Round-up of the latest news and developments from the Asian insurance market with stories from Anbang, BMS, AXA and more.
Former Anbang chairman sentenced to 18 years in prison
Former chairman of Anbang Insurance Group, Wu Xiaohui, has been sentenced to 18 years in prison for fundraising fraud and embezzlement of corporate funds.
The Shanghai First Intermediate People’s Court also ordered the confiscation of RMB10.5bn ($1.7bn) in assets from Wu, according to state news agency Xinhua.
Wu initially struck a defiant tone in court, denying the charges against him, but in late March relented and “expressed deep self-reflection, understanding of and regret for the crimes and expressed deep remorse for his actions”, according to an official summary from the court in Shanghai.
He potentially faced life in prison, with prosecutors accusing him of defrauding investors by diverting billions from the sale of investment products to related companies he personally controlled.
A series of investigative reports on Anbang in 2017 by Caixin, a Chinese financial news magazine, prompted suspicions that senior Communist party leaders were targeting Wu. His downfall is the latest for China’s financial sector, which since 2016 has endured a sustained crackdown on foreign acquisitions amid worries about capital flight and currency weakness.
BMS hires Wilkinson as Australia COO; Godden begins as Australia CEO
Specialist (re)insurance broker BMS has appointed Dylan Wilkinson as COO of its Australian operations as Andrew Godden begins his role as Australia CEO.
In 2003, Godden co-founded Specialist Broking Associates, which was later acquired by AJ Gallagher in 2010, with Godden becoming CEO of Australia for the combined operation.
News of Godden’s hire came last year, when BMS said that his appointment will further enhance the significant reach it has been developing in Australia and across the Asia Pacific region, which is based on its commitment to offering its clients an individually focused level of service. He reports directly to BMS Group CEO Nick Cook.
Meanwhile, Wilkinson was latterly director of operations at The Corporate Playground, having previous held similar senior roles with wealth manager AMP. BMS said that Wilkinson’s hire demonstrates its commitment to “building a formidable organisation able to offer outstanding client service.”
Cook said: “BMS has been building its reputation in Australia and Asia Pacific as an independent, employee-owned broker that provides an outstanding level of tailored services to clients. That an individual of Andrew’s calibre has joined our efforts is testament to BMS’s success.
“BMS is absolutely committed to developing an impressive client led operation throughout the region and we are demonstrating this with our investment in an operational leader of Dylan’s experience. I am very pleased to welcome both Andrew and Dylan to BMS and look forward to continuing our successful build-out together.”
AXA Insurance names Goh as MD of life strategic business unit in Singapore
AXA Insurance Singapore has appointed Sean Goh as managing director of its life strategic business unit.
Goh succeeds Neil Frith who will be moving to a new position within the International & New Markets (INM) transformation team based out of Madrid, Spain.
During his five years at AXA, Goh worked in Indonesia before relocating back to Singapore in 2015 to lead partnership distribution. During this time, he has focused on growing AXA’s exclusive postassurance partnership with Singapore Post, expanding AXA’s portfolio of partners across various industries, and driving the strategy for the company’s entry into the very niche high net worth customer segment.
Goh’s previous portfolio will be reorganised among the existing executive committee, and he will continue to manage the high net worth and direct life portfolios.
AXA said that a smooth transition between Goh and Frith will take place over the coming weeks.
Commenting on the appointment, AXA Insurance Singapore CEO Jean Drouffe said: “Sean’s appointment and the reorganisation of portfolios among the members of the executive committee come at an opportune time for AXA Insurance as we evolve the way we operate to continue our growth journey in Singapore.
“I am confident that the changes will position us to better serve our customers and community and partner with our distributors.”
“On behalf of the Singapore team, I would like to thank Neil for his spectacular contributions,” he concluded.
Insurers must prepare for digital revolution: Dominguez
Philippines finance secretary Carlos Dominguez has called for the insurance industry to adapt to technological advances and prepare for the digital revolution.
In an address at the 2018 East Asian Insurance Congress, Dominguez told attendees that the insurance industry should be at the “forefront and centre” of technological changes driving our economies.
“Insurance is among the most closely regulated as well as the most benefitted by technological advances," he said.
“The industry ought to explore new products that will not only mitigate risks for corporations but also mitigate risks for communities vulnerable to natural calamities. This is one area where business opportunities and social consciousness converge quite nicely," he added.
Dominguez noted that insurance and other financial services stand to benefit from technological advancements.
The two industries could “become more efficient, accessible and innovative, leading to shorter transaction time and the ability to quickly exchange data between institutions, which, in turn, would make new products possible, and hence, greater financial inclusion.
Indian government considering 100% FDI in insurance intermediaries: reports
The Indian government is considering allowing 100 percent foreign direct investment (FDI) in insurance intermediaries, according to reports.
Citing sources, The Economic Times of India said that the move would serve as a boost to the sector in attracting more funds.
At present, the Indian government’s FDI policy allows a maximum of 49 percent foreign investment in the insurance sector, which includes insurance intermediaries. The intermediary services include insurance broking, third party administrators, surveyors and loss assessors.
