International Finance Corp. (IFC), the World Bank's private sector investment arm, has invested a total of $1.5 million in Filipino-owned Paramount Life and General Insurance Co.

Peter Woicke, IFC's executive vice-president, said the investment - equivalent to a 20% stake in Paramount - would enable the insurer to become a major player in the local insurance industry.

Paramount is a Filipino-owned insurance company, engaged in both life and nonlife insurance businesses. Its principal shareholders include the Go family, the Chu family from Cebu and the Tahija family from Indonesia.

Patrick L. Go, Paramount's chief executive officer, said IFC's investment would position the company among the country's top 10 insurance corporations.

"The partnership with IFC will help us in consolidation. We would become bigger and hopefully, hit the top 10," he told reporters yesterday.

Mr Go said that although the company is not entirely focused on its ranking in the industry, it is working to improving its place, currently at the 12th spot among 120 insurance companies in the country.

"The IFC partnership will provide critical support for our company to distinguish itself and to further strengthen our financial resources to continue its path of combined internal and external growth," he said.

Mr. Go said the local insurance industry still needs a lot of support both from government and private sector, in terms of capitalization.

"Essentially, what is needed is to strengthen the industry by increasing capitalization and by better monitoring what each company is doing," he said.

At present, the company has 27 branches in Metro Manila. It has focused its business principally on personal lines and on small-medium enterprises in the provinces.

Paramount's net worth stands at P300 million with assets at over P1 billion, latest company data showed. The gross premiums written for its general business stand at P515 million.

IFC, for its part, has been investing in the Philippines the past 40 years mostly to help spur private sector development in the country.

In its fiscal year that ended June 2004, IFC committed $90 million in loans and equity to five investment projects. These investments included infrastructure projects in the power, water and telecommunications sectors.

Aside from helping the local insurance industry, IFC is also assisting in the development of the domestic capital market by providing a third-party assessment and analysis of the bourse's current situation.

Vipul Bhagat, IFC country manager for the Philippines, said IFC hoped to increase its investments in the country in coming years, but this would depend on government efforts to improve the business environment.