MANILA, Philippines - Hong Kong-based Pacific Century Group is setting up shop in the Philippines, months after acquiring the Thailand, Macau and Hong Kong insurance businesses of ING worth $2.14 billion.
Pacific Century, owned by Richard Li, will be putting up a life insurance business in the Philippines with an initial capital of P1 billion.
Industry sources said that the conglomerate would rather spend the minimum capital requirement for a new life insurance license, rather than acquire an existing local player for the minimum capitalization of P250 million.
The same sources said the conglomerate has the resources to get some of the best insurance minds and skills, as well as introduce its own expertise and manpower to immediately make an impact on the market.
“But make no mistake, the Philippines is just one of the many markets in the region including Southeast Asia that the Pacific Century Group is interested in,†the sources said.
It is also holding talks with ING in a bid to acquire the existing Japanese business of the Dutch insurer, after it lost out to AIA for the latter’s Malaysian unit.
“The common belief is that Pacific Century is even more serious in setting up shop in Indonesia and Vietnam, which offers more opportunity in terms of growth rates rather than the Philippines,†sources said.
But the Philippines, being one of the least mature albeit vastly untapped market, offers more opportunities for growth.
Li has major investments in Hong Kong’s property, financial services and telecommunications sectors. He is the son of Hong Kong’s richest man Li Ka-shing.
Recently, the American International Group (AIG) acquired a license to operate a non-life (property and casualty) insurance firm in the Philippines.
Meanwhile, Meiji Yasuda Life Insurance Co., Dai-ichi Life Insurance Co. and Sumitomo Life Insurance Co. have been “sizing up the Philippine insurance market.â€
The three are among the 10 biggest insurers in Japan, and like their counterparts in the banking sector, are taking an aggressive stance in Southeast Asia.
Meiji Yasuda Life recently acquired a 15-percent stake in Thai Life Insurance Co. for $700 million. It is reportedly setting its sights toward Indonesia and Vietnam.
Prudential UK controls 50 percent of Indonesian’s life insurance market, prompting the Japanese insurer to set emissaries to look for possible entry into Indonesia.
Japanese insurers recently spent $6.6 billion in a number of mergers and acquisitions in Southeast Asia, mostly in mature markets of Thailand and Malaysia.