Asia Arrive, Survive, Thrive William Liang, Matt Hodson, Hardik Dalal & Merry Tang Ernst & Young

Transcription

1 Asia Arrive, Survive, Thrive William Liang, Matt Hodson, Hardik Dalal & Merry Tang Ernst & Young This presentation has been prepared for the Actuaries Institute 2012 General Insurance Seminar. The Institute Council wishes it to be understood that opinions put forward herein are not necessarily those of the Institute and the Council is not responsible for those opinions. 1

2 Agenda Why Asia? Why now? Arrive Survive Thrive 2

3 Why Asia? Why now? Increasing global importance and growth prospect Several recent entrants/expansion into Asia by local and overseas insurers Some common challenges across the market Australian experience could be useful Previously discussed over 5 years ago at an Institute seminar 3

4 Arrive The markets Main lines of business Foreign ownership & participation 4

5 Population (mil) Insurance premium by market India (pop: 1.2bil) ID PH VT China (pop: 1.4bil) JP TH 50 MY TW NZ HK SG AU 0 0% 1% 2% 3% 4% 5% 6% -50 Penetration (premium % of GDP) *Size of the bubble indicates the insurance premium for the market Australia (AU) Hong Kong (HK) Japan (JP) South Korea (KR) New Zealand (NZ) Singapore (SG) Taiwan (TW) Malaysia (MY) Thailand (TH) Indonesia (ID) Philippines (PH) Vietnam (VT) Source: Bank of Japan, Reserve Bank of Australia, New Zealand Treasury, Asian Development Bank, Swiss Re, Axco Report, Ernst & Young Internal Research KR 5

6 Main lines of business 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% WC Fire 11% Motor 36% PA & Med Fire 17% Motor 47% Casualty 23% Property 30% Motor 32% Liability Fire 7% Motor 77% Industrial risk PA 10% Motor 60% Surety Casualty 21% Motor 65% Marine Motor 29% Property 31% Property 21% Liability 23% Accident & Health 27% Property 19% Liability 16% Motor 38% 0% Singapore Malaysia Philippines China Thailand South Korea Indonesia Hong Kong Australia Source: various regulatory returns, Ernst & Young Internal Research 6

7 Foreign ownership & participation (1) Category Market Foreign ownership limits in GI companies Mature Developing Emerging Australia 100% Hong Kong 100% Japan 100% South Korea 100% Singapore 100% Taiwan 100% China 100% India <50% Malaysia >50%* Thailand <50%* Indonesia >50% Philippines 100% Vietnam 100% * Limit can be exceeded, which requires case-by-case approval by the local regulator Source: Thomson Reuters 7

8 % of insurers that are foreign Foreign ownership & participation (2) 80% IN 70% 60% China (CN) 50% TW KR India (IN) 40% VT MY CN TH Indonesia (ID) South Korea (KR) 30% ID Malaysia (MY) 20% 10% Taiwan (TW) Thailand (TH) Vietnam (VT) 0% Number of insurers Source: Ernst & Young 8

9 Arrive summary Rapidly growing markets with significant untapped customer base/demand Changing foreign ownership rules Dominated primarily by personal lines products currently will evolve as economies further develop 9

10 Survive Regulatory environment Distribution Customer behaviour 10

11 Regulatory environment Source: Ernst & Young 11

12 Cost of acquisition Vietnam Thailand Indonesia Distribution Malaysia Taiwan China India Japan Australia UK South Korea Tied agents Growth of brokers Growth of branch networks Growth of non-face to face - telephone Growth of internet Source: Ernst & Young Maturity 12

13 Customer behaviour Source: Ernst & Young Global Insurance Consumer Survey

14 Survive summary Regulatory environments, including capital management are evolving quickly Product distribution is heavily geared towards agents/intermediaries c.f. Australia Brand is of key importance 14

15 Thrive Distribution develop and enhance distribution to meet consumer demand Talent manage the human resource challenge Risk and regulation address rapidly changing regulatory framework 15

16 Contact details Matt Hodson Hardik Dalal hardik.dalal@au.ey.com William Liang william.liang@sg.ey.com Merry Tang merry.tang@au.ey.com

17 Thank you Questions? 17