The Philippine Insurers and Reinsurers Association said the number of nonlife insurance companies will shrink to 54 from the current 63 by the end of the year, as some cannot afford to meet the paid-up capital requirement of the Insurance Commission of at least P1.3 billion by 2022.
According to Liberty Insurance Corporation Assistant Vice President for Marketing and Sales Antonio Roderick B. Cabusao, five nonlife companies are ready to throw in the towel, while four more plan to merge as a result of the expanded capital call.
“Five companies are ready to go, [and] eight companies are ready to merge. By the end of the year, it will go down to 54,” said Cabusao, who is a member of group’s public relations and education committee.
He added the closures do not mean the companies are going bankrupt, but explained they might not have the means to keep pace with the required capital build-up mandate, starting with P550 million last year. This goes up to P1.3 billion by 2022.
“It’s not because they’re losing money. Actually, it is seldom that companies go bankrupt because they are highly regulated. There are various reasons why they voluntarily surrendered their license,” he said.