MANILA, Philippines - The Philippine American Life and General Insurance Co. (Philam Life) has stepped up its bid to acquire a health maintenance organization (HMO) to complete its menu of protection and savings services.
It is also interested in acquiring UCPB Life Assurance Co. (Cocolife) when it is placed in the auction block by government.
Philam Life is one of the leading life insurance companies and it wants to compliment the various health insurance products it has, and will continue, to introduce to the market.
The Philam Life group is composed of companies in the life and non-life insurance business, property development, mutual funds, and bancassurance.
Meanwhile, top officials said that they are in earnest talks with two of the leading HMOs while exploratory talks have commenced with three others.
The first two HMOs that are in “earnest talks†are extremely receptive with the opening equity exposure to the life insurer.
However, the issue of majority ownership remains to be resolved.
Philam Life officials said that their health insurance products which focuses on critical illness compliments the general medical coverage of HMOs, which places limits to the amount of coverage.
HMO offers lower premiums but covers less critical illness thus lower protection coverage.
“Philam Life health insurance focuses on critical illnesses that require larger amounts of financial protection. The two compliment each other services,†they said.
A combination of hospital, clinic and other medical services presently offered separately by the insurer and an HMO would reduce operational costs, which could result in lower premium costs.
“It completes that level of protection and savings for the insuring public, a wholistic approach to health protection,†one official said. Philam Life wants to come out with a more comprehensive set of services for individuals, employees, employers, and corporates.
“We are not yet complete in employee benefits. Right now, health is just a rider on the life (insurance) side,†he lamented.
While the first preference is acquisition, Philam Life is open to owning majority stake in an HMO. It is also prepared to look into forming strategic alliances with several practitionaires.
Prior to the Lehman financial fiasco, the Philam Life group operated a pre-need company and an HMO.
It eventually sold Philam Plans (now PhilPlans) and Philam Care (now PhilCare) to the STI Investment Inc.
Both financial entities were leaders in their respective sectors.
Interestingly, the HMO industry has approached the national government seeking its regulatory transfer from the Department of Health (DOH) to the Insurance Commission (IC).
However, it will require legislation or an amendment to the existing law forming the HMO industry.
Last year, Philam Life registered a 31-percent increase in gross premiums, or from P15.5 billion in 2012 to P20.1 billion last year.
New business or first year premiums reached P11.8 billion, roughly 62 percent better than the previous year.