PhilNaRe chairman Winston Garcia said they have received feelers from various parties, mostly multinational companies, to invest in PhilNaRe but stressed the reinsurance company is not yet in a hurry to hook up with any of these entities. "We’re holding off these negotiations because we want the company to be a dominant regional player first before taking in a strategic partner," Garcia said.
Garcia said the company may be ready to take in a strategic partner within two or three years.
PhilNaRe officials said the prospective strategic partner must have a much more advanced system in the market and must have been in service for at least 100 years.
"We’re not only looking at capital infusion but technology transfer as well," a company official said.
"PhilNaRe will soar above the achievements we have already done and the standards we have set in the past. We will gladly accept the challenge of becoming a major player in the Asian reinsurance industry. Our commitment to excellence remains unchanged. PhilNaRe is a reliable institution solidly anchored to the ground. Our vision has become wider and more encompassing as we expand our horizons," Garcia said.
He said the future of reinsurance is bright and promising because there is still room for growth. In 2005, the insurance sector had total premiums of P73.9 billion, up 6.9 percent from the previous year’s P69.2 billion.
Of this amount, P15.5 billion came from the non-life sector and P47 billion from the life insurance sector, which translate to an increase of 7.3 percent and 6.5 percent, respectively, from the year-earlier level.
To further build up its capital, PhilNaRe is undertaking an initial public offering (IPO) to raise as much as P2.9 billion in fresh capital.
With the IPO proceeds, PhilNaRe expects to increase its capacity to accept and retain premiums, allowing it to compete in the regional reinsurance market.
PhilNaRe is selling to the public a total of 638 million common shares, representing 30.7 percent of the company’s outstanding capital stock, at a price ranging from P3.36 to P4.62 each share.
The offer price is being targeted at P3.80 each share or closer to that price. The offering will run from April 16 to 20 while listing has been set on April 27.
PhilNaRe is eyeing a net income of P627 million this year or almost double the P316-million profit reported in 2006. Gross premiums are forecast to reach P5.21 billion from only P3.88 billion in 2006 while investment and other income is seen to hit P506 million from P343 million.
PhilNaRe is building its capital base to at least P5 billion from the current P3 billion as it seeks to become a regional player in the reinsurance market.
From a meager paid-up capital of P10 million and P20 million in gross written premiums in 1979, PhilNaRe has grown in a span of two decades to become the sole professional reinsurance company in the country.
Based on financial statements for 2006, PhilNaRe generated P3.78 billion of gross premiums written, total assets of P9.12 billion and total shareholders’ equity of P3.83 billion.
The principal shareholders of PhilNaRe include the Government Service Insurance System, the Ayala-led BPI Group, and the Yuchengco-owned Malayan Group.