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The year 2012 may not have been the most flourishing of years for some health insurance companies around the globe, but data for the first quarter of 2013 looks promising for many of the world’s largest, most well-established medical insurance providers. Among those releasing encouraging figures, Cigna, AXA, Munich Health and Allianz, some of the biggest players in the industry are all showing healthy signs of growth.

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As AXA PPP recently released their premium increases for April, Globalsurance customers can be pleased to note that the six-month increase will only be about 3 to 5% higher, according to a clients plan level. AXA PPP’s first premium increase last October was about 4% across the board. This means that customers are seeing annual increases in premiums of less than 10%, which is average, if not lower, when compared to other insurance companies.
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Globalsurance continues to witness the falling rates of global health insurance inflation in the high-end sector, typically referred to as International Private Medical Insurance (iPMI). Average rates of inflation per year have typically hovered at around 11% over the past 5 years, but this year, AXA PPP has published an annual increase of just 8%.

As a key player in the health insurance sector, AXA PPP has the competitive advantage of being one of the largest and longest-running insurers in the world and they set a standard for different areas in the industry, including international health insurance inflation rates. One of the most influential factors for determining the cost of health insurance premiums is the cost of claims, and with that, the increase in premiums is typically a good indicator for the monetary changes in the cost of care and treatment.

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Last months’ 2012 Health Insurance Awards held in Glasglow, England, saw many companies recognized for their efforts in the health insurance industry both in the United Kingdom and internationally. Many of the health insurance companies that received awards and honors at the event, which is widely considered as one of the leading industry events in the UK that showcases professionalism and excellence in the medical insurance industry, work with Globalsurance.

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In this article we will first present our findings of the premium increases and premium inflation rates in each region and country we studied, with specific insurance findings to be presented at the end. Overall our findings were that International Private Medical Insurance (iPMI) premium inflation was very high, at roughly 10.8 percent per year over a 5 year average. While variations exist between countries, the reality is that iPMI inflation rates were extremely consistent throughout the world. However, it is important to note that this is medical insurance premium inflation at the high end of the sector, and not necessarily with regards to the mass market.

Even presenting the argument that premium increases are fairly consistent on a global basis, there are some immediate outliers – Hong Kong, for example, runs at an iPMI premium inflation rate of roughly 13 percent per year, while Kenya’s premium inflation rate is approximately 9 percent per year. Although there is a difference in premium inflation rates between Hong Kong and Kenya, the difference is not overly substantial – as will be seen inside this report.

Globalsurance is pleased to reveal the results of our latest study on the international health insurance industry and rates of international medical insurance inflation around the world as of August 1^st 2012.

Using 7,916 data points from 8 different International Private Medical Insurance providers in 10 different countries, Globalsurance has been able to successfully identify a number of trends within Global Medical Inflation for individual International Private Medical Insurance (iPMI) plans during the time period from 2008 to 2012. iPMI is a subsector of the greater health insurance industry which services the global population of expatriates and international High Net-Worth individuals.

The companies sampled in the studies use Age and Geographical Area of Coverage as the main variables in their premium calculations. By selecting a sample which is community rated Globalsurance has been able to efficiently identify the actual rates for premium increases in different parts of the world. Our measure of inflation is based on a sample of policies, ages, and published rates for each insurer included in the study. Globalsurance selected the most common age groups and most common policy types for our data points to achieve realistic measurements in relation to medical insurance premium inflation around the world.

While individual insurance providers and underwriters may disagree with our findings, the figures represented in this report are based on our sample and present baseline figures for all of the regions and companies we chose to consider.

It is important to note that, unlike the recent Towers Watson Report on Medical Trends, the data contained in the Globalsurance insurance review is not survey based. Rather than looking at individual responses and feelings in reference to levels of health insurance premium inflation, which may have some inherent bias dependent on the respondent, Globalsurance is analyzing the actual premium data from insurance companies with exposure to the world at large, over locally based providers operating in a single country.

