Phinma takes over insurance unit

Phinma Corp. has sealed its P150.53-million takeover of its parent firm’s insurance unit, allowing the conglomerate to expand its portfolio as the industry continues its growth.

The Del Rosario-led company on Friday disclosed to the stock exchange that its investment was used to buy 2.3 million shares of Phinma Insurance Brokers Inc. (Pibi), representing the 100-percent stake previously held by Phinma Inc.

Pibi develops life, nonlife and health maintenance organization insurance programs.

Phinma’s takeover will add insurance services to its portfolio of education, real estate and construction ventures.

Continued growth

The takeover also comes amid continued growth in the Philippine insurance industry, whose combined net income reached P40 billion in the first nine months of 2024, up by 4.23 percent.

Total premiums jumped by 13.45 percent to P328.55 billion, data from the Insurance Commission showed.

In 2023, the industry covered around 84 million lives, representing a 16-percent increase from 72 million prepandemic.

As for Pibi, total premiums surged by 24 percent to P268 million that year. This was due to “significant increases” in premiums from medical, mortgage redemption and construction-related insurance lines.

Revenues, however, slipped by 8 percent to P58 million due to a one-time gain recognized in 2022. As a result, Pibi’s net income declined by 11.53 percent to P23 million.

Pibi also noted that high inflation in 2023 reduced clients’ disposable income available to buy insurance.

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Last year, Phinma raised P1 billion from its stock rights offering that was meant to boost capital and help the company bounce back from weak earnings.

Phinma’s net profit last January to September plunged by 84.5 percent to P122.73 million on lower selling prices and higher costs. Revenues inched up by 9.7 percent to P17 billion.

Still, Phinma chair and CEO Ramon del Rosario Jr. said they were seeing a “gradual improvement” in their figures as they expected returns from investments, particularly through Phinma Education Holdings Inc.

In October 2024, private equity firm KKR completed an initial investment of P2.52 billion into Phinma Education to bankroll the latter’s improvement programs.

The initial remittance represented 70.22 percent of KKR’s P3.59-billion total investment to buy new shares.