Philippines: Several non-life insurers could be for sale
Source: Asia Insurance Review | Feb 2016
Up to eight non-life insurance companies may be up for sale this year as they are unlikely to meet the higher capitalisation requirement set by law, a senior Insurance Commission (IC) official said.
Deputy Insurance Commissioner, Mr Ferdinand George A Florendo, said that five to eight companies have informed the IC that they are considering offering themselves for sale or to be merged with another firm.
Under the insurance law, all life and non-life insurance companies must have a net worth of at least PHP250 million (US$5.3 million) at end-2013. At the end of this year, the minimum capitalisation will more than double to PHP550 million.
Data from the Philippine Insurers and Reinsurers Association (PIRA) show that at 31 December 2015, 35 insurance companies already had a net worth of at least PHP500 million. However, that of 30 other companies was below the PHP500-million mark.
At the same time, foreign firms are eyeing the Philippine insurance industry. Two foreign insurers forged joint ventures recently with local banks, namely, Ageas Insurance International and Allianz. Belgium-based Ageas has tied up with East West Banking Corp to establish a new life insurer. Philippine National Bank (PNB) and German insurer Allianz are also setting up a new life insurance venture.
Allianz beat five other foreign insurers to form the alliance with the Lucio Tan-led bank. They were from Taiwan, South Korea, Switzerland, Japan and Malaysia.
Hong Kong-based FWD Group established its presence in the country in April 2014, becoming the first foreign life insurer to enter the local market in 10 years.