Additionally, we have analyzed premium data, and not healthcare pricing data. Consequently the figures represented in this report are indicative of the levels of healthcare cost inflation which insurance perceive to be in place in the locations we sampled; profit and operating costs of the individual insurers are assumed to be unchanged. While the increase or decrease in premium values may point to actual rates of medical inflation in the countries which were included in the study they do, in fact, represent the increased costs placed on policyholders.

However, it should be noted that, while the figures contained in this report are the actual rates of iPMI premium increases for the duration of the study, the removal of Age and Policy type means that the figures presented in this study of International Medical Insurance premium inflation can be used as a suitable proxy for rates of actual medical inflation in relation to healthcare costs around the world. It should be noted that the proxy does not represent medical inflation across the entire healthcare sector within a country or region; for example, NHS cost increases in the United Kingdom are not evident in our findings. The rates of iPMI premium inflation are only a proxy for healthcare costs in High-End, private medical facilities in the countries which we considered, due to the basic nature of the international medical insurance products we are studying.

So, without any further ado, here is the Globalsurance International Insurance Review:

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In recent announcements, AXA, the Industrial and Commercial Bank of China Co Ltd (ICBC) and Minmetals declared the launch of their foray into the China insurance market for life insurance. Officially branded as ICBC-AXA Life, the company recently received official approval from China’s State Council and all other relevant governing bodies to do business in the country. This follows the acquisition of 60 percent of the equity stake in AXA-Minmetals by ICBC.

ICBC-AXA Life represents AXA’s long term commitment to the Chinese market, according to Henri de Castries, Chairman and CEO of AXA. By partnering with ICBC, AXA stands to gain significantly in terms of expertise and experience, bringing diversified and comprehensive insurance coverage for the Chinese market.

Prior to the partnership, AXA and Minmetals formed the venture known as AXA-Minmetals and was established in 1999. In October of 2010, ICBC acquired a 60 percent equity stake in AXA-Minmetals, resulting in an equity split of 60 percent ICBC, 27.5 percent AXA, and 12.5 percent Minmetals. The equity stake was purchased for 1.2 billion yuan by ICBC and prior to the acquisition, the equity split was 51 percent-50 percent AXA-Minmetals.

With headquarters in Shanghai and operations in over 20 major cities and provinces, ICBC-AXA intends to service a vast majority of China. Beijing, Shanghai, and Guangzhou will serve as major service hubs. Some of the products which ICBC-AXA will offer include education, family protection, wealth management, and retirement insurance advice and services.

ICBC-AXA will be leveraging ICBC’s 282 million clients and expertise in the Chinese financial industry. The strategic move on both parties should prove to set a new precedent as China’s power player teams up with Europe’s largest insurer. Ambitious plans are in place as ICBC-AXA strives to be the leading provider for insurance in China.

In recent statements, Mr. Castries was quoted as saying that Europe looks like Chernobyl before the explosion, indicating forecasts of tumultuous times ahead. The development of ICBC-AXA represents a diversified move for AXA and a new area of opportunity for ICBC. As financial woes continue to haunt the financial industry, the insurance industry represents a stable move despite the large gains that can be achieved through it.

The Chinese market is difficult to penetrate due to strict Chinese government oversight and regulation. As such, China represents a significant opportunity due to its sheer size of population. Previously, AXA utilized Minmetals’ network and Chinese state-controlled status to break into the Chinese market. However, as Minmetals is a mineral and metal company, AXA stands to gain much more through the help of ICBC’s broad reach within the relevant sector.

The Chinese market is expected to grow at an average rate of 12 percent per year between 2010 and 2020, according to analysts. Chinese national companies maintained a 95 percent market share on life insurance and 99 percent in damage products, while more than 50 foreign players were struggling to win more of the market for general lines. AXA aims to bypass regulatory brakes which have restricted the company’s ability to compete in the past. ICBC has agreed to distribute AXA’s product in over 16,000 branches. AXA remains dedicated to the Chinese market and is actively trying to withdraw from activities within Australia and New Zealand.

