In year 2002, the Philippines saw a marked reduction in some insurance companies’ operations. From 151 in 2001, the number of companies went down to 139 in 2002 due to mergers, acquisitions, voluntary withdrawal, or mandated closure because of non-compliance of government requirements (www.ic.gov.ph).

It has been a tradition that insurance products have been promoted and sold through agency systems. For the past years, new developments in consumer behavior and technological changes have urged banks and insurance companies to work together. Bancassurance is a good distribution channel to capture more clients for both banks and insurance companies.

The topic on the impact and opportunities of bancassurance are based on the insights of Equitable PCI bank bank employees. It shows how these employees respond to the financial planning services offered by the insurance tie-up. In a bancassurance set-up, financial planners or advisors are designated to bank branches to offer free financial advice on what good investments to consider based on the client’s needs. If the need for protection arises, the financial advisor can easily offer the bancassurance products though they may cross-sell bank products too, if the client opts to invest in a short-term basis.

Bancassurance growth has been driven by the need to cut costs, increase efficiencies and develop ties in the banking and insurance industries. The nature of the relationship between these two industries is evolving into a more symbiotic state. Banking and insurance have plans to maintain their market position by capitalizing on the market opportunities offered by cross-selling of insurance products. The success of bancassurance tie-ups lies on the response of bank employees as they provide qualified leads to financial advisors. This study aims to know the responses of bank employees of Equitable PCI on the tie-up and formation of Philam Equitable Life Assurance Company and its goal to become one of the bancassurance leaders in the Philippines.

The Philippine Life Insurance Industry
The life insurance business started a century ago. It has a strong potential for expansion since only 20% of the 80 million populations are insured. Foreign companies hold 56.97% share of the market in terms of premium income, which is 13.94% more than that of the domestic companies. At present, there are 24 domestic and 18 foreign-owned life companies in the Philippines.
The Philippine market is still dominated by traditional products such as whole life, endowment and term policies where a life company assumes the risk as the benefits are all guaranteed. Retirement or pension plans account for a small segment of the life companies’ business because of the unfavorable tax treatment on these products. Modern products such as universal life and other unit-linked policies that are common in some countries have yet to be developed and introduced in the Philippines.
Governing rules on the life insurance industry are present in the Insurance Code of 1978. The Insurance Commission is the government agency mandated to enforce the provisions of the said Code. Under the present set-up, the Insurance Commissioner whose duty is to ensure that all laws relating to insurance are fully executed heads the Commission.

The Philippine Banking Industry
Mergers and Consolidations During The Asian Crisis
Even before the Asian crisis, a major feature of the reform initiatives of Bangko Sentral ng Pilipinas was the progressive increase in the minimum capitalization and the
encouragement of mergers and consolidations. The aim is to promote financially strong and well-managed banking institutions.
Mergers and consolidations help merged/consolidated banks work with greater efficiency in their collective experience, expertise and technological know-how. The parties to mergers and consolidations have a strategic vision to make their enterprise more competitive since it will allow them to compliment each other in terms of the markets being served and the products and services being offered to the clientele (Reyes, 2001).

Company Background
PHILAM EQUITABLE LIFE ASSURANCE COMPANY has been borne out of the strategic alliance between two giants in the financial services industry- Philamlife which is the undisputed market leader in the life insurance industry and Equitable PCI Bank which is one of the largest universal banks in the country. The company was officially formed on October 22, 2003 with Philamlife’s 95% acquisition of Equitable PCI life.

PHILAM EQUITABLE was recreated to focus on the sale of life insurance to the customer base of Equitable

PCI Bank, drawing on the bank’s extensive branch network across the Philippines. It is the company’s vision to be the dominant bancassurance player in the country.

The primary distribution channel of Philam Equitable is Bancassurance. It uses the bank’s head office and branches as outlets for the presentation and sale of insurance products. This is made possible through its pool of Financial Sales Executives (FSEs). These FSEs are trained to render professional financial planning service with the end goal of identifying the client’s over-all financial needs and providing them the means to address these needs through various life insurance products. By the end of 2005, the company envisions to have deployed one FSE to each of Equitable PCI Bank’s over 400 branches nationwide.

The Company’s strong background capitalizes on Equitable PCI Bank’s vast customer base. It provides a financial planning service that is tailor-fit to the specific needs of each of the bank’s identified customer segments. It also draws world-class manufacturing expertise from its parent company, Philamlife, which enables it to provide a comprehensive range of life insurance products to its clients. The product offerings are as follows:

· Preferred Dollar: a single premium dollar denominated endowment policy
· Preferred Scholar: a comprehensive college education policy
· Preferred Flexisecure: a flexible whole life protection policy, and
· Preferred Provider: a pension product that gives clients a choice on how to plan for their future needs

EQUITABLE PCI BANK
In September 26, 1950, Equitable Banking Corporation opened its doors to the banking public as the first commercial bank to be licensed by Central Bank of the Philippines. Go Kim Pah was elected chairman. The bank adopted a double perfect circle logo expressing the chairman’s desire to do business in the area of South China, where the Philippines lies. EBC was also able to establish its first foreign branch in Hongkong, becoming the first Filipino Bank in the Crown colony in August 15, 1963.
Equitable Bank Foundation Inc. was established with the aim of being a significant and enduring human enterprise engaged in non-profit social welfare, cultural, and charitable activities. In 1980, the Equitable Visa Credit cards, both domestic and international, were launched. Peter Go Pailian and Manuel Morales were elected Bank Chairman and President, respectively. The bank was able to obtain its universal banking license in March 21, 1988. It was a good opportunity to invest in non-allied undertakings.

