Yuchengco eyeing on PhilamLife

Of the growing list of family and business groups being rumored to be interested or have admitted their desire to buy a stake in the country's most profitable insurance company, only the Yuchengco have been met with disdain.

The Yuchengco were the first to publicly admit that they are eyeing Philippine American Life and General Insurance Co. (PhilamLife), which is now on the auction block. Philamlife's parent company, financially distressed US insurer American International Group (AIG), is selling assets including those in the Philippines, to raise cash to pay an expensive $61 billion emergency loan from the US government.

Since Philamlife, which has consolidated assets of P170 billion as of December 2007, is too big for just one Filipino group to afford and digest, analysts said the Yuchengco's declaration of interest is their strategy to call the attention of potential rich partners who can join their company. But not long after the Yuchengcos came out in the open about their interest in Philamlife, a group of parents who used to be clients of Pacific Plans, Inc., a Yuchengco-owned pre-need film, flooded various media outlets angrily questioning the family's plan.

In the cyber world, individuals voiced their concerns in blogs and feedback channels of news sites, citing their sad experience of being shortchanged or "cheated" when the promised value of the investment product they bought from Pacific Plans was not honored.

Some of Philamlife's own employees even threatened to resign should the Yuchengcos end up winning the race to own Philamlife.

Yet, when Jaime Augosto Zobel de Ayala admitted Tuesday that his family, too, is entertaining the opportunity to snatch the country's market leader in life insurance business, or when the name of the Sy family was floated as another potential contender, no similar outrage was felt.

Why the stark difference? The answer lies in one of the Yuchengco's past business decision that continues to haunt them.

- Retrieved on October 08, 2008 at www.abs-cbnnews.com

I think the Public Relations' nightmare has come. The effort of the PEP to reincarnate an old issue is a nightmare for the PR group. PEP’s, a group of parents that used to be clients of Pacific Plans, efforts could now upset the Yuchengco's opportunity to clinch a deal that could potentially catapult them as the undisputed leader in the insurance industry. The PEP do not trust that what had happened to them before would not happen to Philamlife now. The possible lessons we can get from this issue, as what the crisis management expert said, is that companies should take care of their reputation and engage with, and if possible, find a middle ground with, their stakeholders. Reputation, after all, is built overtime, but could be tainted in a snap.