Posted at 09/04/2009 1:02 PM | Updated as of 09/06/2009 3:47 AM
MANILA - Local financial services firm Philippine American Life and
General Life Insurance Co. (Philamlife) has sold its stakes in its
pre-need and healthcare units as part of its continuing efforts to focus
on its core businesses.
According to Philamlife, Filipino-owned firms Systems Technology Institute Inc. (STI) and Philippines First Insurance Co. Inc. (PhilFirst) are set to acquire Philam Plans and PhilamCare through a share-sale agreement.
Both deals are still subject to regulatory approvals. Deutsche Bank was the sole adviser in both transactions.
The announcement did not include the terms of the deals.
This is the second set of deals that Philamlife, a leader in the local life insurance industry, has announced since its fate as a subsidiary of American Insurance Group (AIG), the world's largest corporate mess, has turned.
Philamlife was put on the auction bloc last year to help pay for AIG's massive loans. It was eventually spared after the global strategy changed into pooling Philamlife with other Asian assets of AIG under American International Assurance Co Ltd (AIA).
With the sale of its pre-need and healthcare units, and previously its thrift banking arm and leasing unit, Philamlife is now focused on its diversified insurance and investment businesses.
Philamlife has beefed up its insurance business by expanding its distribution network through a 51% recently acquired stake in Ayala Ayala Life Assurance. The 2 now have a bancassurance partnership.
Synergies
The sale of Philam Plans to the STI group creates a new twist to the usual business model of pre-need firms. Usually, a pre-need firm is part of a portfolio of products of a financial or property conglomerate.
For years, the pre-need industry has been hit by bankruptcies and legal troubles as some firms, including the industry's key players, failed to meet their financial obligations to clients.
The pre-need woes have snowballed into lesser sales in the insurance industry, which is erroneously considered to be in the same business as pre-need.
Philam Plans, however, is one of the 22 surviving pre-need firms. It said in its website that it has a liquid trust fund of P29 billion. It is now the leader in the pre-need industry
It has over 300,000 plans in force, according to its website. Of these, educational plans are its key product.
With the sale of Philam Plans to STI, a synergy is formed.
STI, an eductional institution, could now effectively integrate financing, through educational pre-need plans in its product portfolio.
"While other pre-need plan firms rely on third-party schools for the provision of education, STI provides the education services itself. It can also increase Philam Plans's product portfolio by accessing STI's network of education services," STI Executive Committee Chairman Eusebio Tanco said.
At present, STI operates a network of 95 tertiary schools which offer information technology, engineering, healthcare, business administration, and hotel management courses.
Health care
The sale of PhilamCare is also seen as a good fit for the 2 Filipino-owned firms, given STI's presence in the health care business.
PhilamCare is one of the country's leading health maintenance organizations, offering healthcare products and services to about 160,000 cardholders.
A couple of years ago STI, which started as a school focused on Information Technology, has branched out into offering courses in the medical services field.
STI, through affiliates, also operates the De Los Santos-STI (DLS-STI) MegaClinic in Mandaluyong city, the DLS-STI Medical Center in Quezon city, and the DLS-STI College of Health Professions. The education service provider also manages the Dr. Fe del Mundo Medical Center.
"We believe STI can further enhance PhilamCare's growth since we are in the process of developing our network of health care professionals and affiliated hospitals and clinics nationwide," STI President and Chief Executive Officer Monico Jacob said.
For his part, Philamlife Vice Chairman Jose Cuisia said: "The divestment of PhilamCare is part of our strategy to focus on our core life insurance and wealth management operations, as we move towards becoming part of the AIA Group."
STI group
The STI group was founded in 1983 by 4 enterprising friends: Augusto C. Lagman, Herman T. Gamboa, Benjamin A. Santos and Edgar H. Sarte. Starting with just 2 schools in the 1980's, then called Systems Technology Institute was addressing the increasing demand for computer professionals. At the time, the information technology (IT) was just booming.
Twenty five years after, STI has grown to more than 100 campuses here and abroad. It has also expanded its network to provide education at the basic, secondary, and tertiary levels. It has one of the largest networks of nursing colleges in the Philippines.
The STI group is now led by individuals well-known in the business industry. On the board are Eusebio Tanco (a stockbroker, investment banker, insurer, property developer and educator) and Monico Jacob (former head of National Housing Authority, Pag-IBIG Fund, Petron Corp, and Philippine National Oil Company)
STI's portfolio includes an overseas recruitment and staffing agency, Global Resource for Outsourced Workers, Inc. (GROW), a stake in Bank of Commerce, and in Philippine Insurance Co. (PhilFirst).
