UK insurer Prudential to keep its focus on Asia
British insurance giant expects to double its operating profit in three years, targeting the growing middle class in the regional markets
Britain's largest insurer by market value is also on track to reach its earlier goal of doubling its 2009 operating profit from its Asian businesses by this year. It announced its new goal last week when declaring a double-digit percentage increase in its interim dividend.
"Our growth strategy relies on the rising number of middle-class families in Asia that we can help to achieve long-term savings," Barry Stowe, the chief executive of Prudential Asia, told the South China Morning Post. "Our fundamental tactic is to penetrate 13 Asian markets by a mix of insurance agency and bancassurance."
Stowe said the regional unit was in position to meet its earlier three-year target, set in 2010, because it needed to expand operating profit by just 6.7 per cent in the second half to meet it, after achieving 20 per cent growth in the first six months.
Stowe, who served as president of AIG's accident and health unit from 1995 to 2006 before he joined Prudential, stressed that face-to-face sales mattered to its business in Asia, even as consumers switched to other methods of buying insurance policies.
Insurance had a relatively low penetration rate in Southeast Asia, he said.
Prudential acquired the life assurance unit of Thailand's privately owned Thanachart Bank in 2011 and had retained 100 per cent of its staff, Stowe said.
He said that would help Prudential sell insurance products.
"In a lot of respects, it is fundamentally more of the same, where we continue to focus on the markets that we focused on, which tend to be the rapidly growing Southeast Asian markets and Hong Kong as well as China," Stowe said.
He highlighted Indonesia, the Philippines and Thailand as the three drivers of premium-income growth in the region.
With its forecast-beating results, the insurer's share price hit a record high. The stock has gained more than 150 per cent since January 2009 due to what it called "epochal transformation in Asian economies".
The 165-year-old insurer raised investor eyebrows with a 16 per cent jump in its interim dividend, the fruit of its expansion in Asia, where the firm is in the process of setting up a new holding company that would bring all its 13 Asian operations under a single entity.
The same year Prudential entered into its partnership with Thanachart, AIA - the Hong Kong-based leading insurer that is its major rival in the region - bought Dutch bank ING's Malaysian life insurance operations, in a separate sign of major insurers' growing interest in the Asian market.