EBC was appointed as the clearinghouse of the Makati Stock Exchange. Among its functions were the clearing and settlement of trading transactions, including the sale and purchase of stocks in the stock market.

In July 17, 1996, the Central Bank of the Philippines issued a Certificate of Authority for EBC to operate a savings and mortgage bank. Equitable Savings Bank opened its doors to the public at the ground floor of the EBC building in Greenhills. Later on, the merger plan of Equitable Bank and PCI bank was approved in 1999, giving a chance for both banks to expand their markets and develop more products suitable for their clients.

Theoretical Framework
In Europe, bancassurers have developed three basic distribution models to promote the strategies of cross- selling of insurance products inside the bank premises. This enables bank employees to further show their support in selling the products and promote financial planning services. According to Manoj Kumar (2001), these models are the following:

1. Integrative/ Generalist Model
This model distributes products through existing bank channels. There is involvement on the part of the bank employees because they sell insurance products to customers. Theoretically, this offers “One Stop Banking”. It requires extensive training to branch staff. The branch employees are supposed to know the details of all the insurance products the bank is offering. In the case of Equitable PCI branch employees, some of them initiate the first call by endorsing the products offered by Philam Equitable or they require FSEs to send proposals through direct mail. Direct mail and telemarketing are also examples of integrative approaches.

2. Specialist Model
This model distributes investment or other complex insurance products through product experts who are generally employees or representatives of the insurance company. Platform bankers help identify prospects who are then contacted by an insurance professional. The process itself requires less training but requires higher compensation to further support the referral process. Process can be determined through signature cards and account database as endorsed by a bank employee. Specialist model may not meet all of customers’ needs since it lengthens the process of selling the products of even an ordinary insurance product, which can otherwise be sold across the counter.

3. Financial Planning Model
The financial planning model is the only team approach wherein it offers each customer a full financial planning package addressing all of the individual’s financial concerns, risk tolerances and location in the cycle of life. The process itself is beneficial for the customer, the bank and the insurer as the customer is viewed “outside the numbers.” Customer’s needs are being assessed in relation to their current and future needs. The bank sales force has first has to be taught how to qualify prospects, make referrals and properly approach the customer/prospect. Insurer’s bank partners must learn how to spot existing depositors’ needs to represent insurance opportunities. Since bank representatives have always done this in conjunction with bank products and services, it is new to them to apply this concept to selling insurance products as well. In general, a well-trained sales person can determine certain “life triggers”-birth, death, career change or even catastrophic event to be able to lead his or her valued bank client to new insurance products. If the bank staff shows how to capitalize on the said triggers, they will automatically provide good leads to the insurance group, and sales will follow.
The tie-up between Equitable PCI Bank and Philamlife adopts the above-mentioned models. This gives way to bancassurance as new revenue in strengthening the financial services industry.

Conceptual Framework
Figure 1. A Conceptual Model on the Effect of Bancassurance Based on the Insights of Equitable PCI Bank Employees


Since the aim of this study is to know how bancassurance works in the day-to-day banking operations as observed by Equitable PCI branch employees, the researcher came up with a conceptual model. This is somehow related to the theoretical model of Kumar. The employees rated four different categories namely: the Philam Equitable Life Assurance products, branch clients, branch financial sales executive, and branch employees.

Ratings on the above mentioned categories would determine the areas of concern that Philam Equitable Life Assurance Company should focus on. During its formal launching in December 2003, the first thirty-four pilot branches experienced both positive and negative impact on how bancassurance worked in their respective branches.

In this study, the researcher also aims to develop strategies that will determine other opportunities of bancassurance that are, not only, beneficial to Philam Equitable, but also, to the branch employees of Equitable PCI bank. The bancassurance operation is a joint activity between the FSE and bank employees. Its success lies on the relationship of these people aside from considering the products involved and the bank clients that they are servicing everyday. Ratings given by each employee will help the company improve its marketing strategies in promoting their products inside the bank.

In some cases, clients are not even after the product benefits. As long as there are available funds, they will tend to invest on a certain product suggested by their favorite bank employee. At Equitable PCI, lead generation comes from the bank employees because they know their clients in terms of needs, capacity to pay, and how they support the products and services of the bank. Aside from the fact that they are also promoting other good investments, trust in PELAC’s products is also important. The researcher, therefore, decided to conduct a study to determine the employees’ insights since lack of training in bancassurance is also one of the problems why some branches are not actively selling. They just depend on the updates disseminated by their FSEs while pocket briefing was only done during the launching.

Impact pertains to the positive and negative perceptions of Equitable PCI bank employees regarding bancassurance operations. Some of these employees think that selling insurance products inside the bank is an additional burden on their job responsibilities. Different views on bancassurance were taken into consideration in this study in order to determine the opportunities that arise in bank and insurance ventures.

On the positive side, some bank employees have been looking forward to the cash incentives given to them as they give qualified leads to their Financial Sales Executive. The researcher was able to find out that some “supportive” bank employees wear many hats. Aside from being a banker, they also act like insurance agents when offering bancassurance products to their valued clients. If majority of these employees have this kind of thinking, bancassurance will surely become successful.

