Round-up of the latest news and developments from the Asian insurance market with stories from Swiss Re, Chubb, Manulife and more.
Swiss Re Corporate Solutions appoints Fred Kleiterp as CEO EMEA
Effective 1st July 2017, Swiss Re Corporate Solutions have appointed Fred Kleiterp as CEO Europe, Middle East, and Africa (EMEA).
Mr. Kleiterp joined Swiss Re in 2001 and has held several positions within the group before joining Corporate Solutions in 2009. Fred is a Dutch national and holds a Master’s Degree in Economics from Erasmus University in Rotterdam, the Netherlands.
Currently, Mr Kleiterp is serving as CEO Asia Pacific, Swiss Re Corporate Solutions in Singapore and will be relocating to Zurich. In his new position, Mr Kleiterp will be responsible for managing the strategy, development and performance of the company’s presence in the EMEA commercial insurance markets.
Fred succeeds Tony Buckle, who has decided to step down from his position as CEO EMEA.
"Fred's recent international experience in Asia Pacific, combined with his previous role as leader of our EMEA organisation, gives him the ideal background to further strengthen our presence in the region and fortify our relationships with clients and brokers," states Rudolf Flunger, Chief Regions Officer, Swiss Re Corporate Solutions. He added: "I'd like to extend my gratitude to Tony for his dedication and commitment to Corporate Solutions. Under his leadership, our operation in EMEA has grown profitably and is well positioned for the future."
Swiss Re Corporate Solutions serves clients and brokers throughout the EMEA region from offices in Amsterdam, Copenhagen, Dubai, Frankfurt, Genoa, Johannesburg, London, Madrid, Milan, Munich, Paris and Zurich.
Senior Appointment at Chubb Singapore
Chubb, the world’s largest publicly traded proper and casualty insurance company has promoted from within for a senior Asian based role.
Olivia Dale has been promoted to Head of Corporate for its Accident & Health (A&H) business in Singapore. Within her new role she will be responsible for strategies and activities to enhance efficiency and grow profitability of the business alongside leading Chubb’s dedicated and experienced team of underwriters to manage and deliver innovative insurance solutions and excellent service to clients and brokers.
Reporting to Koh Wei Lee, Division Head of A&H and Personal Business Insurance (PBI), Olivia Dale joined the team on 2 May.
After joining Chubb in Sydney, Australia in 2010, Olivia brings with her over 16 years of industry experience, her most recent position being Chubb’s underwriting manager- brokerage for Australia where she served as a technical specialist, developing new product benefits and driving profitability for the business.
Validus Re Asia Pacific names new VP
Bringing 18 years of treaty and facultative underwriting experience, Mr Lim Ming Boo has joined Validus Re Asia Pacific as Vice President and Underwriter. As well as focussing on Marine and South-Korean treaties, Mr Lim Ming Boo will also be actively involved in underwriting and development of other Asia treaties.
At the same time, Ms Triana Ding, previously an Assistant Underwriter has been promoted to Assistant Vice President & Underwriter. In her new position, Triana will carry out underwriting responsibilities, focussing on Non-Marine treaty business from Taiwan, Philippines, Japan and China.
Ms Ann Goh has taken on a new role as HR Business Partner, Asia-Pacific. Ann is responsible for all HR Group activities in Asia-Pacific including Validus Re Singapore as well as Talbot’s offices in Singapore, Dubai, Australia and those seconded to Shanghai under the Lloyd’s China platform.
Swiss Re Corporate Solutions appoints Jonathan Rake as CEO Asia Pacific
Swiss Re Corporate Solutions has appointed Mr Jonathan Rake as CEO Asia Pacific, based in Singapore, effective 1 July 2017.
Jonathan joined Corporate Solutions in September 2009 as Head South East Asia and has since managed the company’s growth in that region. Specifically, he oversaw the opening of the Kuala Lumpur office in March 2017, which extended Corporate Solutions' reach and gives brokers and clients in Malaysia local access to innovative solutions and services. An experienced commercial insurance executive, Mr Rake has held positions in Europe, Hong Kong and Singapore.
Mr Rake holds a Bachelor of Commerce Degree from the University of Stellenbosch with Majors in Economics and Commercial Law. In 2014, he was selected as a World Economic Forum Young Global Leader. Mr Rake succeeds Mr Fred Kleiterp, who has been appointed CEO EMEA.
