Round-up of the weekly news and developments from the Asian insurance market with stories from HSBC, MS Amlin, the wider region and more.
HSBC Insurance becomes Tier-1 insurer in Singapore
HSBC Insurance Singapore has revealed it is a Monetary Authority of Singapore's (MAS) Tier-1 insurer. A Tier-1 insurer is defined as a direct life or composite insurer whose total assets are at least S$5 billion (US$3.6 billion), or a direct general insurer or reinsurer whose annual gross premiums are at least S$500 million. Ian Martin, CEO of HSBC Insurance said, “This is a significant milestone for us as a result of our focus to sustainably grow the business since we first acquired the initial insurance book in 2003.” HSBC acquired Keppel Insurance to form its Singapore operation in 2003. Since then, its total assets in Singapore have grown almost five-fold to S$4.3 billion in 2015 and exceeded S$5 billion in 2016. Martin added, “We operate an integrated bancassurance model that provides insurance products principally for customers with whom we have a banking relationship. Being part of the wider HSBC Group allows us to efficiently utilise our resources to deepen our market share and offer market-leading products. This is a huge advantage as we are able to draw on the bank’s deep institutional knowledge to develop product solutions that support the wealth management and protection needs of our customers.” As a Tier-1 Life Insurer, HSBC Insurance Singapore will focus on its strength in manufacturing and distributing fair value insurance products and solutions for retail customers. As HSBC Singapore also serves high net worth individuals through its Premier and Private Banking units, HSBC Insurance Singapore will continue to support the rising demand for protection and legacy planning solutions through its universal life product offerings. It will also continue to invest in and leverage on digital technology and data analytics to sharpen its product suite, distribution and sales channels.
MS Amlin first to launch on Lloyd’s India platform
MS Amlin has become the first to launch on the Lloyd’s India platform. John Nelson was accompanied by members of Markel and MS Amlin during his fact finding tour in the summer last year with MS Amlin applying for a licence soon after. It has been reported that although Markel has explored joining the Indian platform they have chosen to review options in more detail for the foreseeable. More than half of the Indian property treaty book came up for renewal at 1 April, along with some agricultural business meaning MS Amlin have joined at an important time in the Indian insurance calendar. Other key reinsurance renewal dates include September and October for agriculture, aviation, accident and health and motor, while June and July see the majority of India's energy reinsurance books placed. GIC Re, which owns a large part of the Indian market, has opted not to drop its rate but increase them by 10 to 15% showing how India could be an attractive market for insurers who are having to reduce prices elsewhere.
48% of economic losses from disasters in the Asia region
Total economic losses for Asia from disaster events in 2016 were $83 billion, more than any other region of the world, according to Swiss Re. The losses in Asia represented 48% of global economic losses from disaster events in 2016. There were 327 disaster events globally last year, of which 191 were natural catastrophes and 136 were man-made. The events resulted in economic losses of $175 billion, almost twice the total of 2015. The most destructive event in Asia was the magnitude-7.0 earthquake that hit Kyushu Island in southern Japan, close to the city of Kumamoto on 16 April 2016. The quake resulted in 137 deaths and 2,000 injuries with over 8,500 buildings destroyed and an estimated 160,000 buildings being damaged. Between $25 billion and $30 billion of losses were attributable to the disaster, of which $4.9 billion were insured. Insured losses in Asia grew less than 20% year-on-year to $8.8 billion in 2016, taking the total protection gap in the region to around $74 billion (or 89% of economic losses, up from around 80% in 2015). Other notable events were the number of floods in China, the most devastating along Yangtze River basin last July. Economic losses were estimated at $22 billion, making it the costliest Yangtze River flood event since 1998. With low insurance penetration, however, insured losses from the 2016 floods were just $0.4 billion. In China, total economic losses from all disasters stood at roughly $40 billion in 2016, with close to 97% uninsured.
