Visayan Surety complies with DoF order

CEBU, Philippines - To comply with the Department of Finance (DoF) order to raise the capitalization of insurance firms to P1 billion by 2020, Visayan Surety and Insurance Corporation relies on income from its products and services, and cash infusion from stakeholders.

Visayan Surety and Insurance Corporation is a Cebu-based non-life insurance company with more than 80 years of experience and good reputation. The firm is under the leadership of the third generation Gotianuy family.

The DoF Order No. 15-2012 requires existing insurance companies to have at least P400 million by 2014, P600 million by 2016, P800 million by 2018 and P1 billion by 2020.

The new order also calls for reinsurers, those companies that insure the insurers, to have a capitalization of P2 billion by 2020 while micro-insurance companies must have at least P500 million. 

Kenneth Go, president of Visayan Surety, said that even if the Cebu economy is booming it’s tough for insurance companies to comply with the new order. 

“Already, a lot of small insurance companies have closed and more will soon follow since they could not afford the capitalization requirement set by DoF. But since it’s a government order there’s nothing we can do but comply,” Go stated.

Visayan Surety targets a year-on-year growth, aiming to reach P190 million worth of premium production from the P135 million last year through cash infusion.

Go explained that the performance of non-life insurance companies is affected by the economic growth of the country since there is the demand to insure construction, buildings, infrastructure and transportation with the upsurge of domestic and foreign investments.

He added that the prevalence of natural and man-made calamities, disasters and incidents such as floods, earthquakes, typhoons and fire also trigger the increase on premium for such business. 

Amid the presence of large-scale players and multinational companies, Visayan Surety aims to establish its own niche through fair and equitable settlement of claims, Go said. 

Cebu accounted more than 50 percent of the 10, 000 clients nationwide of Visayan Surety, Go said.

Its bestselling services include motor car insurance with quick claims and bonds with faster insurance and easier access for local clients.

Visayan Surety fully support the country’s vision to compete with other countries. It understands that the government’s thrust to have companies with high capitalization was arrived at after the signing of the ASEAN market free trade agreement.

According to Finance Secretary Cesar Purisima, the capital build-up program intends to arm the country with greater efficiencies and deeper market penetration in the global industry. 

— (FREEMAN)