurance premium incomes of P980 million as of June 30.

“I think we are going to end the year with first insurance premium (with no renewals yet) at close to P2.5 billion,” Grimes said.

This was made possible by hiring good agents (with over 1,000 in the force) and forging exclusive distribution partnership with Security Bank, Grimes said.

The market has been spread equally across the country and across demographic sectors, but what came out to be a particularly strong market was the millenials (or those born in the internet age), although Grimes said FWD wants to provide financial solutions to a broader sector or for everybody. The current industry thrust of pushing for investment and wealth creation is important but our focus is more on protection because with just one negative episode in your health, this can all be wiped out without the protection.  Grimes said FWD is more focused on providing protection with a balance of investment and wealth creation.

“We are an Asian focused, Asian managed and Asian regulated business that believes in simplicity, affordability and products that are relevant to the market. The growth agent for insurance and many other areas is in Asia because it is the most dynamic set of economies in the world and it has a significant chunk of the population and the Philippines has a very young, mobile and increasingly affluent, rising middle class and those are the markets where we are really excited about,” Grimes said.

The Philippines, he added, is the most exciting market in Asia now where there is great opportunity to grow the business exponentially.

Next year, he said, we hope to land in the top 10 insurance company in the Philippines in terms of premiums. By the end of 2019, we want to be fifth top insurance company in the Philippines, he stressed.