Philippine AXA Life Insurance Corp. (AXA Philippines) has acquired 100 percent of Charter Ping An Insurance Corp. (CPA) from GT Capital Holdings (GTCH) for $48.3 million (or €45 million), or P2.3 billion. The purchase signaled the entry of AXA Philippines into the nonlife-insurance market, and consolidating the life and nonlife interests of GT Capital in one entity and under AXA auspices.
AXA Philippines is now able to offer “a complete suite of protection products.” The share-purchase agreement (SPA) was executed on November 5, 2015. In a letter to Severinus Hermans, president and CEO of AXA Philippines, dated December 22, 2015, the insurance commissioner granted approval to the proposed acquisition pursuant to Section 302 of the Amended Insurance Code and CL 2014-37, dated September 5, 2014.
AXA Group was represented by AXA Asia. With this acquisition, the operations of the two insurers will remain separate, and CPA may be a wholly-owned subsidiary of AXA Philippines. Earlier, or in October 2013, GT Capital purchased 66.7 percent of Charter Ping An from First Metro Investment Corp. (FMIC) for P1.4 billion. This was followed in January 2014 by the acquisition by GT Capital of the remaining 33.3 percent of Charter Ping An for P712 million, making GT Capital the 100- percent owner of CPA.
AXA Philippines is a joint venture among the AXA Group (AXA Asia), GTCH and FMIC, a subsidiary of Metropolitan Bank & Trust Co. (Metrobank). GTCH owns 25.33 percent, while FMIC owns 28.18 percent of AXA Philippines, for total holding of 53.5 percent. AXA Group owns 45 percent, with the remaining 1.49 percent owned by minority stockholders. It is, as of 2015, the second-largest life-insurance company in the Philippines in terms of total premium income. AXA Philippines started operations in the Philippines in 1999, pioneering in bancassurance. As of 2015, AXA Philippines gross premiums amounted to P17.2 billion, a 36-percent increase from P12.6 billion the year before. Its life-insurance net income increased 31 percent year-on-year to P1.1 billion.
Charter Ping An is a nonlife-insurance company wholly-owned by GTCH. It sells fire, motor car, marine cargo, personal accident, bonds, casualty and engineering insurance. It is, as of 2015, the fourth-largest nonlife-insurance company in terms of net premiums written and premiums earned, and fifth in terms of gross premiums written (GWP). In 2014 its GWP was $73 million (€68 million). It has a 21-percent annual average growth in GWP between 2011 and 2014. Its net profit for the year 2014 was €1.8 million with gross earned premiums of €64 million.
The AXA Group, on the other hand, is, as of 2012, the No. 1 nonlife international insurance company and No. 3 international life-insurance company in Asia. It was ranked as No. 1 global insurance brand for seven consecutive years, from 2009 to 2015, by Best Global Brands. It has 103 million customers in 59 countries. It was ranked as the 20th-largest corporation by the 2015 Fortune Global 500 list. It offers life and savings, property and casualty insurance, and asset management. Forty-one percent of its pretax earnings come from its nonlife business. Speaking about its presence in the Philippines, AXA Asia Regional CEO Jean-Louis Laurent Josi stated that AXA Group’s “close partnership with GT Capital and Metrobank has enabled us to build a strong presence in this high-growth market, and this milestone will create new opportunities for further growth, as well as to help enhance the local insurance sector with a wider range of offerings.”
Metrobank is the No. 2 bank in the Philippines in terms of assets and deposits, with 938 branches nationwide, as of 2014. It has been in bancassurance partnership with AXA Philippines since 1999. The same arrangement is true with its sister company, the Philippine Savings Bank, a thrift bank. GT Capital is a listed business conglomerate of George Ty, with ownership in Toyota Motor Philippines Corp., Federal Land Inc., Metrobank, Global Business Power Corp., AXA Philippines and Charter Ping An.
A notable effect of the acquisition is the extension of its bancassurance partnership with Metrobank to cover property and casualty (P&C) insurance, as well. The acquisition also signified their confidence in the growing P&C market, which still has a low penetration rate of only 0.45 percent of GDP as of 2014.
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Atty. Dennis B. Funa is currently the deputy insurance commissioner for Legal Services of the Insurance Commission.
E-mail address: dennisfuna@yahoo.com.