Multinational firm Pacific Century Group (PCG) will put up a life insurance company in the Philippines, hoping to cash in on the projected growth of the country’s insurance sector.
This makes the conglomerate the first foreign investor in the country’s insurance sector after the new Insurance Code was signed into law on Sept. 5.
Insurance Commissioner Emmanuel Dooc said the new insurance company would be named FWD Life Insurance Co. and would start operations by yearend.
He said PCG already had put up the P1 billion in capital requirement mandated by the Insurance Commission. It is now completing the administrative requirements.
“The new investor will come in amid an improved business and regulatory climate in the country,” Dooc told reporters.
PCG, whose operations are focused on Asia, has interests in various sectors, including technology, media and telecommunication, financial services and infrastructure.
Last year, PCG took over the businesses of international financial services firm ING in Hong Kong, Macau and Thailand.
PCG intends to make the Philippines one of its key investment sites, Dooc said.
Once PCG’s life insurance business in the Philippines takes off, the company may consider expanding to the non-life insurance sector, Dooc said.
The amended Insurance Code has made the Philippines an attractive market for foreign insurance companies, he said. This is because the new law removed the difference in capital requirements between foreign and domestic companies putting up an insurance firm in the country.
Under the new law, all companies entering the Philippine insurance sector must put up P1 billion in paid-up capital.
But existing players are given more leeway. They may increase their capital requirements once every three years. This year, they are required to have P250 million, and an additional P300 million by 2016. By 2019, they must add P350 million, and P400 million by 2022.
The increase in capital requirements is meant to ensure that existing players have sufficient means to service their liabilities to plan holders.