In this exclusive interview with Asia Insurance Review, Mr Fate Chang, President of Cathay Life Insurance, Taiwan, shares about the challenges of operating in the Mainland and his plans to transform the company from a leading Taiwanese financial institution into a regional player in the international arena.
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South Korea is not sitting on its laurels. Despite being Asia Pacific’s second-largest market both in life and P&C classes, the government wants more and promises to loosen its hold of the industry. The dynamically innovative life sector rides high on its premium growth, as does the non-life sector, despite falling one notch to 10th place as the world’s largest non-life insurance market. Both classes remain dominated by chaebol players – but foreign life insurers are slowly showing that they can shake this dominance.
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South Korea’s regulatory body, the Financial Supervisory Service, is one to watch out for – as President Lee Myung Bak’s Government promises to ease some key restraints in the country’s financial regulation. It is set to usher in changes to the market, and the insurance industry is ready to partake in this boon. Our Journalist, Ms Manuelita Contreras, finds out more from Mr Kang Young Goo, Assistant Governor and Head of Insurance Service Division, FSS.
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The South Korean non-life sector fell one notch to being the world’s 10th largest non-life insurance market last year. Yet it delivered a strong premium growth – surging by 12.4%. The “big five” keep their foothold in the market as they are poised to broaden their clout with reforms that the Government is set to usher in to push them into the global arena. Our Journalist, Ms Manuelita Contreras, presents an update on the market.
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The Korean reinsurance market remains resilient in the face of high-profile losses that have plagued the market in recent years. We speak to key reinsurers who say that despite the generally softening rates, the market remains very profitable and Korea is still one of the key reinsurance markets in the region.
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The long-time dominance of chaebol insurers, fierce competition, years of robust performance, and relatively high penetration rate may seem to have brought the South Korean life market to a dead end. Our Journalist, Ms Manuelita Contreras, finds out, however, that the sector has found new ways and opportunities to keep its growth and buoyancy going.
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Push and pull. This is the scenario the expansion of bancassurance has created in South Korea’s insurance market. After three pushes of expansion, the National Assembly’s Finance & Economy Committee pulled the planned fourth phase in February after much opposition that saw hundreds of industry people taking to the streets and key players clamouring for the plan’s scrapping. Our Journalist, Ms Manuelita Contreras, finds out more.
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Mr Chihong An, Managing Director (Seoul) for Milliman, looks at how alternative distribution has evolved in the Korean insurance market, as companies shift their focus to profitable and sustainable business, having learnt the harsh lessons from the Asian currency crisis.
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It is a challenging world brokers have in South Korea. Cutthroat competition and a market that is just beginning to appreciate the value of brokers are key hurdles they have to overcome. Asia Insurance Review talked to Marsh Korea and Komill Global Service (KMGS) to gain insights into the market and the country’s broking practice.
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Solvency II will be implementing a risk-based, forward-looking approach that will change the way insurers are supervised and should ultimately lead to a more efficient, competitive and innovative global insurance market.
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In the wake of accounting scandals and with Internet fraud, identity theft and money laundering on the rise, the regulatory environment worldwide has tightened considerably.
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In this thought-provoking article, Mr Kunihisa Kawasaki from Mitsui Sumitomo Insurance Co, shares his views on the need for the IAIS Reinsurance Subcommittee to send a clear, strong signal on how things will be changed for the better, and for markets to embrace reinsurance mutual recognition.
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In this article extracted from the Geneva Papers, Mr Philippe Trainar of SCOR highlights four key reasons why life insurance is an ideal instrument to supplement the pension market in today’s rapidly ageing society.
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The team at Barlow Lyde & Gilbert identifies present and future risks which could translate into the next big claims issue to be experienced by the industry.
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Settling claims is the raison d’etre of insurance companies. It is the critical moment of actual delivery of the “promise to pay”.
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Although the global economic slowdown and this year’s painful credit crunch have put the brakes on merger-and-acquisition activity in Asia, the team at Whittington Asia Pacific believes that regulatory reform will continue to drive consolidation in the region.
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The number of takaful players has increased manifold. Premiums collected by takaful operators have passed the US$2.5-billion mark from almost nothing. We take stock of the takaful industry today, zeroing in on the deadly seven worries ailing the market.
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Aon has acquired Benfield for £3.50 (US$6.55) per share in cash and will assume £91 million of Benfield’s net debt, representing an enterprise value of approximately £935 million on a fully diluted basis.
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Asian cities like Hong Kong, Karachi, Kolkata, Mumbai, Shanghai and Tokyo, as well as other metropoles such as London and New York, are under threat from rising sea levels caused by climate change, according to a report published by Lloyd’s, and catastrophe risk modelling firm Risk Management Solutions (RMS).
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Five Asia-based companies were rated among the world’s 20 largest reinsurers in 2007 in terms of net reinsurance premiums written, said a Standard & Poor’s report.
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The general insurance sector in Australia, which saw profits fall by a fifth in the fiscal year to 30 June, faces a tough year ahead with severe weather events, continuing volatility in the stockmarket and competitive pressure, according to the annual insurance survey of the international accounting firm KPMG.
