Multinational insurer American International Group Inc. (AIG) is seeing significant room for growth in the Directors and Officers (D&O) insurance segment in the Philippines given the country’s economic development.
D&O insurance is a policy that protects directors and officers of organizations against claims resulting from the decisions or actions they undertake on matters within their scope of responsibility.
In a media luncheon on Monday, Jason Kelly, vice president for Financial Lines at AIG Insurance Hong Kong Ltd., said historical reference showed that D&O insurance has been a very slow grower in Asia.
To date, the D&O premium volume in the Philippines stands at only 2.5 percent of the total premium volume for Asia, while Hong Kong, Singapore, and Japan comprise the largest share of premium volumes n the region.
However, given the recent economic gains achieved by the Philippines, there is a very good opportunity for the company to expand the presence of D&O insurance in the country.
“We wouldn’t be here today if we didn’t feel like we are, kind of, at that point right now,” Kelly told reporters.
“Our expectations . . . five years from now we’re taking about a very substantial business regarding D&O insurance to the absolutely best of the Philippine listed companies,” he said, adding that D&O insurance helps promote corporate governance compliance.
With this, AIG, in partnership with professional services company KMPG and Norton Rose Fulbright, aim to educate markets in Asia about the increasingly important yet underdeveloped discipline of corporate governance. It is hosting seminars across seven countries in the region, including the Philippines, throughout May and June, Kelly said.
According to the Organization of Economic Cooperation and Development, corporate governance involves a set of relationships between a company’s management, its board, shareholders and other stakeholders.
Corporate governance also provides structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined.
“The aim of these events is to raise the awareness of corporate governance among risk managers, and provide practical and valuable advise on how to get your organization ready should a regulator come knocking,” Kelly said.
The insurance firm said that enhancing corporate governance brings increased protection for shareholders, additional security to employees and directors, competitive advantage for companies in the war for talent and governments as they seek to create an attractive environment to attract investment.
“Corporations and countries in Asia are witnessing an increasing expectation for improvements in corporate governance from regulators. We hope that the AIG Corporate Governance road show will serve to address some of the concerns that executives may have and further explain the importance of Directors and Officers Insurance,” said AIG Philippines President Mark Lwin.