MANILA, June 21 – An official of a non-life insurance company said closure of some companies is not negative since some are part of mergers that will further help strengthen the industry.
Antonio Roderick B. Cabusao, AVP of Liberty Insurance Corp., told reporters that to date there were 63 non-life insurance companies but five would soon close down and eight were now in merger process.
Unlike beliefs that the closures are because of incapacity to further service their clients, Cabusao said some had decided to surrender their licenses because the owner of one of the companies died and his sons do not want to continue the business while another was bought by a big company that already have an existing insurance business.
”But the rest, the owners thought that if I were to put in money now to comply with the PHP550 million (minimum capital requirement for this year) I might be compliant now but will I be able to comply until 2022, when the requirement is already at PHP1.2 billion,” he said.
”It’s not because they’re losing money. Actually it’s seldom that they go bankrupt because it’s highly regulated. There are different reasons,” he added.
Cabusao said Liberty Insurance, for one, was in the process of merging with another company but declined to explain further except that their soon-to-be partner had “submitted a notice to the IC (Insurance Commission) that they won’t be able to comply and because the owners of the company are relatives.”
He said the merger is targeted “to preserve the assets (and) to preserve the manpower.”
”It does not mean that while the insurance industry is going down in terms of number of companies, they are losing. In fact, we are strengthening because there’s more financial strength,” he added. (JSV/PNA)
