Hong Kong-based insurer FWD Group invests P1.3B in PHL

Hong Kong-based insurance company FWD Group has invested P1.3 billion in the Philippines, making it the first foreign firm 10 years to get a license to operate after amendments were made to the Insurance Code. 

 

Apart from the amended insurance code, the growing Philippine population and working class in an environment of low penetration rate helped FWD Group to make a business decision regarding the Philippines, officials said at a press briefing Tuesday.

 

"Prospects of the PHL as a country and as an economy were quite attractive, going forward, not just because it is part of the Asian growth story but also because... looking at the rising number of the middle class, education and youthfulness of this country," FWD Group chairman Ronald Arculli said.

 

"Change in government structure and regulatory reforms were some of the factors that  prompted us to put our market up," he added.

 

In the next five years, the company is targeting a slot in the Top 5 insurance companies in the Philippines, Arculli said.

 

On August 15, President Benigno Aquino III has signed into law Republic Act 10607 or "An Act Strengthening the Insurance Industry Further Amending Presidential Decree No. 612 Otherwise Known as the Insurance Code as Amended by Presidential Decree Nos. 1141, 1280, 1455, 1460, 1814, and 1981 and Batas Pambansa Bilang 874 and for Other Purposes."

 

Among the key amendments to the Insurance Code are higher capitalization for insurers, a fixed-term of six years for the Insurance Commissioner and provisions for new products, like microinsurance and bancassurance.

 

The Insurance Code or Republic Act 2427 was enacted on December 18, 1974, creating the Insurance Commission to regulate the life and non-life insurance sectors.

 

The FWD has so far put in P1.3 billion to cover the required capital and working capital, FWD Group CEO Huynh Thanh Phong said in the same briefing.

 

"FWD is investing heavily in technology to support the delivery of our products and customer servicing, including continuing the roll out of the innovative paperless sales platform that FWD Life Indonesia pioneered earlier this year," he said.

 

Under the amended Insurance Code, the capital requirement was raised to P1 billion and  additional costs of P100 million.

 

Having been granted license this month, FWD Group chief partnership distribution officer Peter Grimes said the company will be launched in the second half of the year.

 

"We're now rapidly expanding our team and we're now focusing on the management team. At the end of the year, we aim to have 100 staff," he said.

 

"Hopefully, we make them operational by the third quarter of this year," Grimes added.

 

FWD Group is the insurance business arm of the private investment group Pacific Century Group. It offers life and general insurance in Hong Kong, Macau and Thailand, and has a brand presence in Indonesia. – VS, GMA News