Non-life insurer Paramount General Insurance Corp. has acquired the local client base of Union Insurance Society of Canton Ltd., a wholly owned subsidiary of France’s AXA Group.

In a joint statement, the two firms said Paramount General took over last week all existing policies handled by the Philippine branch of Union Insurance.

"Effective 3rd December 2001, the general insurance business carried by the Union Insurance Society of Canton, Ltd., Philippine branch, shall be transferred to Paramount General Insurance Corp., " the two insurers said.

Business World earlier reported Paramount General’s plans to buy out the foreign insurer’s local clients. The acquisition diversifies Paramount General’s portfolio to include big corporate accounts apart from retail clients.

The two firms said all existing insurance policies issued by Union Insurance will remain valid, Paramount General will absorb and defray all of Union Insurance’s liabilities from the said policies. The two said Union Insurance will stop its insurance business in the Philippines upon full transfer of all policies to Paramount General.

"Upon completion of the transfer, Union Insurance will cease to carry on any class of insurance business," the companies said.

An industry source told BusinessWorld that Paramount General staff have started moving into Union Insurance’s local offices last week.

"It (portfolio purchase) is done. Paramount staff have actually started occupying Union’s offices here," the source said. Union’s Insurance’s Philippine branch maintains offices in Makati City, Cebu and Davao.

Paramount General ranked as the country's 21^st largest non-life insurer in terms of gross premium earnings last year, just a notch above Union Insurance. A total of 113 non-life companies operate in the country.

Paramount General earned P273 million in gross premiums in 2000 while Union Insurance reported P263 million in total premium collections.

Paramount General traces its roots to predecessor Semper Insurance Corp. which was established in May 1969 as Philippine Home Assurance Corp. Local private investors bought Philippine Home Assurance in 1993 which they named Paramount General in 1997.

Union Insurance, which handled multinational accounts, was established in Canton, China in 1835 but the firm later moved to Hong Kong. Through its underwriting agent, the company sold the earliest marine cargo insurance policy in the Philippines in 1839.

In 1904, Union Insurance opened its Philippine branch. It was acquired by British insurer Guardian Royal Exchange (GRE) in 1960. The AXA Group bought GRE in 1999 thus making Union Insurance its wholly owned subsidiary.