“The Asian opportunity is here and now,” claimed one of Australia’s largest insurers as it aims to exploit the burgeoning insurance market across the region.
Insurance Australia Group (IAG) has provided an update on its Asian operations and the substantial growth opportunities from its regional footprint.
Managing director and chief executive officer Mike Wilkins, said there was a significant growth opportunity in Asia with middle class consumption expected to increase by nearly 200%, to around US$12 trillion, by 2020.
“The Asian opportunity is here and now. Over the past couple of years we've quietly gone about our Asian strategy and are now getting real traction. We are entering an exciting phase of our Asian ambitions as we shift from a market entry focus to one of driving operational performance from our enlarged regional presence,” said Wilkins.
Wilkins said IAG is well positioned to benefit from the accompanying trend of increased asset ownership in markets where insurance penetration is currently low, resulting in long term profitable growth close to home.
After completion of the Kurnia acquisition in Malaysia, which is expected to close in the second half of calendar 2012, IAG will have approximately $720 million invested in five Asian countries.
Around $500 million will be invested in established businesses in Thailand (Safety Insurance) and Malaysia (AmG and Kurnia), while IAG has invested a further $220 million in the emerging markets of India (SBI General), China (Bohai Insurance) and Vietnam (AAA Assurance).
IAG's CEO of Asia, Justin Breheny, said IAG's local business model was fundamental to its success in Asia. He identified three key elements to this model: effective market entry, local partnering and capability transfer.
"We have a proven business model in Asia," said Breheny. "Our extremely disciplined approach to market entry has resulted in an attractive portfolio of businesses, with differing stages of market development and associated growth and return profiles, but all with a clear ability to create value for the Group.”
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