MANILA - The former CEO of American International Group (AIG) and the Philippine American Life and General Insurance Co (Philam Life) are eyeing a possible tie-up in the area of non-life insurance in the country.
Rex A. Mendoza, Philam Life president and chief executive, said former AIG chief executive Maurice Raymond “Hank” Greenberg was recently in the country for exploratory talks.
Greenberg is the president, chairman and chief executive of C.V. Starr & Co. Inc. (C.V. Starr), which has been scouting for possible investments in Manila, possibly a non-life insurance firm.
Mendoza said Philam Life cannot give up its non-life unit to the Starr Group.
"It is a composite license so we will have to partner. Because the capitalization is with us so we have to comply with the capitalization requirements," Mendoza told reporters today.
"It should be a partnership between his Starr Group of Companies and us but that is a decision that is made in Hong Kong, not here," Mendoza said, adding that the tie-up makes sense because they do not have not much of a non-life operation.
He said a partnership with the Starr Group may not pose any conflict since Philam Life has already cut off ties with AIG when the Philippine insurer was absorbed by AIA Group Ltd.
AIG spun off AIA when the former was selling assets to get itself out of debt at the height of the subprime crisis of 2008-2009. Mendoza said this makes AIA "completely" out of the control of AIG, the local non-life unit of which is Chartis.
"So we're not related in any way anymore. We can partner," he aid.
On top of this, the possible partnership with the Starr Group would be seamless as Greenberg is no stranegr to Philam Life, Mendoza said.
"The Philippines is very close to his heart. He knows the people here. In fact he was telling me he was in a hotel, a lot of people took pictures with him. He knows that the Philippines is a place he is known and well respected," Mendoza said.
Given a choice between China and the Philippines, Greenberg would opt for the latter since it is the relationship, rather than finances, that matter, Mendoza said.
Eyeing National Life
Mendoza couldn't say if Philam Life is moving to acquire beleaguered National Life Insurance Co.
He, however, said Philam "is in very good position" and that it is "capable" of strategic acquisitions.
Last November, National Life faced liquidation unless it infused P100 million into the company. It needed to inject P404 million in the next four years, with the first tranche made in October 2011, but missed making the second capital infusion. To meet the government's minimum paid-up capital for insurance firms, National Life must put in P200 million in the next two years.
It has about P800-million worth of debts with BDO Unibank Inc, Philippine Business Bank, and three non-bank firms.
source: interaksyon.com