Appointed as the Chairman of the Board of ICBC-AXA Life is Mr. Sun Chiping and President Mr. Jamie McCarry will oversee the day-to-day business operations of the newly formed joint venture.

While AXA is attempting to significantly increase market share in China, ICBC is actively trying to increase their market share in Europe. It is understood that ICBC will leverage AXA’s connections and expertise within the European market to help ICBC expand.

ICBC is the world’s largest bank by market capitalization and is looking to diversify its holdings outside of banking. ICBC is one of China’s four state-owned commercial banks and was initially founded as a limited company in 1984. It entered two stock markets simultaneously, Hong Kong and Shanghai, in the world’s biggest initial public offering at the time, featuring $21.9 billion US in public funding.

As Europe’s second largest insurer, AXA Group is a worldwide leader in insurance and asset management. With over 101 million clients in 57 different countries, AXA boasts revenues of over 86 billion euro and earnings of over 3.9 billion.

Minmetals, officially China Minmetals Corp, is China’s largest metal trader. Minmetals specializes in the production and trading of metals and minerals, namely copper, aluminum, tungsten, tin, antimony, lead, zinc, and nickel. As a state-owned enterprise, Minmetals is under the jurisdiction and laws of China.

Insurance Companies Mentioned:

AXA the global insurance group in Paris

AXA is a French global insurance group with headquartered based in Paris. As a conglomerate of businesses, AXA is one of the world’s leading providers of health insurance and operates globally.

European insurance markets are looking increasingly bleak amid news of UK health insurance premiums climbing by 10 percent, and fears of expat health insurance premiums doubling in Greece. The bad news in the Euro Zone’s health insurance market comes at the same time European life insurers are nervously awaiting the outcome of the Solvency II proposal’s passage through the European Parliament. The proposal, which has been ten years in the making, has been designed to ensure insurers have capital reserves proportional to the risks underwritten.

The unprecedented rise in health insurance premiums, specifically in the UK, has left both insurers and their customers worried. In an effort to stop the 10 percent price increases that have been seen in the past couple of years, international health insurers have been trying to reduce costs by pinpointing where they’ve been going wrong. William Russell, an international insurance firm based in the UK, has pointed the finger at surgeons who it claims have radically varying surgical prices.

The firm mentioned an example where a surgeon in Hong Kong requested US$42,000 to perform a knee replacement operation. According to Nichola Duncan, the company’s international claims manager, “We contacted three other well-known surgeons locally and the average fee was US$24,000.” In light of the hike in prices, a number of insurance firms, including William Russell have implored their customers to contact their insurer prior to treatment to ensure that the client will not have to personally foot the bill. Other reasons that have been stated for the increasing cost of premiums has been fraud, over diagnosis and unnecessary medical treatment.

The bad news in the UK comes at time where British nationals living in Spain and Greece are returning home due to the huge economic problems in both Euro Zone stragglers. One of the biggest potential problems that expats are facing is the prospect of their health insurance doubling if Greece decides to leave the Euro Zone. Their worries are centered around the possibility that if a Greek exit, or Grexit , occurs, hospitals may not reduce their prices. Despite their fears, prominent insurance firms such as AXA are confident that if Greece ditches the Euro for the Drachma, hospitals will reduce their costs. Kevin Melton, AXA international’s sales and marketing director admitted that “Premiums will be expensive” but “the cost of claims should be lower because hospitals services will be cheaper.” However, even if hospitals cut their prices, it is very likely that premium rates will still rise, as expats with international cover would rack up claims beyond the Greek border.