Statement of the Problems
This study is designed to determine if there is a significant effect on the employees of Equitable PCI bank with regards to their support on the bancassurance products of Philam Equitable Life Assurance Company. It specifically aims to answer the following questions:

1. What is the profile of the employees at the six cluster branches of Equitable PCI Bank Metro West 2 Area?
2. Is there a significant difference on the impact of bancassurance based on the insights of Equitable PCI employees at Metro West Area 2?
3. Is there a significant effect on the character of the PCI-Equitable employees on how they support bancassurance within their branch banking operations?

Hypotheses
Ho:1 There are no significant differences in the employee’s insights in supporting the tie-up between Equitable PCI Bank and Philamlife.
Ho:2 There are no significant differences in the inherent levels of the individuals included in this experiment.

Significance of the Study
The following will benefit from the results of this study on the impact and opportunities of Bancassurance based on the insights of Equitable PCI Bank Employees:
Insurance Company (Philam Equitable Life Assurance Company)
· Important points can be obtained from this research. it can help them see the necessity to continuously develop strategies in encouraging bank sales force to promote and support bancassurance within the branch operations.

Bank Employees (Equitable PCI Bank)
· Through this study, bank employees can appreciate the importance of finding ways to provide personalized services to branch clients as they help in promoting bancassurance according to their specified needs. This will also help them in terms of strengthening their relationships with their Financial Sales Executives as this activity is considered a team effort and part of the daily routine in the bank.
Financial Sales Executives
· This study will also benefit financial sales executives and other financial planners as they discover the strengths and weaknesses of bancassurance operations based on the insights of bank employees. It will give them the opportunity to master their financial planning skills and improve relationship with bank employees and clients, as well.

Future Researchers
· This study is a welcome idea to researchers who wish to make related studies about bancassurance. It will be a great contribution to the entire financial services industry as it seeks ways to strengthen bancassurance as part of the daily routine in branch banking operations. Future studies will help them to continuously improve the current set-up adopted by banks in promoting products of their insurance affiliates or tie-ups.

Scope and Limitations of the Study
The topic included in this research is about the insights of Equitable PCI bank branch employees regarding the financial planning advisory offered by the bank and its tie-up with Philamlife. Since bancassurance has been a new trend for both banking and insurance industries in the Philippines, the researcher would like to know how bank employees support these activities as it helps in the daily operations of the bank.

Philamlife’s products will not be discussed in this study because they are different from the bancassurance products being offered to the branch clientele. Life insurance products of Philam Equitable are purely designed to tailor-fit to the needs of the bank customers. The researcher will not include figures related to the sales of its bancassurance operations because the company does not want to disclose them for confidential reasons.

In terms of the content of the research, the employees’ population for the first 150 branches of Equitable PCI Bank was assumed because of employee turnover for each branch. The number of employees who are being pulled out for training because of promotion and those newly hired ranked as staff pool were also taken into consideration.

This study used sixty (60) branch employees of Equitable PCI bank Metro West Area 2. The questionnaires were equally distributed to ten (10) employees for each of the six branches who participated. The employees’ rating results were based on the four categories indicated in the questionnaire namely: Philam Equitable Life Assurance Companies’ products, bank clients, branch financial sales executives and branch employees. The said categories will help determine the impact and opportunities of bancassurance according to the respondent’s observation. Employees of other branches were not used because some of them do not have permanent financial sales executives who regularly stay in the branch to sell life insurance products and offer financial planning advisory. Employees who are designated in the main office’s departments and other subsidiaries of Equitable PCI were not chosen as respondents because they are not part of the daily branch banking operations. They do not have direct contact to bank clients and Financial Sales Executives. Some of these employees are not even updated on the products offered by the bank and its tie-up. Comparison of Philam Equitable products from existing bancassurance products offered by other commercial and universal banks will not be discussed in this research.

Definition of Terms

The following terms used in the study are defined operationally for a clear understanding:
Bancassurance. This concept approved by the Bangko Sentral ng Pilipinas that allows the use of bank branches to sell the products of insurance companies. It is a sophisticated cross-selling industry that will benefit consumers in the Philippines, as well as, the local and foreign banks and insurance firms (Goyer, 2002).

Financial Services. This is traditionally classified into three major sectors namely: banking, insurance and securities. Bancassurance also belongs to the financial services since banks and insurance companies tie-up to cross-sell insurance products to the banks’ clients.

Financial Services Integration. This term is linked with one of the three major financial sectors. It occurs through the blurring of product lines because of innovation particularly in the case of banks and insurance companies’ tie-ups wherein they create and sell products related to each other.
Financial Sales Executives. These are trained people who render financial planning services to Equitable PCI clients with the goal of assessing client’s overall financial needs and offer such bancassurance products tailored-fit to those needs.

Lead generation. This is the process used by insurance companies who make a tie-up with banks. They grab the opportunity of getting clients from any of the bank employees who has given them the permission to call or market insurance products being offered inside the bank branches.
Whole life plan. This plan is a combination of savings and insurance protection. The protection period begins on the effective date of the policy until age 100.

Endowment. This plan is a combination of term and pure endowment that promises to pay a guaranteed sum upon surviving a specified age or year.

