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| Extracted
from the Business World issue of September 17, 2002... |
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| Paramount
buys Dutch insurer's local business |
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| Local nonlife insurer
Paramount General Insurance Corp. is putting up a life insurance
unit following reports it has bought the local business of Dutch
insurer Aegon N. V., industry source said... |
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| In an interview
yesterday, Insurance Commission (IC) chief Eduardo T. Malinis
confirmed reports Paramount is planning to become a composite
company by diversifying into the life insurance business. |
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| "Paramount
will put a life company. They will put up their own. They will
now apply for a composite license", Mr. Malinis told Business
World. |
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| Should it become
a composite company, the insurer will become Paramount Life
and General Insurance Co., Mr. Malinis said. |
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| In a separate interview,
IC deputy commissioner Vida T. Chiong said Paramount will undergo
a tedious process to get a composite license. |
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| "Paramount
will be subjected to pre-licensing. They will be examined as
to their readiness to conduct life insurance business. Before
licensing, there is pre-licensing. First and foremost, they
should be able to comply with the minimum capital requirements,
security deposits, books of accounts, reinsurance treaties,
among others," Ms. Chiong said. |
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| Meanwhile, industry
sources said Paramount has bought the local portfolio of Aegon
but will be letting go of the latter's work force. |
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| "Paramount
bought the portfolio of Aegon. Paramount will take over. In
the meantime, Aegon is still there. They still have a skeletal
force servicing the policies, "an industry source said. |
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| "Aegon has
operations in other Asian countries. Maybe, they are consolidating
(and staying) where business is picking up. It is a business
decision. If Aegon is not making anything here, why stay?"
the source added. |
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| A Business World
source at Aegon also said employees were informed last Friday
that the company's Dutch owners have finalized a deal to sell
their local business to Paramount. |
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| The source added
they will not be absorbed by the company's new owner, and are
given until the end of next month to transfer local operations
to Paramount. |
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| However, Mr.Malinis
said his office has not yet been informed of such deal. |
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| Paramount traces
its roots to Philippine Home Assurance Corp. in May 1969. Local
private investors bought Philippine Home Assurance in 1993 and
renamed it Semper Insurance Corp. The investors renamed the
company to Paramount General Insurance Corp. in 1997. |
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| Aegon, one of the
world's largest insurers, specializes in life and pension insurance.
It secured its operating license from the IC in 1996 and started
business in April 1998. |
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| IC data show Paramount
posted P362.06 million in gross premiums in 2001, a 33% growth
from the P272.60 million it reported the previous year. |
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| Paramount |
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| Preliminary IC data
shows Paramount is among the top 20 dominant nonlife insurers
in terms of gross premiums in 2001. |
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| The local subsidiary
of Aegon posted 62.2% increase in premium income last year to
P53.17 million from P32.78 million. |
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| Aegon has improved
its standing in 2001 to 31st from 33rd in terms of premium income
the previous year. |
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| Aegon is an acronym
for the names of five insurers: Algemeene Friesche, Eerste Nederlandsche,
Groot-Noordhollandsche, Oliveh and Nillmij. |
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| If its planned pullout
proceeds, Aegon Philippines will be the second foreign insurer
to withdraw from the country this year after New York-based
Metlife Insurance Co. of the Philippines. Metlife's closure
has left the country with a total of 39 life insurers. Of this
number, 16 are partly or wholly owned by foreign companies. |
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