The publication noted that its sources had also said that there is a need to de-link the FDI cap in insurance intermediaries from that for insurance companies.
Representations have been made to the government that these intermediary services should be treated at par with other financial services intermediaries, where 100 percent foreign investment is permitted.
Singapore online broker offers first cryptocurrency storage insurance
Singapore’s first online broker, Insurance Market, has arranged insurance for customers that store cryptocurrencies with The Safe House, a vault facility owned by Singapore bullion dealer Silver Bullion.
In what he describes as a “first of its kind”, Insurance Market CEO Otbert de Jong said this development will provide holders of cryptocurrencies the safest way to store their private keys to protect their wealth.
Owners of cryptocurrencies have “Private Keys” that act, simply said, as a password to their account. Whoever holds the private key can avail of the balance in an account, so the safekeeping of Private Keys is of the utmost importance. Loss or theft of a private key is disastrous.
The Safe House has developed a unique safe “physical crypto storage” process that has become widely recognised standard, known as the Gregersen-Gono standard. That process has been assessed by Lloyd’s underwriters, who have given it the thumbs up by insuring the stored private keys and the account balances they represent. Insurance Market worked intensely with Silver Bullion, the Safe House and the Lloyd’s underwriters to structure this facility to enable people to safeguard their assets.
Insurance Market said that although the focus of its brokerage activities is digitised online insurance, this type of insurance will also serve the needs of personal clients with digital interests. Cryptocurrency holders run risks that they need to protect and that is the essences of what both Silver Bullion and Insurance Market enable here: to protect people’s wealth and health, said Insurance Market CTO Nelius Strydom.
Insurance Market was in the news last month when it announced that it will act as sponsor and lead of a group of insurance companies and distributors that will participate in the further development and roll-out of the new pilot insurance eco system “Inmediate” that will make insurance cheaper, easier and more accessible, using blockchain smart contracts.
“The insurance we have obtained has comprehensive coverage that protects crypto currency owners from loss of their stored private keys. I believe it will give our customers peace of mind knowing that their crypto wealth is truly secure with us,” said John Tay, director of The Safe House.
“We have had this type of insurance in place for bullion for years but private keys insurance for crypto accounts is a novelty.”
Physical crypto storage is used in the cryptocurrency world by investors who want to preserve their digital assets for a long-term investment. Keeping them at exchanges and hosted wallets puts them at risk of losing all coins in an instant. Physical crypto storage entails generating and storing the crypto coin’s private keys in an offline environment such as a vault, away from the internet.
Call to tread carefully around gimmicky insurance products in China
The boom in niche or gimmicky insurance products offered online in China has some industry experts worried, according to reports from Xinhua News Agency.
Adventurous eaters can buy a policy for CNY9 (US$1.40) that pays out up to CNY1,000 a year for medical expenses if the policyholder gets acute food-related gastroenteritis.
Another policy offers a payout of up to CNY2,000 for accidental injuries that occur within a period of up to three months, with policies available for less than CNY1.
Other products offer returns to pay vet bills for sick pets, broken phone screens, and cosmetic surgery accidents.
Around 12.5 billion online insurance products were bought in China last year, twice the number of sales made in 2016. Among which accident insurance sales experienced a five-fold increase, with the number of policies sold rising to 1.6 billion. And liability insurance products had a more than four-fold increase, with over one billion policies sold.
The boom in public interest in insurance products has led various Chinese Internet giants to join in the competition for customers, including Alibaba, Tencent, Baidu, and JD.com.
According to Chen Jin, CEO of the online insurer ZhongAn Insurance, the spread of the Internet is leading to positive change in the insurance industry, bringing growing opportunities for sales of personalised insurance products.
However, some experts are calling for consumers to be cautious when purchasing online insurance products, warning that they may be buying into illegal fund-raising schemes.
In early 2017, the CIRC (now the CBIRC) issued the guidelines for the development of insurance products, listing products insurance companies shall not develop, which include gimmick products that speculate in concept and have no substantive content or meaning.
Xia Xuemin, a professor from Zhejiang University, suggests establishing an official blacklist and credit system for online insurance providers.
SBI General Insurance aims for IPO in 2019/20
Indian private insurer SBI General Insurance is aiming to launch its initial public offering (IPO) in 2019/20 after posting its maiden underwriting profit for the financial year ended 31 March 2018 (FY2018).
In an interview with Moneycontrol, SBI General Insurance MD & CEO Pushan Mahapatra said that the company, which is a subsidiary of State Bank of India, expects to come out with its IPO during FY2020, adding that its promoter State Bank of India has said that the IPO process will be conducted in FY2020.
This comes after SBI's life insurance arm was listed in September 2017.
The company posted net profit of INR3.96bn ($59mn) in FY2018 compared to INR1.53bn in FY2017. This was primarily due to an extraordinary income of INR1.31bn, said Mahapatra.
“Moving towards an underwriting profit for the first time has been a positive development. Over and above this, we have also recorded a lower loss ratio and minimised our operating expenses further. In terms of the accumulated losses, a little over INR500mn remains which will be wiped off,” he explained.
In FY2019, SBI General expects to grow further in health, motor as also the small and medium enterprises segment, Mahapatra added.