Philippine non-life insurer Stronghold Insurance Co. has initiated a merger with Milestone Guaranty and Assurance Corp. and BF General Insurance Co. There are also reports that Stronghold has also initiated talks with Premiere Insurance and Surety Corp. and Country Bankers Insurance Corp. for a possible five-way deal.
In case of a successful merge, the resulting company will have a combined premium portfolio of US$48.6m, making it one of the top 20 industry players in the Philippines.
Commissioner Emmanuel Dooc of the Insurance Commission (IC) did not confirm the reports, but he noted that companies are in the process of consolidating.
“Distressed companies are having talks with healthy insurers for possible merger,” Dooc said.
Mergers and acquisitions are seen to pick up in the Philippines’ non-life insurance sector, as government regulations are set to raise the capital requirement to US$11.9m from US$5.4m at the end of the year.
According to several non-life insurers, the proportion between volume of business and number of industry players makes it more lucrative to sell at a possible profit than to raise additional capital to meet the new requirements. The IC predicts that the number of non-life insurers could decrease to just over 40 by 2017.
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