Philippines: More consolidation ahead in non-life sector
Source: Asia Insurance Review | Jul 2016
Several non-life insurers are expected to merge this year amid higher capital requirements, in a market which has seen the number of players fall from 90 in 2011 to 65 at present.
“Distressed companies are having talks with healthy insurers for possible mergers,” Business World reported citing Insurance Commissioner Emmanuel Dooc.
Under the insurance law, the minimum paid-up capital of life and non-life insurers have been gradually increased. Existing insurers must have a paid-up capital of PHP550 million (US$12 million) by December 2016, PHP900 million by December 2019 and PHP1.3 billion by December 2022. At end-2015, only nine non-life companies had at least PHP500 million in paid-up capital.
Some non-life insurers say that the volume of their current operations compared to increasing competition and higher capital requirements along with the implementation of the risk based capital, makes it more attractive for them to sell at a possible premium rather than raise additional funds to meet the regulatory requirements.