In his new position, Mr Rake will oversee the business and implement the company’s expansion strategy in Asia Pacific. He will also maintain his current responsibilities ad interim until his successor is appointed.
Manulife CEO to Step Down
President and Chief Executive Officer of Manulife, Donald Guloien, is retiring as of September 30.
Guloien steered Manulife through some turbulent financial times, strongly grew its earnings and expanded its Asia and Wealth and Asset Management businesses. After eight years at the helm of Manulife, Guloien will make way for Asia division Head, Roy Gori to lead Canada’s largest insurance company.
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. Gori currently serves as Senior Executive Vice President and General Manager of Manulife’s Asia Division.
As President, Gori will be responsible for the leadership of Manulife's Canadian, U.S. and Investment operations, in addition to Asia and also developing and executing Manulife's business strategy.
“It’s a true honour to be appointed to lead Manulife – a strong, global organization with a tremendous history and quality people,” said Gori.
Phil Witherington, currently the Chief Financial Officer of Asia Division, will become its interim CEO, effective June 5.
China’s Insurance industry's overall solvency position deemed sound
China's insurance industry has kept its risks under control, with a sound solvency ratio, said the country's insurance regulator.
The industry's average comprehensive solvency adequacy ratio stood at 238% at the end of the first quarter, well above the 100% requirement, said CIRC in an online statement yesterday. This compared with 247% at the end of 2016.
Average core solvency adequacy ratio stood at 221%, above the required minimum 50%, indicating sufficient core capital in the companies to meet their obligations.
The risks in the industry is "controllable in general", but authorities should not underestimate risks arising from particular areas, the statement says.
The insurance regulator will place further emphasis on the importance of risk control, and strengthen the sector's role of supporting the real economy, adds the statement.
According to local media reports, solvency reports issued by insurers for the first quarter of this year show that among life and non-life insurers, two life insurers failed to meet the solvency mark.
South Korea insurers see marine business contract by 14% in 2016
Last year, Korean nonlife insurance firms struggled to cope with marine business, reporting direct premiums written of KRW607.99 billion (US$540 million) in this class of business, down 14.26% from the previous year as the shipping sector remained weak.
The General Insurance Association of Korea, which provided the 2016 data, said the contraction was seen throughout last year. The insurers' total direct premiums written for marine insurance shrank by 19.88% in the first quarter of 2016 from the corresponding period of the previous year, 14.33% in the second quarter and 14.18% in the third quarter, reported The Korea Times.
The country’s biggest general insurer, Samsung Fire & Marine saw its premium income more than halved in two years. The insurer reported that marine direct premiums written declined by 38.65% to KRW98.89 billion. Its marine insurance business has shrunk since 2014 when direct premiums written peaked at KRW202.47 billion.
Samsung Fire, headed by CEO Ahn Min-soo, said that it had intended the business contraction.
"Based on accumulated data, we are slashing the number of contracts with high loss ratios and filling the portfolio with contracts with lower risks," a Samsung Fire official said. "Although our marine insurance sales decreased, our profitability improved."
However, the Seoul-based firm refused to disclose data on its improved profitability.
"Marine insurance is not the major business of nonlife insurance companies. Hence, the decreased income in the marine segment would not pose a great threat to any firm," a Seoul analyst said.
"But obviously it is not good news. They would hope to bounce back in the area in line with the recovery of the shipping industry. One uncertainty is that it is not sure when the recovery would happen."
The global shipping downturn has affected Korean shipping companies and shipbuilding yards. In February, Seoul court declared Hanjin Shipping bankrupt. Once among the largest container lines in the world, Hanjin had filed for bankruptcy protection last August with debts totalling US$5.37 billion as creditors refused to bail it out. An accounting firm hired by the Seoul court concluded that the firm's liquidation value would be greater than its worth as a going concern.
Vietnam’s life insurance premiums surge to 10-year high
In 2016, Vietnam’s life insurance market reached a 10 year high with total premiums of over
VND49.2 trillion (US$2.2 billion), an increase of 30.5% compared to 2015, boosting overall growth in the insurance industry by 22.7% to VND86.6 trillion, according to data from the Insurance Supervisory Authority (ISA) under the Ministry of Finance (MoF).
