AIG to Unload Philamlife

Insolvent American International Group, Inc. (AIG) the parent company of Philippine American Life Insurance Company (Philamlife), announced it will be selling its global assets, including Philamlife, to repay the $85 million lifeline extended by the U.S. government. This was revealed by Philamlife president Jose Cuisia himself. Potential buyers of Philamlife stand to acquire the undisputed market leader in life insurance and a dominant national brand. Per Cuisia, Philamlife is the “crown jewel” of AIG’s operations in Asia, with P170 billion in assets and a net worth of P49.5 billion. Few suitors have made their intentions clear at this early stage, except for the Yuchengco group, which, it is widely perceived, would need to find a partner or partners to be able to take over Philamlife. Yuchengo group officials declined to comment on the progress of reported talks on its proposed purchase of Philamlife. About 10 other local and foreign entities have expressed interest in acquiring all or parts of the group, including some of the biggest names in the Philippine business scene.

Mr. Cuisia stressed to policy holders and the general public that Philamlife has “strong capital base and we have always maintained a very conservative investment policy” and that “AIG’s divestment decision is not a reflection of their subsidiaries’ business or historical performance.” He’s right, of course. Philamlife is solid as a rock, which explains why its imminent sale is creating such a buzz.

According to BusinessWorld, AIG has three criteria as to who are the potential bidders. One, it has to be a strong reputable brand name. Two, it has to be an institution that’s strong financially. And three, it has to have a strategic fit as far as in providing policyholders and stakeholders the growth potential.

“Some will immediately be crossed out,” Mr. Cuisia said, referring to the interested buyers, as he pointed out that not all would be able to meet AIG’s criteria.

Rumors have it that former Central Bank governor Cuisia is quietly putting together a consortium to bid for Philamlife. He’s certainly in a position to pull it off, although he will need to tread very carefully to avoid any perception of self-dealing or conflict of interest. At the very least, he presumably has the ears of the American owners and can influence the course and outcome of any deal.

2 thoughts on “AIG to Unload Philamlife”

  1. For all of Philamlife’s policyholders, here is the official statement of the company regarding the issues it is facing right now.



    AIG to refocus on Worldwide Property and Casualty; Philamlife assures policyowners and partners

    MAKATI CITY, October 4, 2008 – AIG announced today it will refocus the company on its core property and casualty insurance business to repay its loan from the Federal Reserve Bank of New York. AIG further announced its intention to sell a range of companies and assets. The Philippine American Life Insurance Company has been identified for possible divestment along with some of Philamlife’s affiliates.

    Philamlife is the largest and most profitable insurance company in the country and the undisputed market leader for over sixty years.

    Independently, Philamlife is a strong business with a solid future. It is well capitalized with the strongest balance sheet in the life insurance industry. As of December 31, 2007, Philamlife has consolidated assets of P170 billion and consolidated stockholders’ equity of P49.5 billion. In 2007, revenues amounted to P36.7 billion reflecting a 14% growth while New Business from Life Insurance Operations of P7.4 billion was higher by 57.6% versus the previous year. Benefits payments totaled P6.6 billion. The bulk of the company’s invested assets are concentrated in marketable Philippine government securities, corporate bonds and blue chip equities.

    In a statement, Philamlife President and CEO Jose L. Cuisia Jr., said that “Philamlife remains to be a stable and strongly capitalized organization. Our policyowners and clients can be assured that their interests are protected because of the company’s financial strength. A change of ownership will not in anyway diminish policyowners’ benefits and security. We will remain focused on daily execution of our business and continue to provide our policyowners and clients with the highest levels of service.”

    AIG’s divestment decision is not a reflection of their subsidiaries’ business or historical performance. AIG’s subsidiaries in the Philippines remain financially strong, and comply with local regulatory capital requirements.

    Philamlife and its affiliates provide a full range of financial services and are leaders in their respective industries. Given their vast resources, Philamlife and its affiliates are capable of meeting obligations to their clients and providing them with quality service.

    # # #

    The Philippine American Life and General Insurance Company is the largest and most diversified insurance company in the Philippines and the undisputed market leader for over half a century. It offers the most comprehensive range of life and general insurance products that provide protection, savings and investments, education, accident and health, property and casualty coverage. Philamlife has more than a million individual and corporate policyholders, and maintains the most extensive network of offices and sales agencies nationwide.

    Philamlife’s affiliate businesses include a wide range of diversified financial services in pre-need plans, bancassurance, healthcare, banking, credit cards, asset management, property and casualty insurance, property management and development, and business process outsourcing.

    Philamlife OFW Market
    UN Ave., Ermita, Manila

  2. Sorry for the off – topic but I just need to vent: I recently got a billing notice from Philam Life for an insurance policy that I did not apply for nor authorize anyone to apply in my behalf. What gets my beef is that the insurance policy had all my personal details right! WTF!!!

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