Mega non-life insurer formed

The merger between the Bank of the Philippine Islands (BPI) and Mitsui Sumitomo Insurance Company of Japan has created one of the biggest non-life insurance companies in the country with a consolidated gross premium of roughly P1.793 billion in 2001. The previous year, gross premiums was P1.613 billion.

BPI/MS Insurance now has a working capital of P300 million and 1,000 agents and brokers. Net underwriting income before expenses reached P365.8 million and net income was P142.9 million.

"That should put in the second and third ranking among the country’s non-life insurance companies in terms of gross premiums," Ryuichi Ito, BPI/MS president said. Official figures for the 2001 performance is still unavailable.

This year’s target is P2 billion, which should protect their second or third overall position in the industry. However, net income target for the year is P140 million slightly lower than that previous year’s performance.

"We have to make a one-time expense that would definitely tell on our net earnings. The huge one-time expense will be for retirement payments as a direct result of the merger," the insurer said.

Ito said that the bank is not overly concerned about unseating Malayan Insurance in top spot. Rather, they are more concerned with the profitability and efficiency of the non-life insurance firm, which offers among others motor, fire, and haul insurance.

"We have to be a well-balanced company concerned about service and profitability over size."

BPI/MS Insurance is actually the offspring of the FGU Insurance Corp., Mitsui Marine Insurance Co., and Mitsui Sumitomo Insurance Corp. FGU Insurance is one of the oldest non-life insurance companies in the Philippines and the first and only non-life insurance firm of the Ayala Group of Companies. It is life insurance counterpart is the Ayala Life Assurance Corp. (Ayala Life).

In 1999, FGU was acquired by BPI. On the other hand, Far East Bank and Trust Co. (FEBTC) formed an alliance resulting in FEB Mitsui Marine. When BPI eventually acquired FEBTC, it also acquired the rights to FEB Mitsui Marine.

Meanwhile, the Mitsui Insurance Company of Japan entered into a merger with Sumitomo Marine Insurance Co. resulting in the surviving company, Mitsui Sumitomo Insurance Co.