Sun Life, a global insurer from Canada, is seeking to find new opportunities for acquisitions.
The Canadian large global insurer, Sun Life, is currently on the prowl to make more changes to its position in the insurance industry, as it seeks out new acquisition opportunities within the Philippines marketplace.
The insurer has also been spotted looking for some new consolidations within the local environment.
The president of Sun Life Financial Philippines, Riza Mantaring, stated that the Insurance Commission’s new and higher minimum capital requirements which will be P1 billion by 2020 will probably cause a number of players in the insurance industry to consolidate. Mantaring explained that “Some will probably decide to consolidate instead of infusing additional capital”.
The new capital requirement for the insurance industry was to become effective in 2016 but was pushed back.
Instead, the insurance industry was given an additional four years in which to prepare, when the date was changed to 2020. There has been vehement opposition from the Association of Life Insurers in the country ever since the capital hike mandate was first proposed. Mantaring added that “The insurance business is really long term. You have to have deep pockets because in the initial years, the more you sell the more you lose. You have to have big capital.”
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She also explained that Sun Life Financial Philippines was “definitely” looking for possible acquisition opportunities. That insurer is currently leading the country’s insurance industry in terms of premiums (based on 2011 figures, which are the most recent complete year). Mantaring knows that it is important for proper assessments to be performed for any potential acquisition. They aren’t looking to “acquire for the sake of acquiring”, but instead, it needs to make good sense for the company.
Sun Life Financial Philippines (SLFP) acquired a 49 percent stake in Grepa Financial from Yuchengcos, in 2011. This provided the Canadian company with a management control over Grepa and set the bank-assurance partnership between Rizal Commercial Banking Corp. and SLFP-Grepa in motion. Any additional acquisition that is made by the company would need to be considered in terms its potential for improving on the alternative opportunity to use the same funds for generating organic growth.