Term Policies. This is a policy that addresses permanent needs temporarily and covers protection on a limited basis.

Insurance Code of 1978. The Philippine Insurance industry is governed by this code and is under the supervision of Insurance Commission, which is part of the Department of Finance.
BSP Circular 357. This is a circular approved on October 17, 2002 which allows a bank subject to prior approval of the Monetary Board to use any or all of its branches as outlets for the presentation and sale of the financial products of its allied undertaking or its investment house units.


CHAPTER 2
RELATED LITERATURE AND STUDIES
This chapter presents the review of related foreign and local studies and literature. These are all allied to the current study, dissimilarities, and similarities synthesized at the end of the chapter.

Local Literature
According to Virtual Asia Philippines (2002), the controversy on bancassurance started even before banks got the idea of making tie-ups with some of the well-known insurance companies in the country. In July 2002, the American Chamber of Commerce in the Philippines (AMCHAM) asked the Bangko Sentral ng Pilipinas to reconsider its earlier decision to allow bancassurance through certain banks. This involves the practice of selling insurance products. It constitutes 51% interest or more in the insurance company where insurance products are being offered.

Under the Circular 357, Bangko Sentral ng Pilipinas is allows banks to “sell the products of their subsidiaries in their premises, as well as, use their resources for the subsidiaries’ benefits. An insurance company is called a subsidiary of the bank if the bank owns equity of at least 51% in the insurance firm.

As part of the controversy, AMCHAM said that this kind of arrangement creates an uneven playing field to the disadvantage of foreign insurance firms that are not subsidiaries of commercial banks. This is against the principle of open market and free competition. Some American executives advised the BSP to let the banks and insurance firms independently select their own distribution strategies.

New York Life Insurance Philippines Inc. laments the issuance of the circular because this would discourage foreign companies from investing in the Philippines and may force some to leave the market. Certain foreign banks are also looking for the possibility of buying local banks in order to increase their own market penetration.

George May (2002) said that largest companies in the United States such as New York life, expects to double its sales in the Philippines with its cross-selling tie-up with Allied Banking Corporation. He also said that bancassurance accounts for a small extent now but over time it will account for a significant part of the insurance company’s multi-distribution strategy.

Dumlao (2004) said in a published article that insurance markets could be classified into three levels of maturity: fully mature, transitional, and incipient or emerging. The Philippines is clearly in the third level. She also stressed out that the growth in manpower employed by insurance agencies does not ensure corresponding growth income. In 2001 and 2002, there was a sharp drop in the premium income generated by the life insurance industry despite the expansion of its workforce.

According to Torrijos (2003) in a published report Equitable PCI president, Rene Bueneventura said that the bank would like to become the dominant player in the field, thus, providing an unparalleled level of bancassurance service. They always sought to respond to customers’ needs with products and service offerings that represent the leading edge of innovation in the financial services industry.

Bulos (2004) said in a published article that the competitive advantage of these bancassurance arrangements couldn’t be overemphasized. Commercial and universal banks having since been allowed to sell insurance products of their affiliate insurance companies like in the case of BPI and Ayala Life wherein affiliates were given the chance to have a built-in branch network advantage.

Local Studies
According to Milo (2002), in contrast to other developing countries, financial services integration has become a key feature of the Philippine financial system. During the 80’s, universal banking was introduced as part of a financial reform program to promote competitive conditions and foster greater efficiency in the financial system. Banks have consistently dominated the country’s financial system. Over the years, the Philippines continue to follow a policy of de-specialization by allowing banks to expand their range of permissible products and activities. This was enforced in the new General Banking Law (GBL) of 2000. This will possibly help increase the allowable limits on the equity investments of universal and commercial banks in financial allied and non-allied enterprises. A recent policy that will further increase financial services integration in the Philippines is the introduction of cross-selling. It includes bancassurance that was also under the General Banking Law.

Foreign Literature
According to a published report issued by Horus (2000), an Egyptian Insurance Newsletter, the reasons for the growing phenomena of bancassurance are the following:

Reasons for the increase growth of bancassurance:
1. Premiums on life insurance represent 55% of the world insurance premium. Life insurance is basically considered a saving market and this is one of the methods to increase bank deposits.

2. Insurers have been considering alternative modes of distribution because of the high costs that have to be paid for insurance services, particularly to the agents. The costs have become too much of a burden for many insurers compared to the returns they generated.

3. Insurers operate through bancassurance agents. They control relationships with customers. They have found that direct relationships with customers gave them greater control of their business at a lower cost. Those insurers who operate through the agency setup are hardly having any control on their relationship with their clients.

4. Prospects for increased consolidation between banking and insurance is more likely dominated and derived by the marketing innovations following the financial service modernization. Innovations include cross selling of banking, insurance and brokerage products and services; the increased used of the Internet by consumers; and a melding of insurance and banking corporate cultures.

In the article Bancassurance: Calling for a New Culture by Venkitaramanan, the author calls for a new culture in the emerging scenario of convergence of financial services in India. This is in keeping with the global trend. This article also discussed the problems of cultural integration between banking and insurance sectors. While the life insurance sector is associated with marketing innovation, consultative selling and incentive compensation, banking culture is one of relationship building. This gives little risk, stability, and compensation schemes less related to performance.

