I HAULED my carcass out of the house today and into a cab to attend the press conference of Philamlife CEO Jose "Joey" L. Cuisia. The venue of the presscon was on the fifth floor of the company's still stunning headquarters along UN Ave. in Manila, a landmark in Philippine architectural history. I was a tad late and the room was fully packed by media from print, radio and TV.
The news of AIG selling Philamlife, one of its crown jewels, was already announced last Friday evening, right after the conference call of AIG CEO Edward Liddy w/c we listened to via the company's web site. The American insurer had to raise funds quick to be able to replenish its $85-billion credit line w/ the Federal Reserve Bank of New York. So it wasn't surprising that almost everyone who was everyone in media was there. Imagine seeing even publishers and the editors attending, I suspect because they were Philamlife insurance policy holders or mutual fund investors. I know of a couple of reporters whose mutual fund investments were dragged down because of the high bond prices and the global uncertainties owing to the sub-prime credit mess in the U.S.
For the most part, Cuisia tried his best to explain how the sale would push through but was honest enough to say that he wasn't exactly sure how the company would be sold. (The Philam Group has about 10 separate units under its wings among them Philamlife, Philam Plans, PhilamCare, AIG PhilAm Savings Bank, etc.). He didn't know if it was to be sold as a group or in separate units as some possible buyers have already been mentioned in some newspapers as being keen only on the insurance concerns, or in the banking units. AIG had appointed The Blackstone Group and JP Morgan to handle its divestiture program.
(Cuisia mobbed by the reporters after his presscon.)
“I think there is some value to selling [Philamlife] as a group, but you know, it will again depend on the kind of interest that we have. If there is a strong interest in say, Philamlife, but not as strong in the affiliates and [the buyers] will pay a very good premium for Philamlife, these investment bankers may recommend to AIG to sell the units separately. It’s not up to us, it will be up to AIG to make that decision. We will, of course, give our own input, but I think at this point, we cannot disclose that,” Cuisia said.
A former central bank governor under President Cory Aquino's term, Cuisia tried to reassure policyholders again that Philamlife had enough financial muscle (about P80 billion in reserves) to answer any demands for a payout, in case policyholders wanted to surrender their insurance contracts. Michele Khalaf, Philamlife's deputy president and chief operating officer, said some did surrender their insurance policies but these were "immaterial" and didn't make a dent in the insurance firm's bottomline considering that it had about P143 billion worth of insurance contracts owned by individuals or corporates.
For the most part, the presscon was somber even as Cuisia tried to be upbeat about the prospects of Philamlife's future. But there was a few light-hearted moments such as when Mam Yeng Galang, business editor of Malaya, asked him what he thought about "another former [central bank] governor heading the new Philamlife." To w/c Cuisia shot back: "What former governor? You be more specific. Are you referring to a former governor that sits in a competing firm?" w/c cracked us up. After snickering, Cuisia decided to give us a "no comment."
(Gabby Singson, left, who until recently was financial adviser of taipan John Gokongwei, right. Photo from Ateneo web site.)
Mam Yeng of course was referring to no other than former Bangko Sentral governor Gabriel C. Singson who now chairs Grepalife, a unit of the Yuchengco Group of Companies. The ribbing by the media was so because Lolo Gabby had already announced last week that the Yuchengcos (yes the very same ones who owned the now shuttered Pacific Plans Inc.) were interested in buying Philamlife. And everyone knew that while Cuisia and Lolo Gabby are not enemies, they keep a cool distance from each other. Uhuh, yeah, the term "frenemies" is apt in the description of these two's relationship. Methinks this is just another play of an De La Salle (Cuisia)-Ateneo (Singson) rivalry.
It was interesting that even while Cuisia didn't want to say anything pointed about his successor at the central bank, his Philamlife colleague apparently wanted to make it known that they weren't exactly hot about the idea of the Yuchengcos buying the insurance firm. Khalaf said AIG had outlined "clear criteria" for prospective bidders for its units. “One, it has to be a strong reputable brand name; two, it has to be an institution that is strong financially; and three, that it has to be a strategic fit as far as providing the employees and the stakeholders of the compant with growth potential and to continue the legacy of Philamlife.
(Despite the prospect of being jobless soon, Michele Khalaf still manages a smile for our camera.)
“I think if you apply the criteria to some of those rumored to be interested, I think automatically you can draw your own conclusions as to wheter that interest will be seriously considered or not.”
Oof! was that a subtle jab at the Yuchengcos' flameout in Pacific Plans? I can just hear the PEP Coalition members gnashing their teeth.
ON a personal note, it will be sad to see Philamlife go to another owner. It is one of the few efficient insurance firms around these parts. When my Pop passed away last year, we had no problems at all claiming the benefits (my Pop's policy dated back to the 1960's can you imagine?!).
In contrast, Insular Life was sooooo super slow in acting on our claim even if our requirements were complete. It was a model of inefficiency as papers kept on being shuffled bet. us and the Insular office as their claims people kept on asking yet another proof of my Pop's death from us. I would not recommend Insular Life to anyone.