MANILA, Philippines - Former American International Group (AIG) chief executive Maurice Raymond “Hank†Greenberg is in the Philippines, reportedly with an appetite to acquire a domestic non-life insurance company.
Greenberg is presently president chairman and chief executive officer of C.V. Starr & Co. Inc. (C.V. Starr), which is a huge diversified financial services firm.
“He is looking for a local domestic non-life insurance company, which is his passion and not life insurance,†an unnamed insurance executive who asked not to be named for obvious reasons.
The same source revealed that C.V. Starr fielded a search team that has been around the Philippines looking for worthwhile investments. “And they are not talking about just one insurer,†he added.
In fact, the former AIG chief executive is reportedly scheduled to meet with the Insurance Commission (IC) this week.
During the IC 65th anniversary celebration yesterday, IC Commissioner Emmanuel Dooc admitted that the commission has been playing host to a steady stream of foreign financial institutions making inquiries over the condition, the regulatory framework, and the capital health of the insurance industry.
“Mostly interested in the non-life insurance industry,†was the only information Dooc was prepared to declare.
Unnamed officials of the Philippine Insurance and Re-insurance Association (PIRA) confirmed that a number of foreign investors have been making the rounds as early as last year.
PIRA is the only trade organization representing the country’s non-life insurance industry.
“We can not be named as several of our members are holding formal and informal talks with the prospective investors, and they were asked to sign agreements with confidentiality clauses,†the PIRA official added.
They admitted that the prospective investors were foreign insurers as well as foreign venture capital.
“The Philippines is on the investment radar screen of foreign venture capital, financial institutions and insurers. Our company, for instance, has had talks with four maybe five prospective investors,†one officer said.
The foreign investors were domiciled in the US, Europe and the Asia Pacific region.
“They are enticed by the low penetration rate for insurance in the Philippines,†they said.
Finance Secretary Cesar V. Purisima admitted that the country’s penetration rate was 18.29 percent, among the lowest in the region. “And our premium to gross domestic product (GDP) about one percent,†Purisima, who was the keynote speaker of the IC event, said.
As expected, the finance secretary reminded the industry of the importance of huge capital to strengthen the insurance as well as the pre-need industry.
The impending Asean integration beyond 2015 served as a bleak reminder that the domestic industry must be at least at par with the capital level of its sub-region counterparts.
The DOF and the IC has been implementing a capital build-up program for the insurance and the pre-need industry.
A minimum paid up capital base of P1 billion will be required of the life and non-life insurance companies by 2020. The IC is also presently reviewing and formulating the capital build up program for the pre-need industry.