The economic problems in Greece are not only proving harmful to expatriates living in the country, but also to visitors holding the European Health Insurance Card (EHIC). The premise of the EHIC is that an individual holding the card has access to the same amount of public health care than a citizen of the EU country the person is visiting. In the past, many have used the EHIC as their main source of travel insurance while traveling in and around Europe. Due to the immense problems that the public hospitals are having in Greece, they no longer have the resources to deal with foreigners holding an EHIC. This means that even if one has an EHIC card, they are no longer guaranteed healthcare and may end up having to pay for expensive private care out of their own pocket. With the EHIC proving to be ineffective in many cases, the need for proper travel insurance has become greater.

The new ineffectiveness of the EHIC in Greece is part of a growing trend of European countries becoming increasingly cagey about other European nationals using their public health services for nothing. The first country that clamped down on this was France. In 2008, former President Nicholas Sarkozy enacted a law where by non-French non-working individuals under retirement age were made to buy private medical insurance and were no longer allowed to use France’s public health system for ‘free’.

As more and more European countries lose money it seems that they are becoming increasingly stingy about their own healthcare systems and following suit. Soon after France enacted their laws, Spain created similar ones, and while the Greeks didn’t exactly intend to cut expatriates out of their public healthcare system they too have effectively done the same. Those who support these moves argue that it was wrong that expats were getting the benefits of a system that they had not contributed to and that cards such as the EHIC were being abused.

The British have now caught on to the general trend and are pressing their government to make it compulsory for foreign nationals to have health insurance to ensure that the NHS doesn’t become a free treatment ticket and that Briton’s have first priority.

While the health and travel insurance markets ride waves of uncertainty, European life insurance firms are keeping their eyes firmly focused on the outcome of the Solvency II proposal. The proposal is intended to protect insurance companies in case of another crippling financial crisis. As the proposal progresses through the European Parliament in Brussels, German insurance companies such as Allianz and Munich Re, as well as many others, have all expressed an interest in implementing a phase-in process for Solvency II as it is claimed that 40 percent of German companies would have problems complying with the new regulations. They claim an immediate introduction of the Solvency II legislation would be detrimental as they would not have enough time to adjust to the stricter measures and a sudden hike in capital reserves.

Most companies use discount rates based on asset yield to calculate technical provision, and according to Karen van Hulle, the European Commission’s Head of Pension and Insurance, the phase in would allow companies to gradually move towards the risk free discount rate that Solvency II requires.

Insurance Companies Mentioned

William Russell

British firm, William Russell, was founded in 1992 and is an international insurance provider that specializes in health, life and disability insurance.

Axa

AXA is a French insurance firm based in Paris, France. Ranking in as the ninth largest company in the world, AXA specializes in life, health and other forms of insurance.

Allianz

German company, Allianz are the world’s 12^th largest financial services group in the world. Formed in 1891 it specializes in insurance but also deals with other financial services.

Two international health insurers have made minor adjustments to their health plans. Both AXA PPP International and Now Health international have made changes, mostly to their international group health insurance plans, in order to increase their appeal to corporate customers.

Now Health International has moved to modify their mid-range group insurance plan, WorldCare Advance, to offer routine dental and maternity coverage options based largely upon responses from intermediaries. Available to companies with 10 or more employees enrolled on the policy, the options include coverage for routine dental care, complex dental care and routine maternity care.

Routine Dental benefits will provide cover up to UK £ 312 (US$ 500), while complex dental benefits will cover up to UK £ 625 (US$ 1,000). Both optional dental benefits packages come with a 20 percent co-insurance. The added routine maternity coverage options will provide benefits up to UK £ 4,375 (US$ 7,000), and will provide policyholders the option of taking out the benefit with or without a 20 percent co-insurance.

In a slightly different approach, AXA PPP International is making policies written on a medical history disregarded basis more available to group applicants. AXA PPP has reduced the number of people required to be on the plan in order to receive the medical history disregarded benefit from 10 to 5.