Foreign Studies
According to the study conducted by Kumar (2001), which was presented in the CEO Summits of banks and insurance companies of Asia Pacific in Singapore, the development and growth of bancassurance are the significant changes in the financial services for the past years. Banking and insurance industries have found bancassurance to be an interesting and profitable complement to their existing countries. The tremendous success of different bancassurance operations across these countries has started the idea of mergers and acquisitions especially in developing countries.

Distribution is the main issue in bancassurance and is closely connected to the regulatory climate of the country. In the Philippines, a regulatory barrier between banking and insurance has lessened. This has created a climate increasingly friendly to bancassurance.

On the other hand, Chaudri (2003) made a study on the case of personal insurance business wherein he focused on the services rendered as a differentiator. He said that in the case of insurable products, many customers are not fully aware of the benefits being offered, as well as, the terms and conditions underlying the same. Apprehension in the minds of the customers usually happens because they think that insurance companies are only interested in collecting the premium without explaining the conditions for seeking future claims. The general tendency is to avoid insurance consultants or agents.

Chaudri also stressed that the customer’s perception of the quality of services is also influenced by the courtesy extended to him when he comes face-to-face with the employees of the service provider. Lack of friendliness, warmth, and an unhelpful attitude drive away many prospective clients despite the intrinsic quality of products.

According to Pricewaterhouse Coopers, bank/insurance providers and new entrants should focus on the growing demand from customers for superior service, competitive prices and convenient access to a range of delivery channels. The emphasis is on making cross-selling an integral part of the corporate culture. As intimacy develops, cross-selling turns into cross-buying by the customer.

The insurance industry’s response to the growth and development of finance has varied greatly from country to country, according to Lafferty Business Research (1991). Facing an invasion in their territory, some insurance companies have decided to step into the banking market (mainly the savings market) either by starting a bank from scratch or by entering into distribution agreements. Financial markets, on the other hand, have been confronted with a large number of mergers and acquisitions between banks and insurers, thus establishing tight relations between the different partners.

Synthesis:
Based on the above mentioned local and foreign studies, bancassurance has the opportunity to help increase bank deposits while taking advantage of having a sure market compared to the agency system. The bancassurance operations in the Philippines once became a controversy because it had affected the performance of insurance agencies. On the part of bank employees, some are active in cross-selling such products offered by the insurance tie-up because clients will have a choice to invest in insurance-protected products while enjoying the interest they earn from other existing bank placements.

Some FSEs are having a hard time selling insurance products inside the bank. There are instances that bank clients tend to avoid FSEs because they think that it will surely lead to hard selling of the said products, knowing that agents of other insurance companies do the same thing.

If bank employees have proper training in giving leads and endorsing products offered by Philam Equitable, such problems in meeting targets for the bank and its tie-up would not be encountered. Bancassurance may have been successful in some branches but it depends on the level of support given by the bank employees. For the insurance tie-up, it is an advantage to have salaried employees for bancassurance operations because it would lessen cost compared to agencies that have commissioned agents. Having a sure market while enjoying the protection benefits of insurance is the opportunity that banks and insurance agencies should look forward in this new distribution channel.

CHAPTER 3 METHODOLOGY
This chapter covers how the researcher conducted the study, provided the research instruments, and applied the statistical treatment and sampling technique according to the responses of Equitable PCI employees.

Research Method Used
In this study, the researcher used inferential statistics wherein generalizations and conclusions are drawn about a population based on the sample results.

To determine the responses of the branch employees of Equitable PCI bank regarding bancassurance, a rating scale was applied. It measures the level of evaluation of the respondents using varying descriptive terms in the questionnaire. The following are the categories used:

1. Philam Equitable Life Assurance Company’s products
Rating factors to consider are pricing, product design, demand, guaranteed return upon maturity, and edge from other bancassurance products offered by the competitors.

2. Bank Clients
Rating factors to consider are client responses on the products and services offered by the insurance tie-up, interest in free financial planning advisory, commitment and support to any products offered by the bank, interest in transferring placements from other banks, and interest in investment products according to specific needs.

3. Financial Sales Executive
Rating factors to consider are product knowledge, conversion of leads to sale, persuasiveness, availability in the branch, and relationship with branch employees.
4. Bank Employee
Rating factors to consider are familiarity of bancassurance products, activeness in giving referrals, participation because of incentives, participation because of branch quota, trust in Philam Equitable’s products, lead conversion to sale, activeness in marketing bancassurance products even after office hours, motivation to other employees, and suggestions given.

Statistical Treatment
Parametric test was done by applying two-way ANOVA and F-test. Since the samples are related with the significant variables, two-way ANOVA is applicable for this type of research. The F-test, on the other hand, is used to check if the population meets the assumption of homoscedasticity for a parametric test (Young, 2003).