A total of 18 insurers are competing in the life market, among which the five largest hold 86% of total market share, reported Vietnam Economic Times. Among the five largest, four are foreign companies and only one is a domestic company, Bao Viet Life, which has a foreign strategic shareholder, Sumitomo Life from Japan.
In 2016, Prudential Vietnam led the life insurance market with a share of 29.9%, followed by Bao Viet Life with 25.7%, Manulife 12.1%, AIA Vietnam 9.2%, and Dai-ichi Vietnam 9.1%.
Due to market regulations, it is impossible to compete in Vietnam’s life insurance market solely on premiums. All products are subject to close scrutiny from the regulator before being launched and premium levels are set. Players must instead compete on service quality or the provision of value-added packages.
All life insurers have headquarters in Hanoi in the north and Ho Chi Minh City in the south, with most also having branches and representative offices in major cities and provinces.
Dai-ichi has 53 branches and representative offices, Manulife Vietnam 22, Prudential Vietnam 21, and AIA 14. Bao Viet Life remains the only player to cover all 63 cities and provinces in the country.
According to the ISA, life insurers have mainly focused on three of the seven life insurance products in Vietnam: term life insurance, endowment insurance, and universal life insurance. This presents opportunities in unit linked and pension insurance products.
Nearly half of the CIOs in Asia Pacific are investing in digital labour
According to survey data from the 2017 Harvey Nash/ KPMG CIO Survey, 46% of Chief Information Officers in the APAC region report they are currently investing in, or plan to invest in digital labour, cognitive automation or robotic process automation.
The data also showed that despite 68% of APAC organisations adapting their technology strategy because of unprecedented global political and economic uncertainty, 89% are maintaining or ramping up investment in innovation, including in digital labour.
"Technological advances are occurring at an astonishing pace, coupled with the ever changing political and economic landscape, we are living in very exciting, yet unpredictable, times,” Nick Marsh, Managing Director, Harvey Nash Executive Search APAC said. “The 2017 Harvey Nash/KPMG CIO Survey highlights that many technology executives are turning this uncertainty into opportunity and are becoming the driving force in making their organisation more nimble, and digitally innovative. Technology leaders are becoming increasingly influential, as CEOs and boards turn to them for help in navigating through these uncertain times."
Harvey Nash’s data also showed that cyber security vulnerability is at an all-time high, with 36% of APAC IT leaders reporting their organisation had been subject to a major cyber-attack in the past 24 months - an increase of 4% since last year. Across the region, 20% say they are "very well" prepared to respond to these attacks, with 15% of IT leaders reporting they feel exposed and not at all prepared to deal with cyber-attacks. The biggest jump in threats comes from insider attacks, increasing from 40% to 47%
"Organisations have moved on from a world of strategizing and talking about digital, to one in which they are actually making it happen: we are now seeing widespread and active implementation," Ram Lakshminarayanan, Partner, Management Consulting at KPMG in Singapore, said. "However, those organisations which we have identified as digital leaders tend to be much more focused on innovation and growth, they have higher levels of IT spend, and are much more likely to make aggressive investments in disruptive digital technologies such as digital labour, in some cases at twice the rate of all other organisations."
China's Ping An tops insurers on Forbes Global 2000 List
China’s Ping An Insurance Group has been ranked first among insurers on the Forbes Global 2000 list of most powerful companies.
Ping An has moved up from #20 in the 2016 to #16 on this year’s overall list.
Over the 12 month period, until 7th April, when the Global 2000 data was locked in, Ping An generated US$106.6 billion in revenue, $9.5 billion in profits and its market capitalisation stood at $100.8 billion.
The tech-driven company boasted of 131 million customers at year-end 2016, up 20% from the beginning of the year, with nearly a quarter of the newcomers coming in online.
Germany’s Allianz ranks #2 among insurers, staying at #21 overall on the Forbes Global 2000.
After posting strong 2016 results, Allianz announced a share buy-back of up to $3 billion over the next year to return unused funds once targeted for acquisitions.
France’s AXA Group, ranked #3 (#27 overall), just announced a big change as part of its Ambition 2020 transformation plan: its intention to launch an IPO for its US operations, specifically its life and annuity units and its interest in struggling asset manager Alliance Bernstein.
