Lucio Tan consolidates non–life insurance business

MANILA, Philippines — Tobacco and airline magnate Lucio Tan is consolidating its interests in non-life insurance businesses by unloading the stake of Philippine National Bank in PNB General Insurers Co. Ltd. (PNBGen) to Allied Bankers Insurance Corp. (ABIC) for P1.25 billion.

The board of directors of the Tan-led PNB and PNB Holdings Corp. approved and confirmed the sale of their entire 100 percent shareholdings in PNBGen to ABIC.

PNB said in a disclosure to the Philippine Stock Exchange (PSE) the transaction is subject to regulatory and other necessary approvals.

PNBGen started its operations in 1991. It was a result of the acquisition of the Charter Insurance Co. Inc. (CICO) by PNB Holdings. The Securities and Exchange Commission (SEC) subsequently approved the change of CICO’s corporate name to PNBGen in October 1991.

PNB has a 66 percent direct stake in PNBGen, while PNB Holdings owns the remaining 34 percent. PNBGen offers fire, marine, motorcraft, fidelity and surety, as well as other kinds of non-life insurance business.

On the other hand, ABIC was founded by a group of enterprising Filipino-Chinese businessmen in May 1960 and came into being in March 1980 after the SEC approved the amendment of its 19-year charter of what was once known as the Tan-led Sincere Insurance Company Inc.

ABIC offers car, fire, personal accident, marine, engineering and casualty insurance, among others.

ABIC ranked 10th in the list of non-life insurance companies in terms of networth with P1.69 billion as of end 2019, while PNBGen was ranked 43rd with P960.63 million.

PNBGen, however, ranked sixth in terms of assets with P7.54 billion and ABIC placed 24th with P2.7 billion.

In terms of gross premiums written, PNBGen placed 10th with P2.93 billion and ABIC ranked 28th with P807.62 million.

However, ABIC ranked 10th in terms of earnings with P126.86 million and PNBGen 13th with P101.59 million.

Under Republic Act 10607 or the amended Insurance Code of the Philippines, insurance companies are required to have a paid up capital of at least P900 million by the end of 2019 to be raised to P1.3 billion by the end of 2022.

PNBGen has a paid-up capital of P912.6 million as of end 2019, while ABIC has P470 million.