AXA out to expand in Hong Kong and Asia
AXA, Europe's second biggest insurer, aims to double its revenue in Asia over the next three years and wants 15 per cent annual growth in its business in Hong Kong.
The insurer's Hong Kong chief executive, Stuart Harrison, said the growth would be driven by potential acquisitions of rival insurers or pension providers as well as by organic growth.
'I am open-minded on acquisition opportunities as there are more than 140 insurance companies in Hong Kong. If some insurers or Mandatory Provident Fund providers want to walk away from the market, we will consider that,'' Harrison said in an interview with the South China Morning Post.
AXA's agency has grown 26 per cent over the past two years to about 3,800, making it the fourth largest in the city, after AIA, Manulife International and Prudential.
But Harrison does not plan to aggressively expand its number of agents in future. 'We focus on the quality instead of the quantity of our agencies and distributors.'
Later today AXA China Region executives will unveil a blueprint for future growth in the region and announce a major rebranding project.
The group plans to change AXA China Region's Chinese name to match the Chinese translation of its parent company AXA, although the English name will remain unchanged. 'The rebranding will mark the beginning of an era and a new chapter of expansion,'' he said.
It will also reflect the restructuring of AXA's Asia business in April.
As a result of an agreement with Australian insurer AMP, AXA Group will no longer hold the Australian joint venture AXA Asia Pacific Holdings or its Australian business but will retainthe Asian business from the joint venture.
AXA has set up two units - AXA Japan and AXA Asia.
AXA Asia is responsible for insurance business in Hong Kong, mainland China, India, Indonesia, Malaysia, Singapore, Thailand, Vietnam and the Philippines.
Harrison said Hong Kong is a major revenue contributor, representing one third of all Asian business, excluding Japan.
New premium income from sales of new insurance policies in Hong Kong has grown a combined 30 per cent in the past two years to HK$3.06 billion last year.
Harrison also predicted medical insurance, pension business and yuan-denominated policies will offer big opportunities in the coming years.
Already the third largest group medical insurance player in Hong Kong, it wants to become number one by 2015, he said.
The insurer was upbeat about the potential for yuan-denominated life insurance policies, which it sells through Citibank.
'Investors believe the yuan will appreciate and Hong Kong people like to play the currency market. Yuan insurance products will continue to be popular,' Harrison said.
The challenge ahead, he believes, is to prepare for the new regulatory environment under a government proposal to set up an Insurance Authority to replace the government- run Office of the Commissioner of Insurance in 2013. The new regulator - still being consulted on - is likely to be the harbinger of tougher regulation.
'Nobody knows about the new regulation environment after the set up of the Insurance Authority. We need to prepare for the new regulatory environment,'' he said. 'However, we must add that we support any regulatory change that provides better protection for policyholders.'
From July 2012, the Hong Kong government will allow employees to choose their own Mandatory Provident Fund (MPF) providers. Harrison said AXA aimed to double its MPF market share from three per cent to six per cent as a result of this change.
The total, in HK dollars, grossed by insurers in Hong Kong in the first quarter of 2011, an increase of 13.3 per cent over the first quarter of 2010