Recently, the non-life insurer SGI Philippines General Insurance Co. Inc. implanted P620 million as added capital, matching it up with industry requirement leading the schedule. SGI Philippines has increased its capital by another P620 million in December last year, taking its total paid-up capital to P1.33 billion as of end-2019.
This makes SGI Philippines compliant with P1.3 billion net worth requirement for insurers due on December 2022, three years advance of schedule. P900 million was the requirement effective on Dec. 31, 2019.
“The management of SGI Philippines has decided to go ahead and infuse capital sufficient enough to be compliant with 2022, in the year 2019 itself. This is our spirit of commitment beyond compliance,” SGI Philippines president and chief executive officer Farhat Hussain said in his speech.
For establishing business in the country, new players need to have P1 billion in paid-up capital under Republic Act 10607 or the Insurance Code.
There must be a net worth of at least P250 million by June 30, 2013, P550 million by Dec. 31, 2016, P900 million by Dec. 31, 2019, and P1.3 billion by Dec 31, 2022.
Jasmit Singh Gujral, executive vice chairman of Shriram General Insurance Co. Ltd., one of SGI’s parent companies, said ”this makes the company the number one non-life insurance player in the Philippines in terms of paid-up capital”.
Also said the infusion of capital ahead of schedule was SGI’s statement of commitment to the Philippine market. “When we were supposed to be infusing capital of P900 million, we decided, let’s not split into stages, let us show the commitment to the Philippines’ insurance industry,” Gujral told reporters in an interview. This also shows the company’s confidence in the Philippine economy, which has been growing as one of the fastest among its peers.
“It’s not that we were looking for profit on the year one or the next quarter, we were looking at the long term. The Philippines has a great economy, it’s doing among the best in the world in terms of growth rates,” the company official said.
With the infusion of additional capital, Gujral said SGI Philippines is expecting to see a 500-percent growth in its premium income annually for the next five years. “Because the current premium size that we have (now) is very small, we’ll be growing around 500 percent every year in the next five years,” he said.
Gujral said there is vast opportunity for growth in the country considering the low penetration rate of the insurance industry.
SGI Philippines is a joint venture of Shriram Group, an Indian financial services conglomerate; Piramal Group, a diversified conglomerate from India; and Sanlam Group, a financial services group in South Africa.
Aside from the non-life insurance business, Gujral said Shriram Group is also looking for opportunities to invest in finance companies, distribution channels of financial and insurance products, manufacturing firms, and startups.
News Source: Philstar
Read Full Article here: https://www.philstar.com/business/2020/01/27/1987965/sgi-philippines-hikes-capital-p133-billion