Forbes says that these top three insurers are diversified players, with life & health, property & casualty, and financial services divisions. Among the world’s 25 largest insurers, China, Japan and the US each house four, Switzerland and the United Kingdom house three, Germany has two, and Canada, France, Italy, Hong Kong and Taiwan each claim one spot.
The Forbes Global 2000 ranking, released last week, is based on a composite score from equally-weighted measures of revenue, profits, assets and market value.
Sri Lanka reinsures natural disasters with Renaissance Singapore
Sri Lanka has selected Renaissance Reinsurance Singapore as the lead reinsurer of the national natural disaster and emergency relief insurance scheme for the year 2017/18.
This cover was introduced in 2016 for natural disasters covering the whole country, and payments of claims have been expanded to include a range of accidents due to natural disasters.
The policy will be renewed with a cover of 15 billion rupees, and to prevent any abnormal losses to this policy, it has been reinsured under global reinsurance firms. The policy is backed by other reinsurers including Lloyds of London.
The decision was made after it was recommended by the technical evaluation committee and cabinet appointed procurement committee.
‘A’ rated reinsurers have been selected based on financial ratings provided by S&P, Moody’s and A.M. Best.
Minister of National Policies and Economic Affairs, Prime Minister Ranil Wickremesinghe, said that 500 million rupees has also been allocated for further improvement of this scheme.
The scheme covers lives and properties, specifically all households and small business establishments and damage caused to their property and contents due to cyclones, storm, tempest, flood, land slide, hurricane, earthquake, tsunami and any other similar natural peril, excluding drought.
Any business for which annual turnover does not exceed 10 million rupees is covered up to 2.5 million rupees each in respect of damages per event.
Under this scheme, compensation for death other than for fishermen is 100,000 rupees, property damage (House and SME) maximum is 2.5 million rupees.
During the last few years Sri Lanka has faced natural disasters and as a result loss of human life and damages to property has been significant.
To overcome such issues, the natural disaster insurance scheme was implemented through National Insurance Trust Fund in April 2016.
The 2016 reinsurance premium paid was 336 million rupees and National Insurance Trust Fund is expected to recover 2.7 billion rupees from the overseas reinsurers.
The first quarterly installment of the annual net premium of 816 million rupees is now due and cabinet approval has been granted to pay it in four installments.
Allianz still eyeing takaful ops
Allianz Malaysia Bhd is still keen on venturing into the takaful business and will continue to lookout for such opportunities. Talks to purchase HSBC Amanah Takaful were discontinued recently as both parties were unable to make an agreement on the price of the acquisition.
Speaking after the group’s AGM, Allianz Malaysia CEO Zakri Khir said the group is not currently in talks with any parties.
“We will eventually find something that we like, at the right price. We will find a fair price – we are not going to pay exorbitant prices. So far, we have not initiated any talks with anyone yet,” said Zakri. He added that takaful penetration rate in Malaysia is low, at an estimated 15%, when compared to the number of policies in the population.
Going forward, Allianz Malaysia expects its life insurance business to grow, while the non-life insurance segment to remain stable. The first and second quarter of 2017 will remain challenging, though 2017 is expected to be a better year than 2016.
Despite the economic challenges last year, Allianz Malaysia managed to deliver a gross written premium of RM4.2bil and a record high pre-tax profit of RM454.6mil, by diversifying its products and channels. Its new business value rose 45% last year.
The group’s target for the year is to achieve a “close to double-digit” revenue growth and double-digit net profit growth.
Allianz Malaysia is also banking on the growth potential stemming from the relatively low insurance penetration rate of 57% in Malaysia.
Allianz Life Insurance Malaysia Bhd CEO Joseph K. Gross noted that awareness would drive growth in the insurance industry, particularly when Allianz Malaysia begun to digitise its products to make it more transparent and easier for people to understand.
“It is the customer experience that plays a vital role in gaining a higher insurance penetration rate.
If you radically improve the customer experience, which means simplifying and demistifying the products, making them easy to purchase and service, the price will not be the most critical parameter. It will be the value for money that people see. Take a look at any digital industry that has been growing explosively – it is driven by customer experience and simplicity, not price,” said Gross.