Computations for the F-test:

F = MSTr
MSE

FB = MSB
MSE

Where, j = number of columns
k = number of rows
n = number of items in the given data
SST = sum of squares total
SSTr = sum of squares treatment
SSB = sum of squares blocks
SSE = sum of squared errors
MSTr = mean squares treatment
MSB = mean squares blocks
MSE = mean squared errors

SST = åXn2 - (åXn )2
n

SSTr = å(åCTj2)- (åXn )2
n n

SSB = å(åRTk2) - (åXj)2
n n

SSE = SST-SSTr-SSB

MSTr = SSTr
j-1

MSB = SSB
k-1

MSE = SSE
n-j-k+1

Respondents

The researcher considered employees’ population of the first 150 branches of Equitable PCI bank who have its own FSEs who are in-charge of marketing bancassurance products. Sixty employees from six branches of Metro West Area 2 participated in this study. Out of 400 branches of Equitable PCI nationwide, 150 branches are actively selling bancassurance products of Philam Equitable Life Assurance Company.
Branches located in the provinces are also selling but Philam Equitable decided to designate some FSEs and consider them as part of cluster branches. It was assumed that 65 branches have 15 employees per branch and the remaining 85 have 10 employees per branch.
Employee turnover is one of the factors to be considered for not getting the exact population. Some branches have sent employees for training due to promotion or rotation. Most of the newly hired employees are ranked as staff pool in case a branch within the cluster needs additional tellers or new accounts clerk. The respondents who participated in the study are tellers, new accounts clerk, junior officers, branch head and personal banking managers.

Sampling Technique
Purposive sampling was used in the selection of employees who participated in the study. It is a non-probability sampling technique that conforms to a desired goal or criterion. This was based on the assumed population of Equitable PCI branches wherein the formula used was:
_____
n= Ö2(N)
n= number of samples
N= population of employees

The researcher only focused on branch employees of different genders, ages, positions and lengths of service in the bank. It was assumed that out of 150 branches rolled out for bancassurance operations, 65 branches have 15 employees per branch and the remaining 85 have 10 employees per branch. The following were taken into consideration for getting the total number of samples:

65 x 15 = 975
85 x 10 = 850
Total: 1,825
________
n= Ö 2(1,825)
________
= Ö 3,650
n= 60.42 samples


CHAPTER 4
PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA

This chapter presents the data gathered by the researcher in test and table forms. The tables illustrated in this chapter directly answer the problems stated in Chapter 1.

PROBLEM 1. What is the profile of the employees of the six cluster branches of Equitable PCI Bank Metro West 2 Area in terms of the following variables?
1.1. Gender
1.2. Age
1.3. Position
1.4. Length of Service

Table 1
PROFILE OF EQUITABLE PCI EMPLOYEES
METRO WEST 2

Table 1.1.
Gender

Employee Type Male Female
Officers 7 10
Rank and File 12 31
Total 19 41
Percentage (%) 31.67 68.33

Table 1.1. shows that out of sixty (60) respondents, 7 are male officers and 12 are male rank and file. On the other hand, 10 respondents are female officers and 31 are female rank and file. The percentages of respondents are 31.67% for male and 68.33% for the female. It was concluded that there are more female employees than male at Equitable PCI Bank Metro West Area 2.

Table 1.2. Age
Age Number of Employees Percentage
20-25 11 18%
26-30 19 32%
31-35 14 23%
36-40 9 15%
41-45 3 5%
46-50 2 3%
51-Above 2 3%
Total 60 100%

Table 1.2. shows that out of sixty (60) respondents, 11 employees or 18% are between 20-25 years old, 19 employees or 32% are between 26-30 years old, 14 employees or 23% are between 31-35 years old, 9 employees or 15% are between 36-40 years old, 3 employees or 5% are between 41-45 years old, and two employees or 3% are between 46-50 years old. Lastly, 2 employees or 3% are 51 years old and above. The results show that majority of the employees who responded are between the age brackets 26-30 years old.

Table 1.3. Position
Officer Level Total Percentage
Personal Banking Manager 6 10%
Personal Banking Assistant 2 3.33%
Banking Center Head 6 10%
Sales Officer 3 5%
Rank and File Total Percentage
New Accounts Associates 18 30%
Tellers 25 41.67%
Total Respondents 60 100%

Table 1.3. shows that out of sixty (60) respondents, 6 employees are personal banking managers, 2 are personal banking assistants, 6 are banking center heads and 3 are sales officers. The results gave a total of 28.33% for the officer level position. For the rank and file, there were 18 employees from the new accounts position and 25 tellers who participated in the study. The total percentage for rank and file respondents is 71.67%. In this study, majority of the respondents belong to the rank and file position.

Table1.4. Length of Service
Length of Service
Employee Type less than one year 1-5 years 6-10 years 10-15 years 15 years above
Officer Level 0 2 4 6 5
Rank and File 9 11 14 9 0
Total 9 13 18 15 5
Percentage 15% 22% 30% 25% 8%

Table 1.4. shows the total length of service per employee type. Out of sixty (60) respondents, nine employees or a total of 15% have been serving the bank for less than one year. About 13 employees for both officer level and the rank and file answered that they have been serving Equitable PCI for 1-5 years.
Similarly, 18 employees for officer level and rank and file or a total of 30%, responded that they have been serving the bank for 6-10 years and 15 employees for both officer and rank and file answered 10-15 years, which resulted to 25%. Lastly, five employees or 8% from the officer level responded that they have been staying at Equitable PCI for more than 15 years. The results show that most of the respondents have been serving the bank for 6-10 years.

Problem 2. Is there a significant difference on the impact of bancassurance based on the insights of Equitable PCI employees who belong to the Metro West Area 2?

