International Finance Corp., the World Bank's private investment arm, has ventured into the Philippine insurance sector for the first time with the acquisition of a 20-percent stake in Paramount Life & General Insurance Corp.

The buy-in is seen to catapult PLGIC into an industry catalyst, by continuing to be a "consolidator" that seizes opportunities in the current global downturn to acquire the local operations of foreign players retreating from the Philippine market as well as other domestic companies, PLGIC president and majority stockholder Patrick Go said in a press briefing yesterday.

IFC will be initially investing $1.5 million in PLGIC, which had an annual sales turnover of about half a billion pesos and ranks 15 out of 120 Philippine insurers.

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

Go said that with the financial muscle from IFC, PLGIC hoped to become among the country's top 10 leading insurers over the medium term.

But he noted that industry ranking was not the company's main concern. Instead, he said the foremost aim was to be the lowest cost provider of insurance products in the country.

IFC executive vice president Peter Woicke, who was in Manila for the signing, said the company picked PLGIC to invest in because it was a "well managed" domestic insurance company.

"Through this investment, IFC will help Paramount expand and fortify its business operations as well as allow it to finance strategic acquisitions," Woicke said.

"It will support the government's efforts to promote healthy industry consolidation to the benefit of consumers, " he said.

In 2001, PLGIC acquired the Philippine operations of Union Insurance Society of Canton Ltd. from AXA of France, strengthening its position in the local industry.

Aside from the Go family, which owns 60 percent of PLGIC, other equity partners are the Chu family of Cebu and the Tahija family of Indonesia.

PLGIC, now with a net worth o P300 million and assets f more than P1 billion, was founded in 1950 by patriarch Daniel Go. It has 27 branch offices across the country.

The insurer focuses its business principally on personal lines and on small and medium enterprises outside the country's major urban centers.

For its part, IFC has been promoting private sector development in the Philippines for more than 40 years. In its fiscal year that ended in June, it has committed $90 million in loans and equity to five investments here.

The WB's investment arm has invested in other areas of the Philippine financial sector.