Mapfre Asia acquiring Insular General

Mapfre Asian Insurance Corp. is reportedly acquiring a majority stake in Insular General Insurance Co. Inc. (i-Gen), the non-life insurance subsidiary of the Insular Life Assurance Corp.

Foreign insurer Mapfre Asian Insurance is a holder of a composite insurance license to operate as both life and non-life insurance company.

However, industry sources said that negotiations were still ongoing as officials of Insular Life is mulling selling its non-life subsidiary lock-stock-and-barrel.

"That would allow the company to stick to its core competence which is in the life insurance sector," they said.

Insular Life is presently the third largest life insurer behind Philippine American Life and General Insurance Co. (Philamlife) and Sun Life of Canada. Years back, Insular Life was second only behind perreniel leader Philamlife.

Mapfre Asia Insurance meanwhile remains among the strong players in the non-life sector ranking among the top 20 in the past three years. Meanwhile, i-Gen reported gross premiums worth a measly P211.5 million in 2003.

The number of non-life players has been shrinking over the years while the foreign players in the same industry has slowly been taking root.

It is an industry that requires high levels of liquidity to meet claims in areas such as auto insurance, fire, and marine. But it is also burdened by an anemic economy and a tax environment that accounts for roughly 25 percent of premiums paid.

The Insurance Commission meanwhile will be increasing the minimum paid-up capital in a bid to consolidate the sector to just a few efficient, highly liquid and professional players, both domestic and foreign players.

"That is probably the reason Insular Life decided to reduce its exposure or altogether sell its non-life subsidiary," sources said.

Insular Life will however hold on to its health maintenance organization, Insular Life Health Care Inc. (i-Care) and Insular Investment and Trust Corp.

i-Care is accredited with 373 hospitals, medical clinics, dental clinics and laboratories all over the country, and over 4,570 medical specialists in its roster. It maintains a fully-equipped clinic and a mobile clinic.

Insular Investment offers services in the areas of corporate finance, money market, and trust and investment management.