Zurich Financial expects emerging markets to add more in new life business

Wednesday, 14 December 2011 01:18 - - {{hitsCtrl.values.hits}}

SINGAPORE (Reuters): Swiss insurer Zurich Financial Services AG expects emerging markets to account for about half of its new life insurance business by 2013 as it seeks higher growth opportunities at a time when developed economies are slowing down, its Chief Executive said on Monday.

This was higher than its previous target of 30 per cent, said Martin Senn, CEO of Zurich Financial. He added that the group’s emerging market operations contribute about 26 per cent currently.

However, this does not include the acquisitions of Malaysian Assurance Alliance Berhad in September and a 51 percent stake in the life insurance, pension and general insurance operations of Banco Santander SA in Brazil and Argentina, which it bought in October.

“If we include that and we take the current projections, by the end of 2013 we’re looking more at 50 per cent,” Senn said.

Zurich Financial, which focuses on the emerging markets of Latin America, the Middle East, and Asia-Pacific, estimates that the latter will make up about one-fifth of its new life insurance business, said Graham Morrall, the chief executive of its life insurance business in Singapore.

In Asia, Zurich Financial will expand into newer markets such as Malaysia and Indonesia, while consolidating its presence in Australia, Japan, Hong Kong and Singapore.

“We are putting high emphasis on the expansion in Southeast Asia, in particular into Malaysia, Indonesia, and there are additional good growth opportunities in Singapore as well,” said Senn.

Zurich Financial has also applied to set up a subsidiary in Singapore and a full license giving it access to sell a greater variety of life insurance products to a wider group of investors.

“This will give us full-fledged access to expand our offerings in the life products, protection, retirement savings solutions, etc.,” Senn said.

The insurer can now only target investors who are able to invest more than $ 5,000 a year for 10 years or more in Singapore, meaning its customers are mainly expatriates or high net-worth individuals.

With its expansion plans for the city-state, Zurich Financial aims to double its premiums generated in Singapore over the next three years, Senn added.

He declined to disclose how much operating profit it derives from the country.