PNB putting in P300 M more to insurance unit

MANILA, Philippines — Philippine National Bank (PNB) is injecting up to P300 million to PNB General Insurers Co. Inc. as the group of tobacco and airline magnate Lucio Tan continues to consolidate its insurance business.

PNB said its board of directors approved the infusion of the contingency surplus to PNB Gen during a meeting held last Thursday.

Last April, the Tan empire announced the consolidation of its non-life insurance businesses through a share-swap agreement between PNB Gen and Allied Bankers Insurance Corp. (ABIC).

The agreement involves the exchange of six million common shares of PNB Gen for 178.89 million common shares of ABIC. Upon completion of the transaction, PNB’s stake in ABIC would increase to 22.7 percent from the current four percent.

The transaction is in line with the objective to synergize and combine the business operations of PNB Gen and ABIC.

PNB’s wholly-owned PNB Holdings Corp. is the vehicle used by the bank to engage in the insurance business.

PNB Holdings has a 34.25 percent stake in PNB Gen – a non-life insurance company that offers coverage for fire and allied perils, marine, motor car, aviation, surety, engineering, accident insurance and other specialized lines.

Total assets of PNB Gen reached P7.6 billion, with a total net worth of P915.9 million last year. Its net income went up by 4.5 percent to P69.5 million last year from P66.5 million in 2016.

PNB Gen’s paid-up capital reached P912.6 million, one of the highest in the industry, from an initial paid-up capital of P13 million when it started operations.

Its capital management framework is aligned with the statutory requirements imposed by the Insurance Commission (IC).

Under the requirements of the IC and the Insurance Code, PNB Gen should meet the minimum levels of minimum statutory net worth of P900 million by Dec. 31, 2019 and P1.3 billion by Dec. 31, 2022.

ABIC, formerly the Sincere Insurance Co. Inc. was incorporated in 1960 and was acquired by the Lucio Tan Group of Companies in 1980.

In December 2015, PNB entered into an agreement selling its 51 percent stake in PNB Life Insurance Inc. to Allianz SE and the partnership was sealed with the establishment of Allianz PNB Life Insurance Inc.