Best's Review


Life Insurance
Lands of Opportunity

Rising ranks of the middle class, wealth creation and an existing protection gap make Asia’s lucrative insurance market ripe for multinational players to stake their claims. But the region’s diverse cultures and regulatory frameworks also make it a complex environment.
  • Terrence Dopp
  • October 2020
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Key Points

  • Situation: Wealth creation, an expanding middle class and historic under-protection make the Asia-Pacific region a growing insurance market.
  • Extent: The Asian market is so strong this year U.K.-based Prudential plc announced plans to fully spin off its Jackson National U.S. operation to free up cash for Asia and Africa operations.
  • Pandemic: While COVID-19 is creating a short-term hurdle, the region’s growth isn’t expected to suffer in the long run.


It's going to take some time for the economists and historians to declare if and precisely when we've entered into the much bandied Asian Century.

But, for the insurance world, the current climate is surely the Asian Moment.

Creation of new wealth, a growing middle class and a historic protection gap have led multinational insurers to look increasingly toward Asia as the well of growth beyond more locked-up markets such as the United States and Europe. The geographically and economically fragmented region is home to a third of the global population and some of its economies rank near the top of the fastest-growing list.

Just look at China, the world's second-largest economy and growing. Point taken.

“Anywhere where you have a rising middle class, you have wealth creation, you have natural hazard and legal exposure is a good environment for insurance to prosper,” said Chubb's Paul McNamee, senior vice president, regional president for Asia Pacific. “From our perspective that's an environment where we can add value.We look long term and the projections only indicate that the region will continue to develop that way.”

Chubb is among the companies growing operations in the region and its Asia-focused international life business in the second quarter of the year saw a 30% rise in net premiums written, the company's Chairman and Chief Executive Evan G. Greenberg said earlier this year.

In all of 2019, Chubb's gross premiums written in Asia totaled $2.9 billion, up 9% in constant dollars from prior year. Operations across lines there represented 7% of the company total, according to the company financial report for 2019.

Sun Life Financial Inc. expanded its Asia presence to eight markets when it announced plans to open a Singapore branch offering life insurance products to the high net worth population.

The company, which already offers life, health and wealth management to 23 million clients in Asia, said Singapore attracts high-net-worth residents with a strong regulatory and solid business environment. It already operates in China, the Philippines, Hong Kong, India, Indonesia, Malaysia and Vietnam.

MetLife Inc., the largest U.S.-based life insurer, has been in Asia dating back to 1952 in Bangladesh. The company relies on organic growth as well as alliances and acquisitions to grow in the region, and recent additions to its portfolio include Malaysia, Vietnam and Myanmar. In all, the company has a presence in 11 Asian markets.

In 2019, Asia accounted for about a quarter of MetLife's earnings and the company reported $5.7 billion in net income.

American International Group and subsidiaries operate in 18 countries in Asia and in 2019 its international operations including Asia accounted for 30% of its general insurance revenue. Japan alone accounted for 15.3% of property/casualty direct premiums written.

Henrik Naujoks Bain & Company

The countries are not only different in regulation, they represent different stages in economic development; they are very different in their consumer behavior and their behavior toward digital. Taking this into account is difficult.

Henrik Naujoks
Bain & Company

On Hold

It is important to point out before reciting numbers that the COVID-19 pandemic altered the calculus as it shuttered commerce and upended lives across the globe. Asia, where the coronavirus was first detected in Wuhan, China, and spread widely before governments took tough stances on testing and social distancing, has been acutely impacted by the disease.

The International Monetary Fund projects Asia's growth to stall at 0% in 2020, marking its worst performance in six decades. Still, the IMF projections for Asia as a region outpace other parts of the globe by far: Its key trading partners in the U.S. and Europe will contract by 6% and 6.6% respectively, according to the expectations.

The Organization for Economic Cooperation and Development, an international organization that studies economic development and policies worldwide, in June found the “global middle class” is projected to hit 3.2 billion this year and 4.9 billion by 2030. The prime driver of this growth will be found in Asia, which by 2030 will account for a projected two-thirds of the world's middle class and 59% of consumption within that group, according to OECD.

Growing fortunes create the need to protect them. They also mean more people buying houses and cars.

“You've got a natural growth in the industry because wealth is being created in Asia probably faster than any other region of the world,” McNamee said. “As wealth grows, as populations become more prosperous, they look to protect their assets and their livelihoods. That's a great environment for insurance to prosper.”

New Frontier

Unlike more mature markets in North America, the Asia-Pacific region encompasses numerous local jurisdictions, each with their own needs and regulatory structures. While at once complex, it also holds promise for those looking to make inroads.

At the risk of omission, you have the emerging giants of China and India. The city-states of Hong Kong and Singapore. Mature markets such as Australia, Japan and Korea. Add in the growing countries, such as Indonesia, Vietnam and the Philippines, to name a few.

