Manulife takes over RP unit of CMG Life

Canadian insurer Manufacturers Life Insurance Company Philippines Inc. (Manulife Philippines) is taking over the Philippine operations of CMG Life Insurance Co. Inc. (CMG Life).

Manulife Phils. Was ranked fifth among the life insurance companies in the Philippines last year while CMG Life placed 11th overall.

Industry sources said there is already an agreement between the two foreign-based insurers and that "they were waiting approval of the regulatory agencies in their respective countries including the Insurance Commission (IC) of the Philippines which would likely be a mere formality."

The same sources said the acquisition could move Manulife Phils. one notch higher to fourth place in terms of gross premiums.

It was reported that CMG Life opted to pull out its Philippine operations as organic growth as well as the life insurance industry "was too slow, too small" to make it viable. It has already profitable centers in Indonesia, Hong Kong, Vietnam, and the People’s Republic of China.

For Manulife Phils., the acquisition will strengthen its hold at fifth place and probably move a notch higher depending on how it performs the rest of the year. Early this year, it acquired the life insurance policies in force of defunct US-based Metlife Insurance Co. of the Philippines (Metlife Philippines).

In the first semester, it reported a 16-percent growth in total premiums. Manulife Phils. registered a 39-percent increase in terms of new sales.

"We need the first half with a respectable 39-percent growth rate in total sales," Manulife Phils. earlier reported. In 2000, it registered a P500-million net income while first year premium income grew by nearly 25 percent.

CMG Life reported total premiums of P675 million while its policies-in-force stood at 37,352 as of end 2001.

It was learned that CMG’s pre-need and health maintenance organization (HMO) companies will also e sold. Blue Cross Health Care Inc. is reportedly acquiring CMG Health Co. Inc., while several pre-need firms are eyeing CMG Plans Inc.

There are still reports on the status of CMG Management Advisory Inc.

In the past 14 months, the insurance industry experienced a minor consolidation with several mergers activities. At the end of 2001, a total of 42 life insurance companies were operating. However, this was reduced to 38 this year after a number of mergers and acquisitions.

ATR-Kim Eng Capital Partners and The Professional Group (TPG) acquired GE Life in August last year. ATR-Kim Eng is the combination of the ATR Holdings Inc. and the Singapore-based Kim Eng Holdings Ltd. That resulted in ATR Professional Life Assurance Corp. (Professional Life).

Total premium income of the country’s life insurance industry grew 11.53 percent, or from P26.933 billion in 2000 to P30.39 billion last year based on unofficial estimates. The life industry forecasted premium growth at 15 to 16-percent.

In 1999, premium income of the life insurance industry was registered at P22.403 billion. In 1998, premiums reached P19.358-billion.

Thus in the past four years, the life industry’s premium income grew by an annual average rate of 15.82 percent.