Table 2.1
Rating Summaries of Responses
Employee PELAC BANK CLIENTS FSE BANK EMPLOYEE x2/4
1 2.60 2.20 2.40 2.50 23.52
2 2.80 2.40 2.80 2.60 28.09
3 2.60 2.60 3.00 2.80 30.25
4 2.40 2.20 2.60 1.60 19.36
5 2.60 2.40 2.60 2.40 25.00
6 2.80 2.60 2.80 2.50 28.62
7 2.60 2.40 2.80 2.50 26.52
8 2.40 2.40 2.60 2.40 24.01
9 2.80 2.60 2.80 2.60 29.16
10 2.60 2.60 2.80 2.40 27.04
11 4.00 4.60 5.00 3.30 71.40
12 4.40 4.80 5.00 3.80 81.00
13 4.20 4.80 4.80 3.60 75.69
14 4.40 4.60 4.80 3.60 75.69
15 4.40 4.40 5.00 3.80 77.44
16 4.60 4.60 4.60 3.40 73.96
17 4.20 4.80 4.80 3.70 76.56
18 4.40 5.00 5.00 3.90 83.72
19 4.60 4.80 4.80 3.80 81.00
20 4.40 4.80 4.80 3.90 80.10
21 3.00 2.60 3.40 2.40 32.49
22 3.80 3.60 3.00 2.20 39.69
23 3.40 3.20 3.20 2.80 39.69
24 4.20 3.60 3.40 4.10 58.52
25 3.40 2.60 3.00 2.20 31.36
26 3.80 3.20 3.20 2.60 40.96
27 3.00 2.80 3.00 2.40 31.36
28 3.20 3.20 3.00 2.50 35.40
29 3.40 3.20 3.40 2.50 39.06
30 3.40 3.60 3.40 2.70 42.90
31 3.00 3.20 2.80 2.50 33.06
32 3.40 3.40 3.00 2.60 38.44
33 3.80 3.20 2.60 2.60 37.21
34 2.80 3.00 2.40 2.70 29.70
35 3.00 3.20 2.80 2.50 33.06
36 3.20 3.20 3.00 2.40 34.81
37 2.60 2.80 3.00 2.40 29.16
38 3.40 3.00 3.00 2.50 35.40
39 2.80 3.00 3.40 2.80 36.00
40 2.80 3.20 3.20 2.70 35.40
41 3.00 2.80 2.80 2.60 31.36
42 2.80 3.20 3.00 2.80 34.81
43 3.20 3.00 3.40 2.60 37.21
44 3.20 3.40 3.00 2.50 36.60
45 3.00 2.80 3.80 2.70 37.82
46 2.60 2.80 3.00 2.50 29.70
47 3.00 3.60 2.80 2.70 36.60
48 3.40 3.20 3.00 2.40 36.00
49 2.80 3.00 3.20 2.60 33.64
50 3.00 2.80 3.20 2.50 33.06
51 3.40 2.60 3.40 2.50 35.40
52 2.80 2.60 3.00 3.00 32.49
53 3.00 3.00 3.00 2.40 32.49
54 2.80 2.40 3.00 2.60 29.16
55 2.80 3.00 3.20 2.50 33.06
56 3.20 2.80 3.00 2.30 31.92
57 3.40 3.00 2.60 2.60 33.64
58 3.00 2.60 2.80 2.80 31.36
59 3.00 2.40 2.80 2.40 28.09
60 3.00 2.40 2.80 2.70 29.70
TOTAL 195.60 191.80 197.80 164.90 2435.97

Table 2.1 shows the average ratings of the respondents on the questions regarding Philam Equitable products, bank clients of their respective branches, financial sales executive and their self-evaluation regarding their support on the bancassurance products.

Problem 3. Is there a significant effect on the inherent character of the employees who responded to the questionnaire on how they support bancassurance within the branch banking operations?

Table 3.1.
Impact of Bancassurance in Relation to the Effect on the Inherent Character of Equitable PCI Metro West 2 Employees

Source Sum of Squares Mean Squares df F-value Decision
Treatment 11.68 3.89 3 5.98 reject Ho
Block 91.59 1.55 59 2.38 reject HoB
Error 114.48 0.65 177
Total 217.75 239

In relation to the above table, the researcher came up with the following solution wherein the Two-Way ANOVA was used to determine the significant difference and effect of bancassurance based on the insights of the said employees. The solutions are the following using 5% significance level:

F = MSTr = 5.98
MSE

FB = MSB = 2.38
MSE

SST = åXn2 - (åXn )2
n

= 2562.13 – (195.60 + 191.80 + 197.80 + 164.90)
240

= 2562.13 – 2344.38

= 217.75

SSTr = å(åCTj2)- (åXn )2
n n

=(195.60)2 +(191.80)2 +(197.80)2 +(164.90)2 – 2344.38
60 60 60 60

= 2356.06 – 2344.38

= 11.68

SSB = å(åRTk2) - (åXj)2
n n

= 2435.97 – (195.60 + 191.80 + 197.80 + 164.90)
240

= 2435.97 – 2344.38

= 91.59

SSE = SST-SSTr-SSB

= 217.75 - 11.68 – 91.59

= 114.48

MSTr = SSTr
j-1

= 11.68
3

= 3.89

MSB = SSB
k-1

= 91.59
59

= 1.55

MSE = SSE
n-j-k+1

= 114.48
240-4-60+1

=114.48
177

= 0.65

Rejection Region

F > a (j-1) (n-j-k+1)
> F 5%, 3, 177
> 2.66 (single interpolation)

FB > Fa (k-1) (n-j-k+1)
> F 5%, 59,177
> 1.40 (double interpolation)

CHAPTER 5
SUMMARY, CONCLUSION, AND RECOMMENDATIONS

This consists of the significant results, conclusions and necessary recommendations based on the study.

