Investor group buys majority stake in PHL nonlife insurer

A GROUP led by Southeast Asian financial services investor Triple P Capital has completed its acquisition of an 85% stake in nonlife insurance company MAA General Assurance Phils. Inc. (MAAGAP).

The group of investors includes the International Finance Corp. (IFC), the German development finance institution DEG or Deutsche Investitions- und Entwicklungsgesellschaft MBH, Belgian Investment Company for Developing Countries SA (BIO), and OP Finnfund Global Impact Fund I KY, Triple P Capital said in a statement on Monday.

IFC said in its own statement that it is investing up to $10 million.

MAAGAP was previously wholly owned by Malaysian investment holding company MAA Group Bhd. The sale of the 85% stake, reported to be valued at $49.3 million, was announced in November 2023 also included an option to buy out MAA Group’s remaining 15% share.

“Following the acquisition, the investor group will work together with MAAGAP to strengthen its presence in the country by focusing more on the underpenetrated segments — micro, small, and medium enterprises and retail — by offering targeted personal accident, motor, health, and fire and property insurance products,” IFC said.

“A robust insurance market is critical to strengthening the Philippines’ resilience. With climate change triggering more natural disasters that pose an increasing threat, insurance protection is key to providing a safety net and stability, especially for the most vulnerable. Access to affordable insurance services allow small businesses and the poorest to bounce back financially and rebuild their lives after an unexpected loss, fostering resilient and inclusive growth,” IFC Country Manager for the Philippines Jean-Marc Arbogast added.

The investors will also collaborate with MAAGAP’s management to implement global best practices in corporate governance, environmental and social responsibility, risk management, and compliance, Triple P Capital said.

The consortium will support the company’s digitalization and inclusive product development efforts, it added.

“MAAGAP’s prudent management, strong reputation, and solid distribution position create a powerful combination,” said David Steel, founding partner at Triple P Capital. “We are thrilled to collaborate with MAAGAP’s exceptional leadership team, whom we have known and respected for many years. Together, we aim to provide quality insurance products, extend coverage to more Filipinos and Filipino businesses, and build resilience against accidents, climate change, and other disasters.”

“This collaboration presents a unique opportunity for us to learn from the investors their international best practices in governance, environmental and social responsibility, risk management, and more. Together, we aim to elevate our standards, expand our reach, and contribute to the resilience of the Filipino community. This alliance reflects our shared commitment to growth, innovation, and delivering top-notch services to our clients and stakeholders,” MAAGAP President and Chief Executive Officer Martin L. Dela Rosa said.

DEG Senior Investment Manager Pritesh Modi added that the acquisition will help address the insurance protection gap in the Philippines, and boost job creation and economic growth.

Insurance penetration, or premium volume as a share of gross domestic product or the contribution of the sector to the economy, went down to 1.6% in 2023 from 1.73% in 2022, data from the Insurance Commission showed.

“MAAGAP with its microinsurance business line is well positioned to advance our mission to increase resilience also among the vulnerable people,” Finnfund Investment Manager Ulla-Maija Rantapuska added.

BIO Senior Investment Officer Olivier Toussaint said MAAGAP’s market positioning and vision are in line with BIO’s goal of supporting small businesses.

“We are thrilled to partner with MAAGAP’s management team and our co-investors in accompanying the company’s next growth phase while strengthening its approach to ESG (environmental, social, and governance) and impact,” he added.

Romulo Mabanta Buenaventura Sayoc & de los Angeles provided legal counsel for the transaction, PwC provided financial and tax due diligence, and Milliman provided actuarial support to Triple P Philippines.

Meanwhile, SyCip Salazar Hernandez & Gatmaitan, and Deol & Gill provided legal counsel to MAA International. — A.M.C. Sy