Round-up of the latest news and developments from the Asian insurance market with stories from Ping An, Munich Re, Singapore and more.
Ping An named the world's most valuable insurance brand
China's Ping An has overtaken Germany's Allianz to become the world's most valuable insurance brand with a brand value calculated at $16.3 billion. Ping An posted net profits of $9 billion in 2016. Despite a slowdown, its core market of China is far more dynamic than the US and Western Europe, where the other leading brands are based, helping it to the top spot. Furthermore, Ping An has been extremely successful at cross-selling based on excellent core products. The firm offers a limited number of free products and services to potential customers via its online platform. This has generated goodwill and significantly expanded Ping An’s user base, creating a platform for cross-selling. Ping An is just as focused on its brand as its revenues. It is the first Chinese financial firm to deploy a Net Promoter Score (NPS) model to track customer feedback and brand loyalty. This commitment to tracking and tweaking the brand is paying off, with very high customer equity scores on Brand Finance’s Brand Strength Index. Brand Finance’s CEO David Haigh said, “Ping An has lofty ambitions, aiming to become the world’s leading provider of personal finance. Based on this evidence, in the long term it may not be an unrealistic goal.”
Asia will drive growth for insurers according to Munich Re
Asia’s emerging economies will support global insurers into next year, offsetting an expected slowdown in China, according to Munich Re. Global insurance premiums will increase by 4.5% in nominal terms in 2017 and in 2018, an increase on the 3.0% seen in 2016. In real, inflation-adjusted terms, insurers' revenue growth would be around 2.9% this year and 3.1% in 2018. Munich Re expects premiums to hit US$4.9 trillion in absolute terms in 2018, up from US$4.57 trillion last year. Michael Menhart, Munich Re’s chief economist said in a statement, "The economies of many emerging markets, such as Brazil, but even Russia, are experiencing a significant recovery. This is leading to increased growth in property-casualty insurance." Menhart expects the growth to balance out negative factors, such as slowing economic expansion in China. Long term, Asian economies will contribute 21.4% to global insurance premiums by 2025 an increase from 13.3% today.
Singapore is looking to establish a home grown P&I Club
Singapore is looking to have a protection and indemnity (P&I) club in the medium term and is also working to have its own clause. Gina Lee-Wan, chairman of the legal and insurance committee under the Singapore Shipping Association said, “Our next initiative will take a little bit longer, may be a couple of years, but we are moving towards having a Singapore Clause.” A clause includes the details of insurance cover or the wordings on which the cover is underwritten on. The first Singapore-based national mutual war risks insurance, the SWRM, was launched in 2015 by P&I underwriter. SWRM’s terms are an extension of The Standard Club Asia, with the club’s tailored war risks wording being used as a base with others, such as Nordic, German, French and American also being used if needed. A team has been put in place which will draft the Singapore clause and will look at gaps in a number of international forms or plans and “build an overarching product that is missing at the moment.” Lee-Wan, who is also the co-head of the maritime and aviation practice at law firm Allen & Gledhill said, “With SWRM, Singapore already has the vehicle. We now need to add on what is tailored for us. We will look at the existing plans, what has worked and not worked and try to fill the gaps.” While drafting the Singapore Clause, the team will assess the risks the maritime industry is facing and build it into its SWRM cover.
Singapore Life generates S$70mn in funding
Singapore Life has generated US$50 million (S$70 million) in a Series A funding round led by Hong Kong listed Credit China FinTech Holdings through its subsidiary, Impact Capital Holdings, as well as UK-based investment firm IPGL Limited. Singapore Life highlighted that the money raised marked the largest-ever Series A funding round by a Singapore-based insurance technology company. Walter de Oude, CEO of Singapore Life said, “Credit China FinTech and IPGL bring the best of technology-led business success in support of Singapore Life’s long term strategy. They are experienced trailblazers in fintech and committed to Singapore Life’s long term development and capital needs. Having the support of these strong international shareholders attests to the strong confidence in Singapore Life’s strategy, and in Singapore as a financial centre and a destination for global investment,” Singapore Life has submitted an application to the Monetary Authority of Singapore (MAS) for a direct life insurance license. The company aim to offer universal life products, standalone term insurance with associated riders, investment linked plans and wrappers, as well as endowment assurance.
