The International Finance Corp. (IFC), the investment arm of the World Bank, has bought 20 percent of Paramount Life & General Insurance for P84.35 million ($1.5 million).

The new investment is part of IFC's commitment to invest at least $130 million in the Philippines. IFC's exposures in the country are in infrastructure projects, financial sector, and small and medium sized enterprises.

IFC vice president Peter Woicke said Paramount is now in position to "fortify its business operations and finance strategic acquisitions."

Paramount chief executive officer Patrick Go said the company aims to land in the Top 10 of the biggest players in the industry.

Paramount, which sells both life and non-life products, currently ranks No 15 out of 120 players and with net worth of P300 million and total assets of P1 billion as of January 2004.

Besides IFC, the other investors of the 52-year-old insurance firm are the Chu family of Cebu (10 percent) and the Tahija family of Indonesia (10 percent). The Go family holds the majority share of 60 percent.

The revitalized company aims to aggressively penetrate the insurance market to increase substantially its market share. Penetration rate in the life insurance sector, according to Go, is very low at only 10 to 11 percent to date.

However, as an impetus for players, Go is urging the government to fast-track legislation that seek to increase the capitalization of insurance companies, better mechanisms to monitor and supervise the players, and easing of the tax burden on non-life insurance which currently stands at 25 percent of the premium.