One of the parties in the transaction with the Philamlife Group, PhilFirst is a provider of non-life insurance coverage to individuals and corporations. It is said to be the first domestic non-life insurance company, founded way back in 1906.
http://bit.ly/tgFQUq
According to Philamlife, Filipino-owned firms Systems Technology Institute Inc. (STI) and Philippines First Insurance Co. Inc. (PhilFirst) are set to acquire Philam Plans and PhilamCare through a share-sale agreement.
Both deals are still subject to regulatory approvals. Deutsche Bank was the sole adviser in both transactions.
The announcement did not include the terms of the deals.
This is the second set of deals that Philamlife, a leader in the local life insurance industry, has announced since its fate as a subsidiary of American Insurance Group (AIG), the world's largest corporate mess, has turned.
Philamlife was put on the auction bloc last year to help pay for AIG's massive loans. It was eventually spared after the global strategy changed into pooling Philamlife with other Asian assets of AIG under American International Assurance Co Ltd (AIA).
With the sale of its pre-need and healthcare units, and previously its thrift banking arm and leasing unit, Philamlife is now focused on its diversified insurance and investment businesses.
Philamlife has beefed up its insurance business by expanding its distribution network through a 51% recently acquired stake in Ayala Ayala Life Assurance. The 2 now have a bancassurance partnership.
Synergies
The sale of Philam Plans to the STI group creates a new twist to the usual business model of pre-need firms. Usually, a pre-need firm is part of a portfolio of products of a financial or property conglomerate.
For years, the pre-need industry has been hit by bankruptcies and legal troubles as some firms, including the industry's key players, failed to meet their financial obligations to clients.
The pre-need woes have snowballed into lesser sales in the insurance industry, which is erroneously considered to be in the same business as pre-need.
Philam Plans, however, is one of the 22 surviving pre-need firms. It said in its website that it has a liquid trust fund of P29 billion. It is now the leader in the pre-need industry
It has over 300,000 plans in force, according to its website. Of these, educational plans are its key product.
With the sale of Philam Plans to STI, a synergy is formed.
STI, an eductional institution, could now effectively integrate financing, through educational pre-need plans in its product portfolio.
"While other pre-need plan firms rely on third-party schools for the provision of education, STI provides the education services itself. It can also increase Philam Plans's product portfolio by accessing STI's network of education services," STI Executive Committee Chairman Eusebio Tanco said.
At present, STI operates a network of 95 tertiary schools which offer information technology, engineering, healthcare, business administration, and hotel management courses.
Health care
The sale of PhilamCare is also seen as a good fit for the 2 Filipino-owned firms, given STI's presence in the health care business.
PhilamCare is one of the country's leading health maintenance organizations, offering healthcare products and services to about 160,000 cardholders.
A couple of years ago STI, which started as a school focused on Information Technology, has branched out into offering courses in the medical services field.
STI, through affiliates, also operates the De Los Santos-STI (DLS-STI) MegaClinic in Mandaluyong city, the DLS-STI Medical Center in Quezon city, and the DLS-STI College of Health Professions. The education service provider also manages the Dr. Fe del Mundo Medical Center.
"We believe STI can further enhance PhilamCare's growth since we are in the process of developing our network of health care professionals and affiliated hospitals and clinics nationwide," STI President and Chief Executive Officer Monico Jacob said.
For his part, Philamlife Vice Chairman Jose Cuisia said: "The divestment of PhilamCare is part of our strategy to focus on our core life insurance and wealth management operations, as we move towards becoming part of the AIA Group."
STI group
The STI group was founded in 1983 by 4 enterprising friends: Augusto C. Lagman, Herman T. Gamboa, Benjamin A. Santos and Edgar H. Sarte. Starting with just 2 schools in the 1980's, then called Systems Technology Institute was addressing the increasing demand for computer professionals. At the time, the information technology (IT) was just booming.
Twenty five years after, STI has grown to more than 100 campuses here and abroad. It has also expanded its network to provide education at the basic, secondary, and tertiary levels. It has one of the largest networks of nursing colleges in the Philippines.
The STI group is now led by individuals well-known in the business industry. On the board are Eusebio Tanco (a stockbroker, investment banker, insurer, property developer and educator) and Monico Jacob (former head of National Housing Authority, Pag-IBIG Fund, Petron Corp, and Philippine National Oil Company)
STI's portfolio includes an overseas recruitment and staffing agency, Global Resource for Outsourced Workers, Inc. (GROW), a stake in Bank of Commerce, and in Philippine Insurance Co. (PhilFirst).
One of the parties in the transaction with the Philamlife Group, PhilFirst is a provider of non-life insurance coverage to individuals and corporations. It is said to be the first domestic non-life insurance company, founded way back in 1906.
http://bit.ly/tgFQUq
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