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General Insurance Company In Malaysia - Emerging Foreign Multinationals

General Insurance Company In Malaysia

Almost every international insurance company has looked at opportunities in Asia and by now, most have some sort of presence. By the beginning of 2008, of the top 30, listed, non-Asian insurers in the world, 25 had established some form of life insurance operation in one or more Asian countries. Allstate, Great-West, Power, Loews, and Lincoln National are the only five insurers out of the top 30 not to have any Asian presence.

Large Insurance Companies In US - Well Established Foreign Multinationals

Large Insurance Companies In US

A handful of foreign multinationals such as AIG, Prudential (UK), ING, and Manulife, already have a sizeable share in a number of Asian markets and generate a significant proportion of their global profit from this region. However large their current market positions, these players still only occupy a small share of the overall Asian market, but their future growth potential remains very significant. Total market share of all foreign players across Asia is 25 percent in 2008, and we see this increasing to 30-35 percent within the next 10 years.

The leading multinational players share a number of characteristics. They all have big positions in the "first generation" of Asian markets that have been open to foreign companies (for example, Hong Kong, Singapore, and Taiwan), while some have been first movers in emerging markets such as Indonesia, the Philippines, and Thailand. They have built most of their operations organically, with only a handful of acquisitions over the years. All of them have built sizeable Asian management teams which are headquartered in Hong Kong.

Life Insurance Companies In Asia - Smaller Foreign And Local Players

Life Insurance Companies In Asia

Chasing the large incumbents are the smaller foreign and local players. Most of these players have a much shorter history than the incumbents, and they have accumulated only single-digit market shares over several years. The strategic imperatives for these players depend on whether they are in more mature or nascent markets.

Life Insurance Growth In India - Creating New Growth Horizons

Life Insurance Growth In India

Beyond improving the core, which inevitably takes years to complete (and is very much an ongoing effort), incumbent insurers in Asia need to rebuild momentum and develop new growth options. They can look at new channels or business models, other businesses in financial services, and other markets to expand into. The challenges involved in making this work are enormous and cannot be undertaken where there is risk of undermining the core business or removing the focus away from the required improvements stated above.

The Asian life insurance incumbents are still relying largely on their massive sales forces - which are simultaneously a strength and a weakness. Of course, the enormous selling power of these agent forces is a huge advantage that incumbents need to build on. At the same time, other channels, notably bancassurance, have grown much faster than the agent channel in general. The often lower qualifications of incumbents' agents, compared to some attackers in the market, tends to hinder them when they try to sell the faster growing products such as investment-linked or health insurance. Across the region, local incumbents have a much lower share in bancassurance and alternative channels than in the agent channel. This might be surprising at first glance, but can be explained by the difficulty in managing channel conflicts. The agent sales forces usually have substantial internal power in these organizations that allows them to push back at the development of competing channels.

Health Insurance Deductible Self Employed - Sustaining Margin Pressure

Health Insurance Deductible Self Employed

We believe it is unlikely that the current high levels of profitability in Asia's life insurance business, relative to the more developed Western markets, will be sustainable in the long run. Competition is already eating away at profit margins and will continue to do so. This has been most visible in bancassurance, where the banks have squeezed the margins of the Life insurers. On the other hand, in the agent channel and in more traditional life insurance, many of the features of life insurance products continue to be opaque to customers, so the compression of margins will most likely be a much slower process. While the margins of Asian life insurers will gradually decrease in the long term, in the context of global Life insurance, this region will still be significantly superior in terms of profitability in the years to come.

Insurance Agency Acquisition - Organic Growth Or Acquisitions

Insurance Agency Acquisition

We are often asked whether an organic expansion or an acquisition is the best entry model in Asia - and obviously there is no single answer. First, it depends on the market. In general, acquisitions are the preferred option in the more mature markets where organic expansion is very difficult for latecomers and will take a long time. In the high-growth markets on the other hand, such as China and India, and also Vietnam, organic growth is a more likely vehicle for success.

Management Roles In Business - Strengthening the Management Bench

Management Roles In Business

The insurance industry has under-invested in management talent for decades. This contrasts sharply with the banking business. Until very recently, no insurance company would have shown up on a list of preferred employers at top business schools. Furthermore, compensation was generally less attractive than in other parts of the financial services industry. This is driven partially by the retail nature of the business with a strong focus on mass operations - but it has clearly become an issue for the industry at large, and Asia is no exception. The most aggressive players have already begun to change - globally and in Asia - and have identified talent as a key success factor for further growth and value creation.