AIA, Manulife acquire SEA insurers

MANILA, Philippines - Multinational insurance companies are now becoming making huge investments in the so-called emerging Southeast Asian markets. 

According to Seeking Alpha, Southeast Asians are increasingly coming to understand the merits of insurance in the past five years. 

In fact, the AIA Group, Manulife Financial Corp. (MFC) and Prudential Plc (PRU) are competing for mid-size acquisitions in the Southeast Asian region totaling up to $1 billion. And there are smaller insurance companies that are now starting to do initial bidding on different sectors of the Southeast Asian insurance market. 

Last December, the AIA Group completed its acquisition of ING Malaysia Insurance Asia, the third largest insurer in Malaysia with the addition of more than 1.6 million clients and 9,200 new agents to its network in the Southeast Asian nation. 

Seeking Alpha said that the transaction involved the acquisition of the entire issued shares in ING Malaysia, an investment of approximately 1.34 billion euro ($1.73 billion), which was paid in cash on completion. The acquisition of ING Malaysia represents an attractive opportunity with strategic and financial benefits for AIA Group. 

The sale of ING Malaysia came as part of the plan to repay the remaining three billion euro ($3.84 billion) it still owes in state aid.

In 2008’s economic crises the European Union (EU) granted ING 10 billion euro ($12.7 billion) and a further five billion euro in 2009 in state aid. 

There was a time when Vietnam was one of the new frontiers of insurance in the Asia Pacific, but the sector has moved into a more exciting phase of its development. 

Foreign insurance companies – particularly in the life segment – see Vietnam as a natural extension of their regional or global footprints. New products are being developed. Agency networks are being built. 

HSBC Brokers Corp. (HBC), in association with its strategic partners Baoviet Insurance and Bao Viet Life, unveiled a new bancassurance product enabling HSBC customers to protect their whole family while planning for the future. Family Endowment Universal Life is a groundbreaking policy, which covers three generations of a policyholder’s family and offers higher interest rates, superior benefits and greater flexibility than standard insurance products in the market place. 

Meanwhile, Manulife Vietnam, one of the top-three life insurers in Vietnam, officially launched two new universal life (UL) products named “Manulife-My Dream,” designed for younger customers, and “Manulife-My Love” for people age 40 and above. 

Manulife-My Dream is targeted to younger customers while Manulife-My Love is designed to appeal to middle-aged people. With Vietnam’s demographics heavily weighted under 35 the former product is an extremely important one to Manulife’s strategy. 

In addition, Manulife Vietnam’s agency force development continued in the third quarter, with around 3,500 new hires. Selecting new agents carefully and providing them with professional training remains a key focus of the company’s development strategy. 

Manulife Vietnam had a network of over 11,200 professionally qualified agents at the end of the third quarter. Trained staff is one of the real challenges to business growth here in Vietnam. 

Vietnam is one of the fastest growing insurance markets in the world. It has seen double-digit growth for the past few years and it is expected to witness the same growth trend in the coming years also. 

Thus, Vietnam’s insurance market is expected to grow at a CAGR of 22 percent during 2011-2014. Insurance premiums this year totaled VND40.858 trillion ($1.946 billion), representing an increase of 11.7 percent over 2011.