Medical History Disregarded, also known as MHD, is a highly attractive benefit for providing coverage to individuals with pre-existing conditions. Under an MHD benefit all pre-existing conditions present within the group can receive coverage under the plan, even if they would normally be excluded from protection. The move by AXA PPP to lower the entry point through which groups are able to receive MHD coverage is being welcomed by intermediaries and policyholders worldwide, and means that organizations across the globe now have a more flexible option on the table in relation to this coverage without having to have the normal 20+ employees enrolled on a policy.

AXA PPP International have also amended their rules, making it possible for individuals who are currently underwritten by a different insurer to switch over to AXA PPP’s Chanel Islands or International Health Insurance plans while still maintaining the same terms of underwriting. In order to take advantage of the ability to switch providers to AXA PPP, the individual must simply turn in a declaration form verifying they have not received treatment in a hospital or visited a specialist within the last 12 months, have not had cancer within the last 5 years and do not have any treatment scheduled in the near future.

Both of the modifications to plan benefits or structure made by AXA PPP and Now Health should provide added appeal to consumers, especially those looking for group plans. While this may be a point in time where AXA PPP and Now Health have both seen areas there they can improve upon their products to increase membership, it will be interesting to see if other insurers further refine their offerings as well.

Insurance Companies Mentioned

AXA PPP International

Originally known as PPP Insurance, the company became part of the Global AXA Group in 1999 and changed its name to AXA PPP in 2002. AXA PPP is now an international health insurance company with over 2 million customers around the world.

Now Health International

Now Health International is an international health insurance provider that was founded in 2010. Now Health is based in Hong Kong and also has regional service centers in Dubai and the United Kingdom. Its plans are underwritten by members of the AXA group.

French global insurance group AXA SA has made a move to strengthen its position in South Korea’s important direct insurance market through the acquisition of general insurer Ergo Daum Direct in a deal announced this past week.

Officials representing both AXA and the Dusseldorf-headquartered ERGO Insurance Group completed and signed a share purchase and sales agreement on May 3^rd which will see AXA General Insurance Korea, the French global insurer’s local unit, take over 100 percent of ERGO’s subsidiary in South Korea, ERGO Daum Direct this year. Although the official purchase price has yet to be disclosed by either party, local media put AXA’s expected outlay for their local market rival at around KRW50 billion (US$44.2 million). Closing of the sale remains subject to final regulatory approval.

Ergo Daum Direct is a Seoul-based non-life insurer that focuses its operations around direct motor insurance policy sales. Founded as Daum Direct Auto Insurance in 2003, the company has been quick to build a considerable business portfolio, with a client base now surpassing 500,000 members and annual insurance premiums worth KRW260 billion (US$229 million). The Korean insurer became a subsidiary of Ergo Insurance Group, when the firm, which is itself a subsidiary of global reinsurance giant Munich Re, acquired a 65 percent stake of the company in 2008. According to their 2011 year-end financial statement, Ergo Daum Direct is now the fourth largest direct motor insurance provider in South Korea, with a share of just under 8 percent of the domestic direct motor insurance market.

While Ergo has certainly benefited from their time in South Korea, the firm put up their local unit for sale last year on fears that their current market share and sales momentum would not be able to offset rising claims costs going forward. Ergo Daum Direct has been dragged down by losses due to high loss ratios in motor insurance and have been unable to raise insurance premiums appropriately and compete due to ongoing governmental pressure to freeze rates. AXA was among several suitors vying for Ergo’s South Korean motor insurance book, and was finally able to successfully outbid its principal rival, the Korean Federation of Community Credit Cooperative, after local laws barred the cooperative from owning more than 30 percent share of the domestic financial entity.

AXA already have a leading presence in the South Korean motor insurance sector through its wholly-owned subsidiary AXA Direct Korea. AXA’s local branch currently controls around 15 percent of the market with over 950,000 policyholders and KRW534 billion (US$467 million) in written annual premiums. Now, with the acquisition of Ergo Daum Direct, AXA becomes the biggest player in the Korean auto insurance industry as its market share will jump from 15 percent to 22 percent after the merger. In addition, if you combine the KRW700 billion (US$ 612.6 million) in net premiums both direct insurers have written as of January, AXA’s Korean operations would rank ninth amongst all general insurers active in the Asia Pacific nation.

