Quantcast
Latest Stories

More mergers among insurance players seen

Fewer, stronger institutions likely to emerge, says exec

By

Mergers and acquisitions in the insurance sector may soon take place following the recent hike in capital requirements, the Insurance Commission said.

According to Insurance Commissioner Emmanuel Dooc, consolidation is one of the natural consequences of the higher capital requirements and is something the regulator welcomes with open arms.

The commission prefers to have fewer but stronger players in the insurance sector, Dooc said, noting that there are far too many small institutions in the industry.

“We are now expecting more mergers and consolidation among insurance companies. This is something positive, especially with the integration of Asean (Association of Southeast Asian Nations) set in 2015,” Dooc said.

Under the new Insurance Code, which President Aquino signed into law last month, life and non-life insurance firms are required to increase their capital every three years until 2022.

In particular, an insurance company will need to raise its net worth from P250 million this year to P550 million in June 2016, to P900 million in June 2019, and finally to P1.3 billion by June 2022.

Dooc said that, as insurance companies grow stronger due to consolidation, industry players will be better equipped to survive the tough competition expected from the integration of Asean member economies.

The scheduled integration of will entail the lifting of as many barriers as possible to allow free flow of trade and investments across member countries.

The integration will likewise result in an increase in business activities, thereby boosting job creation and income across the region.

Tougher competition, however, may cause weak businesses to fold up.

Dooc believes that mergers and acquisitions are necessary so that insurance companies in the Philippines will become more competitive.

“The provisions in our amended code will make our insurance industry players more able to compete with counterparts in neighboring countries,” Dooc said.

There are a little over 100 insurance companies in the country, 68 of which are non-life insurance firms, he explained.

The number of non-life insurance companies at present has significantly been reduced from about 90 institutions reported two years ago, he added.

The decline in the number of industry players came about as some small institutions were compelled to surrender their licenses while others decided to undergo mergers.

Dooc said more mergers are expected to take place soon in the non-life insurance subsector as industry players strive to meet the higher capitalization requirements.


Follow Us


Follow us on Facebook Follow on Twitter Follow on Twitter


Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Business , economy , Insurance Commission , News

  • eight_log

    Mergers/buyouts or whatever you call them is a vain to policy holders. This is one trick that insurance companies resort to cheat and defraud policy holders …. ITONG INSURANCE COMMISSION AY DAPAT BUWAGIN AT MGA MGA OFFICIALS NYAN AY IKULONG!!!! THEY ARE THE ONES CONDONING THE SCAMMING WAYS OF SOME OF THE INSURANCE COMPANIES!!!!!!



Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94
Advertisement
Advertisement

News

  • Slain officer’s ‘diagram’ rocks PNP
  • 2 contractors fined P25,000 for delays in Edsa rehab
  • Luisita beneficiaries take over renters
  • 5 years of hard work pay off for top UP grad
  • Art, music, book sale mark Earth Day at Arroceros park
  • Sports

  • Galedo caps ride of redemption
  • Beermen, Express dispute second semis slot today
  • Lady Agilas upset Lady Bulldogs in four sets
  • NLEX roars to 7th D-League win
  • Zaragosa, Park forge PH match play duel
  • Lifestyle

  • Summer Mayhem: The ultimate beach experience
  • A haven for steak lovers
  • Gongs and southern dances star in a workshop at San Francisco Bayanihan Center
  • This woman ate what?
  • Photos explore dynamics of youths’ sexual identity
  • Entertainment

  • Kristoffer Martin: from thug to gay teen
  • Has Ai Ai fallen deeply with ‘sireno?’
  • California court won’t review Jackson doctor case
  • Cris Villonco on play adapted from different medium
  • OMB exec’s assurance: We work 24/7
  • Business

  • Gaming stocks gain, PSEi eases on profit-taking
  • Cebu Pacific flew 3.74M passengers as of March
  • Corporate bonds sweeteners
  • Professionals in the family business
  • Foreign funds flowed out in Q1, says BSP
  • Technology

  • Vatican announces hashtag for April 27 canonizations
  • Enrile in Masters of the Universe, Lord of the Rings?
  • Top Traits of Digital Marketers
  • No truth to viral no-visa ‘chronicles’
  • ‘Unlimited’ Internet promos not really limitless; lawmakers call for probe
  • Opinion

  • Editorial Cartoon, April 25, 2014
  • No deal, Janet
  • Like making Al Capone a witness vs his gang
  • MERS-CoV and mothers
  • A graduation story
  • Global Nation

  • US4GG: Aquino should ask Obama for TPS approval, drone technology
  • Complex health care system for California’s elderly and poor explained
  • Tiff with HK over Luneta hostage fiasco finally over
  • DOLE sees more Filipinos hired by South Koreans
  • Filipinos second-shortest in Southeast Asia
  • Marketplace