US giant enters Phl non-life insurance market

MANILA, Philippines - Hong Kong-based Starr International Insurance (Asia) Ltd. has entered the Philippine non-life insurance market, an affirmation of its positive outlook on the country’s economic growth.

The firm is part of Starr International Co. Inc., one of the world’s leading private insurance holding companies.

Starr Insurance Holdings chairman and chief executive officer Maurice “Hank” R. Greenberg said the Philippines is now attracting foreign investments due to favorable policies laid out by the Aquino administration.

 â€œThe Philippines is a growing country which is attracting more foreign investments which will need a lot of insurance, and Starr will participate in that growth,” he said in a press briefing yesterday.

The Philippine economy has received three credit ratings upgrade to investment status, which opens the floodgates for foreign investments. It has been tagged as “the sweet spot”, and its gross domestic product (GDP) last quarter outgrew China, the second largest economy in the world.

Starr International will concentrate on commercial insurance for such sectors as power, oil exploration and distribution, mining and mining-related activities, port operations and other port-related passenger and cargo activities, utilities, real estate, airport and airport-related activities.

It will also offer risk management and risk management engineering, safety loss controls, and claims.

It is also in a position to support the onshore re-insurance business, while looking into offering health-related protection services.

Onshore re-insurance is popular in the Philippines as it offers lower risk premiums than foreign re-insurers. The entry of huge foreign players in the Philippine market further enhances the protection business for insurers.

Last May, Starr International received its certificate of authority (CA) from the Securities and Exchange Commission to operate as a non-life insurance company with a minimum paid-up capital of P1 billion.

It is the second major global insurance player that recently penetrated the country’s non-life insurance industry.

The American International Group (AIG) returned to the Philippines via the backdoor or a buyout of Chartis Philippine Inc. It is now known as AIG Philippine Insurance Co. with gross premium income of P2.9 billion, fifth best among the 75 non-life insurance firms.

Incidentally, it was, Starr International that established AIG, with Greenberg at the helm. One of the many Asian footprints of AIG was Philippine American Life and General Insurance Co. (Philam Life).

After the 2007 global financial crisis, AIG was forced to give up its Philippine operations and Greenberg stepped down as chief executive. Philam Life is now under the AIA Group, a former regional partner of AIG.