Speaking on the transaction in a press statement, Stephane Guinet, CEO of AXA Global Direct, noted that the decision to purchase Ergo’s South Korean business will give AXA the opportunity to further reinforce it’s its presence in one of Asia’s fastest growing and most developed motor insurance markets for years to come. “We are extremely pleased to have agreed on the terms with ERGO for the purchase of ERGO Daum Direct, which further strengthens AXA’s number one position in the Korean direct motor market,” Guinet remarked, adding that with the addition of ERGO’s business, AXA now serves almost 5 million clients through it’s general insurance operations worldwide. Guinet Continued to say, “This acquisition demonstrates AXA’s commitment to the Korean market and is fully consistent with our global strategy to accelerate our development in the Direct Property & Casualty business.”

President and CEO of AXA Direct Korea, Xavier Veyry, assured clients of ERGO Daum Direct and AXA Direct Korea that the transaction will have no immediate impact on their account status and that going forward both organizations will benefit from improved access, service levels and product offerings. As it stands, insurance coverage will remain unchanged and fully in force. “Both companies have very similar business models and organisations,” says Mr Xavier Veyry, adding that “through this acquisition we are efficiently reinforcing our platform for growth in the most dynamic and strategic distribution segment in Korea”.

In a separate statement ERGO’s representatives heralded AXA as a strong brand that is more than capable of developing the company’s position further in the current South Korean direct motor insurance market which has its own specific challenges. Indeed, Ergo’s decision to sell comes at a time when Korean insurers are facing tough market conditions at home, with intense competition and low profitability forecasts prompting many to consider new business opportunities by expanding into new insurance markets through mergers and acquisitions abroad. Evidence of this trend was seen in November last year when Korea Life Insurance penned a 50-50 joint venture insurance operation in China with Zheijiang International Business Group. The insurer, South Korea’s second largest life insurance company, has also expressed an interest in ING Groep’s Asia Pacific insurance operations. This has been followed by plans made by their chief rival, Samsung Life, to develop operations in Thailand, India and Indonesian insurance markets in 2012.

South Korea is one of the worlds most saturated and competitive insurance markets. According to a Swiss Re sigma study, the country’s insurance penetration, as measured by the ratio of premiums to gross domestic product, is one of the highest in the world at 11.2 percent in 2010, behind only Hong Kong (11.4 percent) and Taiwan (18.4 percent). The South Korean market offers limited organic growth opportunities going forward compared with other markets in the region, in particular China and India where insurance market penetration holds rates of 3.8 percent and 5.1 percent respectively. In those countries, insurers remain focused on home market development, which features large populations and favourable demographic factors that should continue to support and drive premium growth. Given the fact that overseas expansion also helps to spread risk and balance business cycles as well as broaden client bases, it only makes sense for Korean most prominent insurers to pursue these new insurance markets abroad.

Insurance Companies Mentioned

AXA

AXA Group is a worldwide leader in Financial Services. Headquartered in Paris, the AXA Group companies are engaged in life insurance, health insurance and asset management services among others. AXA’s operations are diverse geographically, with major operations in Europe, North America and the Asia/Pacific area.

ERGO

ERGO is a subsidiary of global reinsurance giant Munich Re and offers a wide spectrum of insurance provision and services across 30 countries; it currently has more than 40 million customers. ERGO has a strategic focus in Central and Eastern Europe and certain Asian markets. The German insurer has become one of the leading health and legal expenses insurance companies within Europe. In addition ERGO provides property and personal accident insurance in India. In 2011, ERGO recorded a premium income of 20 billion euros and paid out benefits to customers amounting to E17.5 billion.

This week, Europe’s second largest insurer AXA selected Wasilah Insurance Agency to be its new business partner in the Kingdom of Saudi Arabia. The deal comes as part of the French insurance company’s plans to further develop and promote its products in the Gulf region.