Fosun seeks strategic investors for Peak Re
Fosun International, the large Chinese insurer, is looking for investors for a minority stake in its reinsurance business ahead of a possible initial public offering. It is understood that the sale of shares in Peak Reinsurance could raise about $300 million. The investment would come ahead of a potential IPO of the reinsurer in Hong Kong. Fosun, which owns 87% of Peak Re, is going ahead with asset disposals as it attempts to improve its credit profile from its current junk ratings. The Shanghai-based company agreed to sell insurer Ironshore late last year for about $3 billion. Peak Re’s profit fell by 88% to $6.9 million in 2016, according to financial statements from Fosun last week. The World Bank’s private investment arm, International Finance Corp, owns the remaining 13% of Peak Re.
Chinese joint venture buys Standard Life Asia
Standard Life has sold its Hong Kong arm, Standard Life Asia, to Heng An Standard Life Insurance Company, its Chinese joint venture. The deal makes Heng An the second mainland company to acquire a Hong Kong-based insurance company in the last two weeks. Standard Life announced the deal last week saying the transaction is still subject to approval from regulators in Hong Kong and the mainland, which could take 18 months. The final amount payable will be calculated on the date of completion and will be payable in cash. A consortium that included Beijing-based UCF Group agreed to pay HK$7.1 billion (US$910 million) for the entire stake of Hong Kong Life from five local financial firms including Asia Financial Holdings and Chong Hing Bank. Standard Life Asia was established in 1999 in Hong Kong to sell life insurance and financial products through independent financial advisers and partners. Heng An Standard Life Insurance is an equally owned cooperation between Standard Life and Tianjin TEDA International Holding. Established in 2003, it sells life insurance and other investment products in 64 Chinese cities and eight provinces, serving more than five million customers.
Citigroup looking for Asia insurance distribution deal
Citigroup is looking for bids from global insurers wanting to sell general insurance products across the US bank's Asia-Pacific markets, in an agreement that could reach US$500 million. If the deal goes through, the multi-year bancassurance deal for products such as motor, property and travel insurance will be one of the biggest in the region. Any deal will give insurers with access to 15 million Citibank customers in 12 markets including Singapore, Hong Kong and China. Citi expect to find a partner for the 15-year deal in a few months. The opportunity is to be pitched to several insurers including AIG and Allianz. Citi's plan to seek partners follows the bank's move to allow insurer AIA to sell life insurance through its Asia network in a multi-year deal, starting in 2016. The bank has invested a lot to grow its technology platform and digital engagement over several years. The move is designed to complement its life insurance partnership with another one for general insurance.
Japanese branch to be opened by SCOR Global Life
The Financial Services Agency of Japan (FSA) has given SCOR Global Life approval to open a branch office in Tokyo. The SCOR Global Life Japan Branch will enable SCOR to conduct life and health reinsurance business in Japan. SCOR has had a presence in Japan since 1983 when SCOR set up its Japan liaison office. The new branch is part of the group's "Vision in Action" strategic plan to grow and deepen its franchise and shows the company’s commitment to the country. The new Japanese branch will deliver innovative products, underwriting, claims and risk solutions to the life and health market and will leverage SCOR's expertise, particularly in long-term care, critical illness, other health products and distribution solutions. Paolo De Martin, CEO of SCOR Global Life, said, "The opening of the branch will enable us to deliver new and innovative solutions to support our customers in the Japanese life market."
