A Hong Kong-based insurance company has expressed interest to invest or even acquire a non-life firm in the Philippines, Insurance Commissioner Emmanuel Dooc said over the weekend.
Dooc said in a media briefing at least two foreign insurance companies were keen in doing business in the Philippines. He declined to name the two companies.
“One met with us very recently and they want a non-life company but they have certain requirements… since their idea is to get (a) major market share already,” he said.
The company is interested in buying a local insurer with at least P500 million in sales production and at least half of the portfolio in personalized investments, such as motor, property and personal accident.
“They are not for the big ticket items. So I hope they will find a match. So we are going to refer to these investor companies which we feel will satisfy the requirements,” Dooc said.
Meanwhile, some five non-life companies welcomed the idea of foreign investors, citing their need for additional funding to meet the P550 million minimum paid-up capital for all insurance firms before the end of 2016.
“Some additional companies have indicated interest to welcome new investors or white knight. So we are trying to help them by referring them to parties both local and foreign who have indicated interest to enter our insurance market,” Dooc said.
“Then another group are open to mergers. They have identified their potential partner for this, so they are still working for this. Five pairs have indicted [interest to merge]. But I think this has been reduced to more or less four pairs,” Dooc added.
He said 44 non-life companies had not the required minimum paid up capital.
“Three of them have already signified that they will voluntarily fold up, so these three will undergo voluntary dissolution and we have a process for that. They can get a servicing license until they have fully settled their liabilities. As you know, non-life have short-term liability, on the average it’s just one year. Then they finally wind up,” he said.
Dooc said 21 non-life companies indicated that they were capable of putting in the additional fund required to meet the minimum net worth requirement and were now in various stages of compliance.
The life sector, meanwhile, will be qualified to meet the new imposition.
“Life maybe about five or six, the rest are compliant or there is no risk… or most of them are will be able to meet the minimum net worth,” he said.
The insurance industry’s premium income declined 1.6 percent in the first three quarters of the year to P169.56 billion from P172.40 billion year-on-year.
Dooc said the life insurance sector’s premium income fell 8 percent from P145.483 billion a year ago to P133.85 billion, while that of the non-life insurance sector rose 11.8 percent to P30.096 billion from P26.91 billion.