Belgium's Ageas looks to expand non-life insurance footprint in Asia
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Ageas, a Belgium-based insurer and one of the top 20 in Europe, is looking to expand its footprint in non-life products in Asia, as economies boom in this part of the world.
Frank van Kempen, chief commercial officer for Asia, says Ageas’ non-life operations in Asia currently account for only 10 per cent of the firm’s business, while in Europe, non-life insurance accounts for 40 per cent. Therefore, the company has a lot of room to grow in Asia.
Ageas already operates in five parts of Asia, namely Thailand, Malaysia, mainland China, Hong Kong and India.
In Thailand, Ageas has a 30-per-cent stake in Muang Thai Holding, which invests in Muang Thai Life Assurance (MTL) and Muang Thai Insurance (MTI).
Ageas believes acquisitions in Asia could be a path to growth for the company. It says it is happy with its partnership with MTI even though it only has a 15-per-cent stake.
In Europe, Ageas operates in seven countries, but the firm has been watching the flow of investment into Asia and growth of its middle class as European economies struggle. The company wants to cash in on this region’s growth.
Van Kempen has identified several markets that have potential for both life and non-life insurance business, namely Indonesia, Vietnam, the Philippines, South Korea and Taiwan. But he said the company was giving primary importance to boosting premium income from the non-life segment.
China is a big market for Ageas, with annual premium growth of 20-30 per cent, but Thailand is also important because its partner MTL, in which Ageas holds a 31-per-cent stake, showed impressive performance last year by becoming the market leader in terms of new business.
MTL is studying partnership opportunities in neighbouring countries, van Kempen said. The partnership model is suitable for Ageas, as existing companies already have strong distribution channels in place.
He attributes the impressive growth in Thailand to the bancassurance channel, as MTL and Kasikornbank have cooperated in developing insurance products with a segmentation strategy. In Malaysia, Maybank is Ageas’ bank partner.
Van Kempen said the most important key to the company’s future growth was having efficient distribution channels. The digital trend will take on a greater role in that regard, and Ageas will focus on data analysis to gain greater understanding of customer behaviour so it can classify them properly.
“Data usage will have to be more smart in order to develop products to serve the actual requirements of consumers,” he said.
Digitalisation will make premiums cheaper as well, but this will not mean insurance companies have lower profit margins, because the same trend will help reduce operational costs and risk.
“Many [companies] have sent policies by e-mail. This proves that people can access insurance products from the digital trend. But where we have to move together with the trend is we have to reinforce the existing distribution channels, either bancassurance or agencies, to [increase the] confidence of customers,” he said.
