AIG launches M&A insurance in Phl

MANILA, Philippines - Fresh from the introduction of director and officer (D&O) insurance early this year, AIG Philippines followed it up with the launch of its warranty and indemnity (W&I) insurance, often referred to as merger & acquisition (M&A) insurance.

AIG Philippines, a registered non-life insurance company, is a subsidiary of American International Group (AIG), one of the biggest insurance and financial institutions in the world.

It presently concentrates on non-life insurance products for corporate entities.

AIG AsPac regional mergers and acquisitions head Michael Turnball said the Philippines has a potential for M&A transactions of between $400 million to $500 million annually due to the snowballing interest of foreign investors in the Philippines and in the Asia Pacific region.

“AIG issues an average 60 W&I insurance policies a year in the Asia and Pacific region,” the regional M&A expert based in Hong Kong said.

The Asia Pacific region and the 10-member Association of Southeast Asian Nations (Asean) have been expanding in a fast pace that the region now accounts for a third of global gross domestic product (GDP).

The Asean Economic Community (AEC) has also been the target of M&A from corporations coming from both the developed economies as well as emerging Asian economies.

Thus, insurers such as AIG have been aggressive in expanding into these markets to offer corporate protection.

Turnbull said AIG has been receiving more inquiries about M&A insurance from firms in the process of acquiring or expanding in the region.

In previous years, AIG’s Singapore and Hong Kong offices received M&A inquiries.

“Lately, it has expanded to Japan, Korea, China, Malaysia and the Philippines,” he said.