Summary
The study on the “Impact and Opportunities of Bancassurance Based on the Insights of Equitable PCI Bank Employees” intended to know if there are differences and effects on the inherent character of each of the employees who participated in this research.
Specifically, it intends to answer the following questions:
1. What is the profile of the employees of the six cluster branches of Equitable PCI Bank Metro West 2 Area?
2. Is there a significant difference on the impact of bancassurance based on the insights of

Equitable PCI employees who belong to the Metro West Area 2?
3. Is there a significant effect on the inherent character of the employees who responded to the questionnaire on how they support bancassurance within the branch banking operations?

To be able to answer these questions, the researcher used inferential statistics wherein parametric test was done to determine the significant difference on the impact and opportunities of bancassurance based on the insights of Equitable PCI Bank employees. The Two-Way ANOVA was applied since the samples are related with other significant variables. The researcher checked whether the population met the assumption of homoscedasticity for a parametric test. A significance level of 5% was used for reliable results.
The employees of Equitable PCI who responded to this study belonged to the Metro West Area 2. In this case, purposive sampling was used based on the assumed population
employees who are permanent financial sales executives in their respective branches.
As of this time, Philam Equitable designated FSEs to 150 branches of Equitable PCI Bank out of its 400 branches nationwide. Sixty employees responded. All of them are currently assigned in the branch banking operations holding different positions such as personal banking managers, personal banking assistants, banking center head, new accounts associate and tellers. Majority of the respondents were from the rank and file level.

Findings
In view of the data collected and results obtained from the statistical treatment, the following significant findings are presented sequentially.
1. The profile of Equitable PCI Bank employees who responded indicates that majority from the Metro West Area 2 participants are female, giving a percentage of 68.33%. The average age of employees is 26-30 years old or 32% out of 60 respondents.
For the participant’s position, majority of the respondents are tellers, which has a percentage of 41.67%. Lastly, the average length of service is 6-10 years, which has a percentage of 30%.

2. The sum of squares has a total of 217.75. With a degree of freedom of 3 and a marginal error of 5%, the researcher compared the computed F-value of 5.98. Based on the results, this value is in the rejection region. This means that there are significant differences in the employee’s insights in supporting the tie-up between Equitable PCI Bank and Philamlife.

3. With a degree of freedom of 59 and a marginal error of 5%, the researcher compared the computed F-value of 2.38. Based on the results, this value is in the rejection region, which means that there are significant differences in the inherent levels of the individuals included in this experiment.

Conclusions
The researcher found out that there are significant differences on the impact of bancassurance based on the insights of Equitable PCI Bank employees. Significant effects on the inherent character of the said respondents have something to do in determining the opportunities of bancassurance within the branch banking operations.

Recommendations
Due to the limited scope of this study, the researcher recommended the following:
1. PHILAM EQUITABLE LIFE ASSURANCE COMPANY
1.1 The insurance tie-up should conduct a similar study in order to determine the impact of bancassurance operations to other areas aside from the Metro West 2. This will help in promoting PELAC products, increase sales and maintain a good relationship with the bank.
1.2 Trainings for both FSEs and bank employees must be organized considering the joint efforts of for both the banking and insurance industries.

1.3 Quality assurance survey must be done quarterly to monitor the performance of the FSE and improve the life insurance products being offered to the bank clientele. 1.4 Considering the trends affecting the banking industry, Philam Equitable, being the insurance tie-up, should also invest on information technology in order to have a competitive advantage with other companies who have bancassurance operations.
1.4 As most of the banks have internet banking, Philam Equitable should coordinate with Equitable PCI in terms of having a link in the bank website. This would help in promoting insurance products to the bank clientele especially for those Overseas Filipino Workers (OFWs) abroad that often update their accounts through Internet banking facility. Most of the insurance applications submitted weekly come from OFW clients of Equitable PCI and FSEs who often receive feedbacks that these clients are not aware of the bancassurance products because they were not promoted in the bank’s website. Internet banking will also help simplify insurance applications especially when Philam Equitable develop new products such as pre-need plans and other non-life insurance products in the future. This will pave way for more clients, hoping that they will realize the importance of having insurance protection as an investment aside from the traditional bank products being offered over- the- counter.

2. EQUITABLE PCI BANK AND ITS EMPLOYEES
2.1 The bank should coordinate with the training director of Philam Equitable for product briefings of bank employees so they are updated from time to time.
2.2 Since the Bank’s Products Division is in-charge of giving incentives for every closed sale, they should design an incentive program that would encourage all employees in providing qualified leads to their FSEs. As of the moment, personal banking managers and banking center heads are the only employees who actively participate in providing leads and marketing Philam Equitable products because of branch quota.

3. FINANCIAL SALES EXECUTIVES (FSEs)
3.1 These employees should continuously maintain a good relationship with the bank employees. It is important for them to be knowledgeable with the products of Philam Equitable so they could easily generate sales for the branch.
3.2 Availability in the branch is also important because the whole staff depends on the FSEs, especially during the processing of insurance applications.
3.3 They should also initiate weekly meetings to update the status of leads given by the branch.