Manulife acquires orphaned policies of defunct Metlife

Canadian insurer Manufacturers Life Insurance Corp. Philippines Inc. (Manulife Philippines) has acquired the life insurance policies of Metlife Insurance Corp. of the Philippines (Metlife Philippines).

The US-based Metlife Phils. packed its bags in February this year after failing to meet its targets in 2001. The company obtained its operating license in September 2000.

Acquired by Manulife Phils. are a little over 100 life insurance policies under an assumption reinsurance agreement with Metlife Phils. The Insurance Commission (IC) approved the agreement recently.

"We are happy to take the orphaned policy holders and offer them high-grade policies and other financial products," Manulife Phils. president and chief executive officer Renato A. Vergel de Dios said.

"This agreement demonstrates our commitment to serve the Philippine insuring public and is consistent with our objective of being the most professional life insurance company in the country," Vergel de Dios added.

Manulife Phils. ranked consistently among the top life insurers in the country in terms of total premiums in the past five years, and industry officials believe the rankings would not change in 2001.

Total premiums grew by a little over 12 percent last year while new businesses grew by five percent.

"In the first quarter of this year, new business grew by 25 percent. That is a good start," the Manulife Phils. president said. Its one-year pre-need company – Manulife Financial Plans – reportedly ranked 17th last year in the pension category.

There are over 80 pre-need companies in the country registered with the Securities and Exchange Commission (SEC).

In a statement, Metlife said it was leaving the Philippine market because "we do not see prospects for growth and profitability that meet our standards. We will focus on more attractive markets in the Asia Pacific region."

The Insurance Commission has been encouraging particularly the non-life sector to initiate mergers and acquisitions to increase the competitive level of the country’s insurance industry versus its Asian counterparts.

Multinationals and local corporates prefer tapping foreign life and non-life insurance companies over the domestics due to the high cost of premiums. The uncompetitive rates are due mainly to the high level of taxes that comprise almost 25 percent of the premiums in the case of non-life products.

Last month, Prulife of UK acquired ING Life. Last year, ATR Professional Life acquired GE Life Insurance Co. (GE Life), and it is finalizing full acquisition of All Asia Life Assurance Corp. (All Asia Life).

Also in June, a mega merger was initiated between local financial giant Bank of the Philippine Islands (BPI) and the Mitsui Sumitomo Insurance Co. of Japan, forming the BPI/MS Insurance, one of the five biggest non-life insurance companies in the country, with a consolidated gross premium of roughly P1.793 billion in 2001.