Round-up of the latest news and developments from the Asian insurance market with stories regarding Chinese M&A activity, Pana Harrison, Indian insurance authorities and more
M&A activity continues in evolving Chinese environment
Chinese M&A Activity will remain an important part of the economic development of the country, although this trend will face a number of challenges such as regulations, government policy and expertise. The volume of outbound and domestic deals is anticipated to grow, although depreciation pressure on the yuan and eroding foreign currency reserves could cause some downside impact on outbound deals. Over 200 Chinese organisations are waiting for local regulatory approval to start new insurance businesses. A few Chinese financial and investment groups are in search for insurance acquisitions both in local and international markets, using the leverage of their investment strength to help insurance companies’ investment returns. Driving Chinese buyers’ M&A activity is the desire to run an international business, as well as the technical skills and experience that the buyer can gain from the acquired insurers in mature markets.
Singapore based Pana Harrison buys AIH Reinsurance Brokers
Pana Harrison has bought Labuan-based AIH Reinsurance Brokers, subject to regulatory approval. The acquisition has been unanimously given the go ahead by the boards of directors of the two companies. The merged entity will have 60 employees in seven countries with a pro-forma combined annual premium approaching US$60 million. CEO of Pana Harrison, Ronnie Lum said, “The acquisition of AIH Reinsurance Brokers is an important step for us to achieve our goal of becoming Asia-Pacific’s leading reinsurance broker. We have great synergies and look forward to developing new business lines and products with our colleagues at AIH Re.” Michael Darby, managing director of AIH Reinsurance Brokers said, “This is the beginning of an exciting new phase for AIH Re. Now that we are a part of Pana Harrison, our clients will have access to both a strong pan-regional broking platform with a greater breadth and depth of expertise and products.”
Indian Authorities grant approval to a number of foreign and domestic reinsurers
Numerous foreign and domestic reinsurers have been given approval by the Indian authorities to set up operations in the country. The Regulatory and Development Authority of India (Irdai) said that the decision was made as it looks to increase competition in the market. Approval for branch offices within the Indian non-life insurance market were given to Swiss Re, Hannover Re, Reinsurance Group of America, Munich Re and India’s first domestic private reinsurer, ITI Re. The value of India’s non-life market is thought to be in the region of $12.9bn. The market is presently occupied largely by the state owned reinsurer GIC Re and competition in the segment is small. With these new approvals the Indian Government hopes to increase competition and the quality of service offered in the sector.
AXA reveals merger of its general and life insurance entities
AXA has revealed it will merge its general and life insurance businesses into a single entity under AXA Insurance Pte Ltd. The move was conducted through a scheme of transfer which was licensed and approved by the Monetary Authority of Singapore and the High Court. AXA Insurance Singapore transferred its business to AXA Life Insurance Singapore Private Limited from Jan 1, 2017, with the single entity being granted a composite insurance license which will provide customers with greater convenience to access a full range of integrated general and life insurance solutions.
Competition to lead Singaporean independent broking sector
Competition to lead Singapore's independent reinsurance broking market and to command a bigger presence in the region is increasing. Asia Reinsurance Brokers (ARB), one of the largest independent reinsurance brokers, has 63 employees in over six countries in Asia with reported revenues of S$151 million (US$104 million) in 2015. Last year, ARB and its parent group AsiaRe holdings acquired a majority stake in Adi Pratama Asia in Indonesia, which has since been renamed PT Asia Reinsurance Brokers Indonesia. UK firm B P Marsh & Partners bought a stake of 20% in ARB. ARB was set up in 2008, after a management buy-out of the business from AJ Gallagher led by the CEO, Richard Austen. ARB offers long-term reinsurance and insurance solutions to a wide range of insurance and reinsurance companies throughout Asia and is a fully registered insurance intermediary with the MAS. It has offices throughout the region, including Singapore, Malaysia, the Philippines and Indonesia.
The region saw the worst nat CAT events last year
Asia witnessed the biggest natural catastrophes in 2016, making up 56% of global Nat CAT losses with only 25% of these being insured, according Munich Re. Total global natural catastrophe losses in 2016 was US$175 billion, nearly 65% more than in 2015. Insured losses in 2016 were US$50 billion leaving a gap of US$125 billion which were not insured. Torsten Jeworrek, member of the Board of Management of Munich Re, highlighted his concern at the high percentage of uninsured losses, especially in emerging markets and developing countries. The natural catastrophe with the highest cost also occurred in Asia. There were two earthquakes on the southern Japanese island of Kyushu close to the city of Kumamoto last April which incurred losses of US$31 billion with just under 20% of this insured. The floods in China in June and July saw overall losses reach US$20 billion, only 2% of which were insured.