On September 20th 2011, AXA Cooperative Insurance Company, the French insurance company’s Saudi Arabia-based shareholding company, signed a 10 year renewable agency contract with Wasilah Insurance Agency. Through this partnership, Wasilah has been given exclusive rights to market, distribute and sell all AXA-branded insurance products currently offered in Saudi Arabia.

AXA has been a key player in the Gulf and Middle East for over 60 years, offering a wide range of insurance products and services for corporate and individual clients in the region. In 2008, the company formed a co-operative insurance subsidiary in Saudi Arabia, called AXA Cooperative, and launched their company’s Initial Public Offering, which was over 5 times over-subscribed, in April 2009. Initially licensed to cover only motor and health policies, the insurer received final regulatory approval from The Saudi Arabian Monetary Agency (SAMA) last year to fully carry out its cooperative insurance and reinsurance business in the Kingdom of Saudi Arabia.

AXA’s interest in developing a greater presence in Saudi Arabia is well founded. With a population exceeding 27 million people, Saudi Arabia is the largest market in the GCC, and the insurance sector has developed substantially since the business was first permitted in the 1990s. Driven by strong macroeconomic performance (tied to a global rise in oil prices), rising income levels and positive demographic trends, the Saudi insurance market has grown by double digits for the past 5 years. In 2010, the Kingdom’s insurance sector grew by a further 12.2 percent, passing SAR 16.4 Billion (US$ 4.4 Billion) in gross insurance premium. This has all happened while the Kingdom’s non-life and life insurance penetration, at 1.0 percent and 0.1 percent, remain amongst the lowest in the region.

According to a recent report by Alpen Capital, Saudi Arabia’s insurance sector could reach US$9.24 billion in total written premiums by 2015 at an 18 percent combined annual growth rate. Due to an ageing population and regulatory initiatives, Saudi Arabia will be the only GCC market in which sales of new life insurance policies are expected to grow faster than that of non-life products. While the main business lines in the Saudi insurance industry have been health insurance and motor insurance retail cover, takaful insurance also has a significant presence in the Kingdom and their continued development will improve awareness and acceptance towards other lines of insurance in the region. Increased participation from the international private sector is also expected to yield additional positive returns.

This anticipated surge in demand for international insurance expertise in Saudi Arabia has pushed AXA to both improve upon their product portfolio in the region and seek out local business partners to enhance their immediate distribution platform. AXA’s new policies in Saudi Arabia will primarily cover retail products, but also will cater to the Kingdom’s growing SME sector. The new lines of business will include motor, property, marine and medical insurance as well as other protection options.

Through their new tie-in with Wasilah, AXA’s products will initially be sold through the agency’s headquarters in Riyadh. Within the next three years this network will be expanded significantly across the Kingdom, with around ten more agencies scheduled to be opened in Jeddah, Riyadh and Dammam. Wasilah’s head office in Riyadh will be responsible for supporting all new branches in addition to supervising its overall operations.

Speaking at the signing ceremony, AXA Cooperative Director Jerome Droesch asserted that their new partnership with Wasilah would give AXA the necessary edge to capitalize on Saudi Arabia’s remarkable market potential and take on the three leading players (Tawuniya, Medgulf and Bupa Arabia) in the retail and SME insurance sectors. “We see tremendous growth coming from KSA. We were very pleased to be granted our insurance license last year. Wasilah Insurance is a fitting partner to promote AXA Cooperative Insurance’s products and services in the Kingdom and they will be a key contributor towards our gaining dominance in the Personal Lines and SME line of business. It should represent as much as 15 percent of AXA Cooperative premiums in 3 years,” Droesch said.