Henrik Naujoks, global head of insurance with Bain &Company, said Asia is a “complex” environment with each nation posing its own intricacies and regulatory climate. The region has become so important that he relocated to Hong Kong from Zurich in May 2019.

“It's tough and one of the reasons is that it's fragmented,” he said. “The countries are not only different in regulation, they represent different stages in economic development; they are very different in their consumer behavior and their behavior toward digital. Taking this into account is difficult.”

Paul McNamee Chubb

As wealth grows, as populations become more prosperous, they look to protect their assets and their livelihoods. That’s a great environment for insurance to prosper.

Paul McNamee

Focus East

The single clearest recent example of the interest multinational insurers are showing for Asia comes from Prudential plc, the London-based carrier that has historically focused on life insurance in the region.

That company announced in August it plans to completely spin off its U.S.-based Jackson National unit with an eye toward growing its financial flexibility in Asia and Africa. The move would result in two separately listed companies with distinct investment propositions, which Prudential plc Group Chief Executive Michael Wells said in a statement is designed to improve “strategic outcomes” for both companies. The new group would have its primary listings in London and Hong Kong, with a secondary one in Singapore.

In the first half of this year, Prudential plc announced its Asia operating profits climbed 14% even as the larger company felt the drag of the pandemic.

Prudential plc touts its pan-Asian footprint, with its largest life and protection operations in Hong Kong, Singapore, Indonesia and Malaysia. It also does business in Thailand, Vietnam, Taiwan, the Philippines, Cambodia, Laos and Myanmar, as well as maintain successful partnership ventures in China and India. It boasts top-three positions in nine out of 13 Asia life markets. In asset management, its Eastspring unit manages $220 billion across 11 markets in Asia and offers investment solutions to third-party retail and institutional clients as well as to its internally sourced life funds.

“The Asian insurance market is not only growing, it's close to an inflection point of even faster growth,” said Wells in an August conference call. “When income per capita reaches around $10,000 per capita, this is when insurance penetration takes off.”

Insurance penetration in Asia is only 2.7% of GDP, compared with 7.5% in the U.K., the company said, while mutual fund penetration is just 12% in Asia, compared with 96% in the United States. “Our Asia-focused strategy will support long-term delivery of future shareholder returns through value appreciation, with a focus on achieving sustained double-digit growth in embedded value per share,” the company said. “This will, in turn, be supported by growth rates of new business profit, which is expected to substantially exceed GDP growth in the markets in which the Group operates.”

Chubb's McNamee said his company's digital offerings in Asia even go as far as distributing travel insurance through a partnership with ride-sharing and mobile payments company, Grab, the leading “super app” in Southeast Asia, the Uber of Southeast Asia. Chubb's business lines in Asia are split roughly equally between commercial and individual offerings, he said. On the commercial side, it is a significant player in directors and officers, professional indemnity and property offerings, among others.

On the consumer side, it offers health and travel, as well as life and supplemental life products, said McNamee, whose area of management doesn't include the traditional life operations. In all, Chubb has a presence in 14 Asian countries including a growing ownership stake in Huatai Insurance Group, a China-focused holding company with P/C, life and asset management subsidiaries.

Greater China—which includes Hong Kong and Taiwan—is a “long-term game” for Chubb. The company also has businesses in Korea, Japan, as well as a stake in every major ASEAN country, McNamee said.

He said he expects the market to begin its return in the coming 12 to 18 months.

“We'll see a good degree of growth again in the region,” he said. “The consumer demand is too powerful in Asia-Pacific.”

On the commercial side, NcNamee said the current pricing environment is perhaps the most favorable one Chubb has seen in 10 to 15 years. He said that trend is helping the company grow particularly in developed markets. On the medium-and long-term radar screens, McNamee said the plan is continued growth in digital infrastructure, distribution and investing in local partnerships to grow the footprint.


Bain's Naujoks said entrance into the Asia-Pacific market, and the promise it holds, hasn't gone off without a hitch in every case.

He cited Axa, which has reportedly been exploring the sale of its Singapore entity. In July, Aviva plc completed the sale of Friends Provident International Ltd. to RL360 Holdings Co. Ltd., a sale announced after a strategic review that underscored its commitment to its most promising core markets, U.K.-based multiline insurer Aviva said. Friends Provident International is Aviva's Isle of Man-based, Asia-focused life and investment company.

The common thread, according to Naujoks, is that 'OK, Asia is growing, Asia is attractive' isn't a business plan.

The common pitfalls he pointed out fall into several categories: those insurers who cobbled together a number of small local plays but never gained a leadership foothold and the failure to have a real business logic or repeatable formula for entering Asian markets.

“People thought if I bring in the best British manager or the best French manager or the best U.S. manager they will manage it. I think the contrary is right, that often you need top local talent to be successful in the market,” he said. “There are a lot of companies that wanted to be here because it's growing but have never really created value.”

Terrence Dopp is a senior associate editor. He can be reached at

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