The European financial services group has entered a joint venture in the Philippines to exploit growth in the life insurance market.

German financial services group Allianz and Philippine National Bank have agreed to enter a 15-year exclusive distribution partnership and for Allianz to acquire 51 per cent of PNB Life Insurance, the life insurance subsidiary of PNB. The deal creates a joint venture company operating under the name Allianz PNB Life Insurance.

PNB is the fourth largest private commercial lender in the Philippines; the bank’s life insurance arm is the 10th largest such business in the Asian country, a statement said yesterday.

Part of the JV is a 15-year bancassurance agreement, which will provide Allianz exclusive access to more than 660 branches located nationwide, and 4 million customers.

“The Philippines is a very fast-growing insurance market supported by a healthy economic outlook and a large, young population of over 100 million people,” George Sartorel, chief executive for Allianz Asia-Pacific, said. The agreement is part of how Allianz is building strategic business platforms, he said.

There is upside potential for insurance growth in the Asian country because penetration of the market there is currently low, the firms said. Premiums account for only 1.7 per cent of the country’s gross domestic product, compared with 7.4 per cent of GDP in Western Europe, 7.6 per cent for Singapore or 14.3 per cent for Hong Kong.