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China has established a company to manage the country’s insurance protection fund in order to protect policyholders when insurers go bankrupt, and companies that take over insolvent insurers.
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The total number of foreign insurers in China is expected to reach 70 by 2011 from fewer than 50 at present, with their overall market share to expand from 6% to 10% in the same time frame, according to a survey by international accounting firm PricewaterhouseCoopers.
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Hong Kong’s general insurance business gross premiums grew 10.1% to HK$14.3 billion (US$1.8 billion) in the first half of the year, but overall underwriting profit fell by 19% to HK$826 million, said the territory’s insurance regulator, the Office of the Commissioner of Insurance.
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The Group of Ministers (GoM) has finalised its recommendations on insurance sector reforms which include raising the foreign investment ceiling in the industry to 49% from the existing 26%.
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The Federation of Indian Chambers of Commerce and Industry (FICCI) is developing healthcare standards aimed at giving healthcare cost indications to insurers, according to Mint newspaper.
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Indonesian insurers may need to take care of their employees better as the Indonesian insurance industry’s turnover rate was 14.8% in 2007, and is expected to hit 10.7% in 2008 – both ranking the highest compared to other sectors in the past two years, said a study by the global management consulting firm Hay Group.
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The premium rate of the government-run health insurance programme for employees of small and mid-size companies for the fiscal year ending 31 March 2009 may have to be hiked by as much as 8.5%, reported the Yomiuri Shimbun citing the Health, Labour and Welfare Ministry.
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Sales of insurance policies over the telephone and via the Internet are rising considerably now that banks are handling more insurance products due to relaxed regulations. This increase is worrying for major insurers that traditionally rely on sales staff and agencies to sell their products.
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Malaysians are generally cautious when it comes to investing their money, opting to keep their cash in “safer” mediums such as a savings account rather than “riskier” mediums such as stocks or other investment vehicles, according to the results of Aviva’s Consumers Attitudes to Savings 2008.
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MNRB Retakaful is set to extend its reach into the rapidly growing takaful markets in Indonesia, said its Chief Executive Officer, Mr Ismail Mahbob.
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Arab Insurance Group’s (BSC) (Arig) CEO Yassir Albaharna has been elected as Board member of the International Insurance Society (IIS). Mr Albaharna is the first Arab insurance company executive to be elected to the Board of the IIS.
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Insurers in the Philippines have warned that premiums will be increased to make up for a 15-peso (32 US cent) documentary stamp tax to be imposed by the Government on certificates of insurance, according to news reports from Manila.
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AXIS Capital Holdings Ltd’s (AXIS Capital) Bermuda operating subsidiary, AXIS Specialty Ltd, has received regulatory approval from the Monetary Authority of Singapore to operate as a branch insurer underwriting general insurance business in the Republic. AXIS Specialty Ltd has maintained a representative office in Singapore since 2004.
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The number of claims lodged with the Motor Insurers’ Bureau of Singapore (MIB) over the last three years (2005 to 2007) showed a noticeable increase of 26% over the earlier three years (2002 to 2004), said the MIB in its annual report. Claims increased from 411 to 518 claims.
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Sri Lanka has to allow its ageing workforce to work longer, or its weak economy could find it extremely difficult to support the elderly population which will grow to be as large as the ageing populations of Europe or Japan today, but with much lower incomes, according to the World Bank.
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The Ministry of Justice recently submitted a revision bill aimed at keeping increasing cases of insurance fraud in check.
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Life insurers in Taiwan lost NT$58.8 billion (US$1.84 billion) in the first half of the year, largely because of the plunge in the stockmarket, according to the Taiwan Insurance Institute.
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As part of its developmental activities, Asian Reinsurance Corporation (Asian Re) conducted its annual seminar on “Principles and Practice of Reinsurance” in Bangkok which was attended by 29 participants from 10 Asian countries. This was held at the end of August.
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Mitsui Sumitomo Insurance Company, Ltd (MSIG) has become the first Japanese general insurer to establish a wholly owned subsidiary in Vietnam after receiving a licence from the Vietnam Ministry of Finance.
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Improved living standards and growth of the service sector will speed up the development of the Vietnamese life insurance market, which is forecast to grow by 15% this year, said the Vietnam Insurance Association.
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The latest unravelling of the financial markets, hit by the global sub-prime crisis and mortgage-related woes in the US came with the collapse of two of Wall Street’s oldest investment banks, Lehman Brothers Holdings and Merrill Lynch on 15 September, sending stocks tumbling worldwide and heads rolling in the US’ financial markets.
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The insured losses to onshore properties in the US from Hurricane Ike are expected to amount to US$10 billion, according to estimates from the catastrophe risk modelling firm AIR Worldwide Corporation.
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The European Insurance and Reinsurance Federation (CEA) stressed that European insurers face only limited exposure to turbulence in the US.
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As the spotlight is flashed on the volatile primary insurance market of late, reinsurers have escaped relatively unscathed and, according to Moody’s, the industry remains “Stable”.
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As a curtain raiser to this year’s 15th Indonesian Rendezvous to be held in Bali, Indonesia, we trace the issues and trends that emerged from previous years’ meetings and looks at what this year’s event will discuss and aims to achieve.
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