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EC News: Asia Edition 18 October

  • Publish Date: Posted over 7 years ago

Asia is an important market for AXA

Jean-Louis Laurent Josi, regional chief executive officer of AXA Asia, has said that Asia is an important market for AXA globally, owning a 43% share of new life business in the region and contributing to 18% of earnings. Asia was one of the first geographies visited by Thomas Buberl, CEO of AXA Group, who replaced Henry de Castries who retired last month. Laurent Josi, a member of the AXA Group management committee said, “Asia is key focus for the group” and the aim is to create EUR900 million (US$992 million) profit by 2020 from Asia ex-Japan. This represents a 60% rise in five years as profits from Asia amounted to EUR550 million in 2015. The ambition is to exceed market growth by 4 to 5 percentage points each year to reach a 10-12% CAGR over the next five years.

 

US$27 million institute set up in Singapore to improve public understanding of risk

The National University of Singapore (NUS) and Lloyd's Register Foundation unveiled the Lloyd's Register Foundation Institute for the improved understanding of risk at NUS, the first international academic and public institution to focus on risk in Asia. Construction was made possible through a £10 million (US$12.9 million) gift from the UK-based Lloyd’s Register Foundation and £11 million in funding from NUS. The institute marks the Foundation’s largest gift beyond the UK and it is also the largest NUS has received from a foreign organisation. The institute will lead transformative research on the scientific understanding of risk and its application through a multi-disciplinary approach that combines engineering, science, humanities and social sciences. It would also, as a public institution, look to become a trusted and authoritative voice on risk issues important to communities in parts of Asia and internationally. Lawrence Wong, Singapore’s Minister for National Development and Second Minister for Finance, opened the institute. Tan Chorh Chuan, NUS president professor said, “Understanding risks and the effective communication of these risks are areas that are vital to nearly all societies and often underdeveloped in many parts of the world. The new Lloyd’s Register Foundation Institute for the Public Understanding of Risk at NUS will help to bridge this gap in Asia, and take the lead in high quality research in this underserved area.”

 

Sun Life plans to grow its Asia footprint with expansion into Singapore and Thailand

Canada's Sun Life Financial Inc is looking to expand into Singapore and Thailand in an effort to grow its presence in Asia where there is an increase in insurance demand. Sun Life has already entered into many takeovers in Asia over the past three years and is open to further acquisitions as well as developing its own presence, the company confirmed. Sun Life hasn’t confirmed a deadline for the proposed growth pans only that it is looking at Asia's growing middle class in markets such as China and India. Sun Life operates in seven Asian markets including Hong Kong, India, China, the Philippines and Malaysia. Operating in Singapore and Thailand would strengthen its position as an operator in the Asian market. Southeast Asia has become a hot spot for foreign insurers who are attracted by lower insurance penetration levels and faster growth rates for life insurance premiums than in their home markets.

 

Qatar Re to open branch in Singapore

Qatar Re will open a branch in Singapore after being given a licence to operate. The Bermudan based company also has branch offices in Zurich and Dubai and a representative office in London. Qatar Re has been awarded a licence by the Monetary Authority of Singapore to operate a branch office in the jurisdiction. Micky Lee will lead a team of three senior underwriters, writing non-life treaty business, focusing on property-per-risk, property catastrophe, casualty and specialty lines. The company is looking to make further appointments as it grows its presence in the region. Gunther Saacke, CEO of Qatar Re said, “We are excited to have received our branch licence from MAS. Singapore continues to be recognised as Asia’s leading reinsurance hub, and offers us the ability to participate in a highly developed market place close to many of our clients and brokers. Fully establishing ourselves in Singapore represents a significant advance in our strategy of increasing our profile in the Asian reinsurance market and we look forward to contributing to its reputation for growth and innovation.”

 

Berkshire Hathaway Specialty Insurance Company expands to Macau

Berkshire Hathaway Specialty Insurance Company (BHSI) revealed that it has been awarded a license to sell insurance and reinsurance in Macau and has appointed in key positions in its new office. Marc Breuil, President of Asia at BHSI said, “It is a very interesting time in Macau, with continued diversification of the territory’s economic profile. We are pleased to expand our Asian footprint and bring to Macau local knowledge and expertise along with BHSI’s unique balance sheet and financial strength.” BHSI Macau will offer commercial property, energy, construction, terrorism, casualty, executive and professional lines, surety, accident and health and marine insurance. BHSI already operates in Hong Kong and Singapore but the new Macau office marks an expansion in the region. The company named Yasmin Chan as Branch Manager and Ivory Chong as Underwriting Manager. Yasmin comes to BHSI with 2 decades experience in Macau insurance and reinsurance. Ivory joins BHSI with more than 15 years of industry experience, including more than a decade in the Macau market.

 

Chinese state-owned firms to aquire ACR Capital

Shenzhen Qianhai Financial Holdings (QFH) and Shenzhen Investment Holdings (SIHC) are to buy all of Singapore-based ACR Capital Holdings, which is the parent company of Asia Capital Re. ACR confirmed that its major shareholders, 3i Group, Khazanah Nasional, Temasek Holdings and Marubeni Corporation, have accepted terms for the purchase of all ACR’s shares by Asia Investment Capital Holdings (AICH) which is jointly owned by QFH and SIHC. Subject to regulatory approval, ACR’s shareholders will begin a definitive agreement with AICH on the acquisition of ACR. Both QFH and SIHC are 100% state-owned investment corporations of Shenzhen, a city in southern China. With significant investment in the financial sector, the two companies are looking in particular to further increase their exposure to the reinsurance industry.

 

Sompo acquires Bermuda-based specialty insurer in deal worth US$6 billion

Sompo Holdings revealed that it would acquire Bermuda-based Endurance Specialty Holdings, which has an extensive US presence, for US$6.3 billion. The deal is the second largest acquisition by a Japanese insurer after Tokio Marine Holdings, Japan’s largest non-life insurer, purchased US-based HCC Insurance Holdings for US$7.5 billion in 2015. The Sompo-Endurance deal will be finalised by the end of the first quarter of next year. Sompo said in a statement, “Through the acquisition, Sompo will acquire a strong operating base in the US, the world’s largest insurance market, and Sompo’s overseas insurance business portfolio will become more geographically diversified.” John Charman, Endurance chief executive will remain head of Endurance after the acquisition. Japanese insurers have seen declining growth at home and to compensate have been buying overseas organisations.

 

Indonesian reinsurer undergoing phased consolidation

Indonesia Re has to go through a series of consolidation steps involving a number of state companies, including Reasuransi Umum Indonesia (RUI), ASEI Re, Asuransi Kredit Indonesia (Askrindo) and Reasuransi Nasional Indonesia (Nasre). Phase one of the consolidation of Indonesia Re has been accomplished with the joining of Reasuransi Internasional Indonesia (ReINDO) into Indonesia Re. The launch of Indonesia Re, after a year of preparation, is thought to help shrink the country’s current account deficit, which partially stems from a high dependence on foreign reinsurance services. Rini Soemarno, state-owned enterprises (SOE) Minister, claimed that the insurance industry could take premiums of IDR259 trillion (US$20 billion) annually, but had to reinsure about IDR20 trillion abroad each year because of lack of capacity at home. This figure is in line with those of the Financial Services Authority (OJK) that show as much as IDR14 trillion of reinsurance premiums was placed abroad in 2015, an increase of 5.5% from 2014.