Gradual recovery hoped for in the marine industry
A gradual recovery is hoped for in the marine industry following one of its worst earning years in 2016, which saw marine insurers weather large losses and depressed rates. While there are still sizable pressures in offshore energy, due to the drop in oil prices, container and dry bulk lines of business are showing signs of recovery, said Stephen Gordon, managing director of Clarkson Research Services. Gordon highlighted the growth in trade, particularly in Asia, as the main growth drivers for the marine industry. While geo-political issues and increasing protectionist ideologies raise alarm bells, stable growth in China and the country’s ‘One Belt, One Road’ policy will have a positive impact on the shipping industry. China’s ‘One Belt, One Road’ policy is thought to boost exports of machinery and high-tech manufactured goods which would support the heavy lift vessel sectors, while infrastructure investments will boost demand for raw materials. It was also noted that as technology and the smart shipping agenda ranks highly for shippers, insurers will have to pay increasing attention to cyber exposures in the marine sector.
3.3% rise in gross written premiums for Labuan-based insurers
Insurers and reinsurers in the Labuan International Business and Financial Centre (IBFC) witnessed an uplift in gross written premiums of 3.3% to US$1.4 billion. With challenging oil prices, the insurers and reinsurers successfully changed focus from oil sensitive industries like engineering and marine to other specialised lines. The IBFC saw an increase in premium retention, mirroring the internal capacity of Labuan’s insurance industry to underwrite more business, particularly business from non-residents which contributed 57.9% of total premiums. 2016 also achieved the biggest underwriting margin since 2012, attributed to higher earned premiums written and lower claims during the year. Overall the sector registering profit before tax that grew by 52.4% to $387 million and a margin of solvency of more than six times above the minimum regulatory requirement. Wealth management solutions continued to be offered by the IBFC to meet the needs of high-net-worth individuals in the Asia Pacific, a region of significant wealth creation over the last decade. In 2016, there was a 13.2% growth in the establishment of Labuan foundations to 188, of which 78.2% originated from the Asia Pacific region.
New Vietnam framework for new insurance products
The government of Vietnam is expected to launch a framework for the creation of new insurance products, such as insurance for public assets and major illnesses. Phan Kim Bang, Chairman of the Insurance Association of Vietnam, said that insurance companies expect government policies to lead the creation of the framework. He added that the insurance market is expecting strong growth at over 14% for non-life insurance this year. Phung Ngoc Khanh, Director of the Insurance Supervisory Authority, said that Vietnam’s economy is expected to post high economic growth of around 6.5% this year. The government also plans to focus resources on boosting the services sector, including the insurance market. Ngoc Khanh said, “There is much room for growth in the insurance market, such as in agriculture.” Demand for insurance continues to increase due to the country’s rapid international integration, coupled with improved awareness about the role of insurance.
West of England Club opens Singapore branch
The West of England Club is launching in Singapore as competition increases to be the marine insurance hub for Asia. 9 of the 13 International Group protection-and-indemnity (P&I) clubs will have offices in Singapore but Hong Kong remains the traditional centre for Asia, with 12 of the clubs conducting business there. The West of England’s Singapore operation will have underwriting and claims-handling functions from the outset and opens with Malcolm Pedley as chief executive, David Griffiths looking after underwriting and Julien Rabeux in charge of claims. All three were previously located in the club’s Hong Kong office. Kay Kaur Williams will manage the office, with the club looking to grow its Singapore-based team. The West of England Club’s shipowner directors are to hold their May board meeting in Singapore, with the occasion used to flag the club’s arrival in the city-state. This meeting is set to also sign off on the accounts, which should show the free reserve growing to more than $300m from $276m a year ago. The West of England Club has been in Hong Kong since the early 1980s, so is well established in this gateway to China. The club has therefore eyed Singapore as a second outpost in Asia rather than joining the trio of clubs in Shanghai. Tom Bowsher, the West of England Club’s underwriting director said, “Singapore is a very important maritime centre so the new office is as much about servicing our worldwide members as growing and supporting the membership in Asia.”