Terrorism activity expected in the region in the coming year according to Aon
Aon have said, in its 2017 Risk Maps for Political Risk and Terrorism and Political Violence report, that an increase in terrorist activity in Asia is expected this year. Julian Taylor, broking strategist & head of crisis management, Asia, Aon Risk Solutions said, “This is associated with the rise of the Islamic State throughout Asia, and the number of Asian citizens who have returned from fighting in the Middle East, radicalised, to their home countries. Terrorist attacks are becoming increasingly diverse in terms of their modus operandi. We have seen a shift away from a physical property risk towards an increased people risk, as attackers move away from large-scale bomb attacks towards highly motivated individuals or groups using hand-held weapons or vehicles.” Singapore’s terrorism and political violence risk level has been raised from ‘negligible’ to 'low’ in light of recent arrests of reported extremists in the country and the Indonesian authorities reported disruption of a terrorist plot to attack the island in 2016. The terrorism and political violence risk level is likely to remain ‘high’ in the Philippines during 2017, with the Islamic State promoting the country as a regional hub for militants not able to travel to Syria or Iraq. Malaysia’s overall score has been raised to ‘medium’ following the first Islamic State-linked attack in the country, an increase in the number of terrorist arrests in 2016, and multiple kidnappings by Philippines-based militants in the eastern province of Sabah.
Roy Gori appointed as Manulife’s new President
Manulife has revealed Roy Gori has been selected as the company’s new President. Effective June 5, Gori will have responsibility for Manulife’s global operating businesses, reporting to chief executive officer Donald Guloien. Gori, who is currently based in Hong Kong, will relocate to Toronto to take up the role. These changes are subject to immigration approvals. Gori joined Manulife from Citi in early 2015, where he served as head of consumer banking, North Asia and Australia, and regional head of retail banking, Asia Pacific, which included responsibility for Citi's insurance and wealth management businesses.
Randy Lianggara appointed as regional CEO for China, Indonesia and Vietnam at Aviva Asia
Aviva Asia revealed the appointment of Randy Lianggara as regional CEO for China, Indonesia and Vietnam. This newly created role concentrates on China, Indonesia and Vietnam, which are three markets targeted for growth by Aviva. These markets have common characteristics; China has the largest population in Asia, followed by Indonesia in third place and Vietnam eighth. With low insurance penetration, expanding economies, growing middle classes and high net worth individuals, these markets present significant opportunities for Aviva to grow. Lianggara will continue to report to Chris Wei, executive chairman of Aviva Asia and Global Chairman of Aviva Digital and will also oversee the operation of the Asia regional office. Lianggara joined Aviva as the regional executive for Indonesia and Vietnam in June 2016. Prior to joining Aviva, he was the Country CEO, Life Insurance, General Insurance & Asset Management for AXA Indonesia. An insurance veteran with 25 years’ of experience in the industry, he brings a strong track record in building successful businesses.
Munich Re hires Frank Mayer to lead the health business in Asia Pacific, Africa and Middle East
Munich Re has restructured the responsibility for its health business across the Group. Frank Mayer has been appointed to lead Munich Re's health business for Asia Pacific, Africa and Middle East. Mayer reports to Daniel Cossette, head of Life and Health, for Asia Pacific, Africa and Middle East.
Miller appoint David Maule to strengthen credit and political risks team
David Maule has been appointed by Miller in a business production and senior broking role, adding notable experience to its credit and political risks capabilities. Maule will work with colleagues in the London, Paris and Singapore offices to develop new business with lenders, traders and corporations, particularly in Germany and Asia. He has a wealth of experience covering trade and political risks, having begun his career at Investment Insurance International (the first exclusive political risks broker in the market) in 1977, before working in Paris and Dusseldorf. He returned to the London market in 1990 and has held senior positions at Arthur J Gallagher since 2003. David specialises in the German export market and speaks fluent German and French.
Manulife has hired several regional directors, as part of a total of 17 promotions
Peter Shum has been promoted to the position of Hong Kong’s first-ever senior executive regional director, having joined Manulife Hong Kong in 1973. Johnny Chan and Andy Tse have both been promoted to the position of executive regional director. David Li has been promoted to senior regional director. In addition, Gigi So, Nelson Ho, Veni Hui, Mabel Chong, Anna Ng Shum, and Daniel Tang have all been promoted to senior district directors. Alan Lam, Ray Ngan, Kim-Yan Wong, Franco Tsui, Dave lee, Garvin Siu, and Ray Fok have all been promoted to district directors.