SEC approves capital hike of National Reinsurance to P3B

The Securities and Exchange Commission (SEC) has approved the increase in capital stock of National Reinsurance Corp. of the Philippines from P1 billion to P3 billion, paving the way for its merger with Universal Malayan Reinsurance Corp. (UMRE).

Of the increase in capitalization, P1.59 billion has been subscribed and paid.

SEC documents show that National Reinsurance will be the surviving entity with an asset base of P5.5 billion upon completion of the merger.

According to National Reinsurance, the merger is expected to bring about a bigger, stronger and more competitive reinsurance entity, at par with other reinsurance firms in Southeast Asia.

The merger also provides the opportunity to realize significant cost synergies and overall efficiency.

National Reinsurance is jointly owned by the Armed Forces of the Philippines General Insurance Corp., Liberty Insurance Corp., Philam Insurance Corp., Fortune Guarantee Corp. and the Government Service Insurance System as the largest single shareholder.

UMRE, on the other hand, is the surviving entity of an earlier merger between Universal Reinsurance Corp. and Malayan Reinsurance Corp., a joint venture between BPI and the Malayan Group of Insurance Companies.

National Reinsurance was formed in 1978 by virtue of Presidential Decree 1270 as a domestic professional reinsurance firm to provide life and non-life reinsurance capacity to the Philippine and neighboring insurance markets. Its first full year of operations was in 1979 when it generated gross premium of just around P20 million and had a paid-up capital of less then P10 million.

It has grown dramatically since then to become the leading professional reinsurance company in the Philippines.

In 2004, it booked gross premium of P2 billion and its paid-up capital reached P1 billion as of end-June the same year.