Regional chief executive of AIA steps down
Jacky Chan, CEO of AIA Hong Kong and Macau, will replace Gordon Watson as regional chief executive following Watson’s decision to leave the company. Chan will be responsible for AIA’s operations in Hong Kong, Macau, Singapore, Brunei, Indonesia, the Philippines and Cambodia as well as group agency distribution from 1 June 2017. He has been with AIA for nearly 3 decades and has been CEO of AIA Hong Kong and Macau since 2009. John Cai, currently CEO of AIA China, will be appointed as regional chief executive responsible for the insurer’s operations in China, Malaysia, Vietnam, Taiwan and Myanmar. Cai spent the first 10 years of his career in sales in New York City. In 2003, he moved back to Asia as chief agency officer of AXA Hong Kong and four years later he was appointed CEO of AXA Hong Kong. He has been CEO of AIA China since 2009. Bill Lisle will continue in his role as regional chief executive, responsible for AIA’s operations in Thailand, Korea, Australia and New Zealand, India and Sri Lanka as well as group partnership distribution. Meanwhile, AIA announced that Ng Keng Hooi will now assume his new role as group chief executive, effective from 1 June 2017.
PERILS appoints Darryl Pidcock as the head of Asia Pacific
PERILS have hired Darryl Pidcock as the head of Asia Pacific, based in Sydney. In his new role, Pidcock will focus on developing the company's offering in the Asia Pacific region. In addition to the territory of Australia currently covered by PERILS, this will include the expansion of the PERILS industry exposure and loss database into other Asia Pacific markets. The company confirmed that Pidcock will also be involved in the NatCatDAX Project, a Singapore-based initiative to help increase data availability for natural catastrophe insurance in Asia. Pidcock started his reinsurance career in 1999 with Swiss Re Australia as a credit specialist and property and casualty client manager. In 2005, he moved to Hong Kong to head up the Hong Kong and Taiwan property and casualty, life and health business units and was general manager of the Hong Kong Swiss Re branch. He was later appointed as head of Swiss Re’s Korea branch in 2010, before being promoted to head of client management for China in 2013, where he led the client management teams for property and casualty as well as life and health in Beijing. In 2015, Pidcock moved to Singapore to head up the client management team for Swiss Re life and health in Southeast Asia. Luzi Hitz, CEO of PERILS said, “I am delighted that Darryl has joined our team as head of PERILS Asia-Pacific. With his exceptionally broad experience and excellent reputation in the region, I am convinced that he is the ideal person to lead our activities in Asia Pacific.”
Ping An hires Jonathan Larsen as chief innovation officer and CEO
Ping An have appointed Jonathan Larsen, as chief innovation officer of the group and chairman and CEO of Ping An Global Voyager Fund. The global Voyager fund is a new US$1 billion fund which will invest in FinTech and HealthTech opportunities globally on behalf of the group. Larsen will be charged with bringing new technologies, platforms and business models to Ping An’s businesses in China and internationally. He will also seek to leverage Ping An’s unique technology capabilities to add value to companies in which the Ping An Global Voyager Fund invests. Larsen brings 30 years of experience in the finance industry to Ping An. He served at Citigroup for 18 years where he was most recently global head of retail banking. Larsen served as head of the Asia Pacific consumer business, CEO of Citibank Singapore, head of wealth management Asia and head of business development for Asia-Pacific. Larsen led many innovations at Citi including important contributions to the firm’s digital platforms, new distribution models and a wide range of new product offerings.
Rhonda Hui hired by Chubb as new chief agency officer in Hong Kong
Rhonda Hui will join Chubb as chief agency officer for Chubb Life in Hong Kong. This means leading the agency management team to develop and implement effective strategies to further build a productive and quality agency force of scale. Michael Ho, country president of Chubb Life in Hong Kong said, “Agency remains our core distribution channel which we will continue to grow and develop”. Hui, who brings 2 decades of agency management experience in the life insurance industry, joins Chubb Life from FWD Life Insurance, where she headed the agency training, and recruitment.