Myanmar is open to foreign insurers this year
Myanmar will allow international companies to enter the insurance market this year. A liberalisation roadmap will detail how foreign insurers should be allowed into the market. Representatives from international firms will sit on a new Myanmar insurance association, which U SoeWin Thant, General Manager of Global World Insurance Company, thinks will be in place next month. Regulators have already invited local and foreign insurance companies to share their thoughts on how best to liberalise the sector, U SoeWin Thant said. “I said there is a need to open up the market because we need technical expertise and knowledge, especially in areas like life insurance. In order to get that technical expertise, we need to invite foreign insurers to help develop the Myanmar life insurance market.” A review of the country found that the Myanmar insurance sector is held back by product restrictions, a shortage of experienced professionals, as well as inadequate IT systems and standards on reserves for different insurance policies.
Vietnam set for a robust 20% growth in its insurance sector
The Vietnamese insurance market is in a position for strong double-digit growth over the year, predicted at over 20%, strengthened by an improving economic outlook, along with government policies promoting the services sector. Phung Ngoc Khanh, Director of the Finance Ministry's Department of the Insurance Supervisory Authority, said that the economy of Vietnam was expected to post high economic growth of about 6.5%. The government also plans to focus resources on strengthening the services sector, including the insurance market. Khanh says there is room for growth in the insurance market pointing out agriculture as an example. Demand for insurance products is also on the rise amid the country’s rapid international integration, coupled with improved awareness about the role of insurance.
Willis Towers Watson hire Ken Brown
Willis Towers Watson has hired Ken Brown as division leader for the South Asia and Emerging Markets in its insurance consulting and technology business across Asia Pacific. The newly-created role adds to a busy recruitment period for the consultancy, which has welcomed a 20% increase in staff over the past year. Further appointments include Rob Speers and Vincent Yu, who both joined as senior consultants, based in Hong Kong. Brown brings 30 years insurance industry strategy and leadership experience involving growing businesses across Asia.
Navigators hire leadership team
The Navigators Group, global specialty insurer and reinsurer, unveiled the appointment of a leadership team in Asia. Jon Doherty has been appointed as managing director of Asia, Sang Kyoun Kim as chief underwriting officer and Paul D’Souza as chief operating officer, Chief Financial Officer for the region.
Claudio Gienal departs Zurich
Claudio Gienal has departed Zurich after spending eight years in various Zurich roles, including project management, operations and life insurance before CEO Mario Greco recruited him last April to lead a task force responsible for putting together the insurer's new strategy. The insurer will deepen cost cuts and lower profit targets, while maintaining regular shareholder payouts. A spokesman for the insurer confirmed his departure. He will be replaced by Giovanni Giuliani, who joined Zurich from Milan-based Generali in September.
Great American Insurance Company appoint Choi Moon Kee
Great American Insurance Group have revealed that Choi Moon Kee will be joining as director, Marine & Client Relationship Management. He will be responsible for the strategic management of Marine underwriting and portfolio management within Asia. He will also assist the CEO of Great American’s Singapore Branch in leading the business toward its growth objectives within Asia. Choi brings more than 20 years’ experience within the marine insurance sector in Korea, holding management, insurance underwriting and claims positions specialising in cargo, hull as well as casualty and engineering. Before this he was the head of Marine & Channel Management with ACE American Fire & Marine Insurance Company in Korea.
MS Amlin hire new construction underwriter
MS Amlin has appointed Steve Ng Ka Chuen, as senior construction underwriter in the Singapore office. Steve will oversee the development and growth of MS Amlin’s construction business across the Asia Pacific region. Steve brings more than 14 years’ experience in insurance and reinsurance underwriting, with a major focus on Construction. He leaves a senior underwriter position he held with Zurich Insurance Company Ltd in their Engineering Lines, Global Corporate team. Other positions have included Asia Capital Reinsurance Group and Royal & Sun Alliance Insurance plc. Speaking of the addition to the team, Simon Clarke, CEO, MS Amlin Asia Pacific said, “We are delighted to welcome Steve to the team in Singapore. His experience, specialist knowledge and talent will help us serve the needs of more clients and brokers across the Asia Pacific region. MS Amlin is dedicated to understanding and meeting the unique needs of our clients, wherever they are in the world, and this appointment is part of our global plan.”