According to Business Monitor International estimates, the Saudi population is one of the fastest growing in the world and is estimated to double by 2023. This substantial increase in the population not only increases the probability of insurance policies being taken out but also the number of Saudi locals able to work in the industry. Droesch explained that AXA would work hard to ensure the development of their insurance business contributed to the overall economic growth of Saudi Arabia. “This partnership shows that AXA will continue to invest in the region and our focus will be to seize the huge potential this market has to offer. We will leverage our international expertise and adapt our services and offerings to suit the local Saudi clientele. We will also continue investing in our employees and will use the large pool of well educated Saudi nationals as a prime source of recruitment and expertise,” Droesch remarked.

Khalid Al Rubaian, Board Member and Owner of Wasilah Insurance Agency, welcomed AXA’s involvement with his agency. Wasilah is a newly licensed agent but staffed with experienced insurance industry professionals, and with the right product portfolio could excel in the Saudi market.“I’m sure with AXA international expertise and the experience and knowledge of the Wasilah Board and Management supported by insurance matter experts with locally based expertise of international quality and standards; we will make a difference in the industry,” Al Rubaian.

AXA Cooperative Managing Director Paul Adamson, concluded the event, saying that their upcoming partnership with Wasilah brought them one step closer to fulfilling their overall commitment to expand AXA’s operations throughout the Middle East and match the evolving needs of their international clients. “Our customers will now be able to access us quicker and more easily…We trust that this reputation will carry us forward as we continue to grow and introduce new products to the kingdom,” Adamson said.

French Insurance Companies Mentioned

AXA

AXA Group is a worldwide leader in Financial Services. Headquartered in Paris, the AXA Group companies are engaged in life insurance, health insurance and asset management services among others. AXA’s operations are diverse geographically, with major operations in Europe, North America and the Asia/Pacific area.

Wasilah Insurance Agency

Wasilah Insurance Agency is a newly licensed insurance agency, providing multiple types of coverage options in the Kingdom of Saudi Arabia. The headquarters are based in Riyadh and additional 2 regional offices are scheduled to open in Jeddah and Dammam in 2012.

Prudential PLC, The UK’s largest insurer by market value, has reported a 25 percent increase in its half-year profits, beating industry estimates on the back of double-digit growth in key Asian regional markets of Indonesia, Singapore, Hong Kong and Malaysia. Prudential now believes that the strength of its Asian business will continue to protect the insurer against the worst of another potential financial crisis in the West.

Nine months after their controversial and unsuccessful bid to acquire AIA, AIG’s coveted Asian arm, for £21 billion (US$35.5 billion) in 2010, Prudential has focused on generating of cash reserves and improving profit margins to enhance its position on the global insurance stage, especially in the increasingly important emerging Asian markets.

According to a company statement released on Friday, Prudential made an operating profit of £1.06 billion (US$1.7 billion) in the first six months of 2011, compared with £968 million (US$1.57 billion) reported during the same period a year earlier. Markets had largely expected the insurer’s profits to be under £963 million (US$1.56 billion). Annual premium equivalent sales, a gauge of revenue that includes all annualized first-year premiums and a tenth of all single premium products, is now £1.8 billion (US$2.9 billion), demonstrating an annual increase of 10 percent. The considerable rise in profit has allowed the London-based insurer to boost its interim dividend by 20 percent, up to 7.95 pence a share.

Prudential attributed much of this growth to the particularly robust performance of its Asian operations where first-half new business profits rose 17 percent year-on-year to £465 million (US$72.2 million). The insurance company has now set an ambitious goal to double its profits from the region within the next two years, in an attempt to further capitalize on the growing demand for insurance among the expanding middle classes in emerging Asian economies such as Indonesia, Malaysia and Thailand.

“We have continued to concentrate on the fast-growing and highly profitable markets of Southeast Asia, and the positive momentum of 2010 has been maintained during the first half of this year, with new business profit up 17 percent in Asia and 22 percent in Asia ex-India,” Prudential Chief Executive Officer Tidjane Thiam said in the statement.

Prudential’s long-term operating profit forecast in Asia rose 24 percent to £326 million (US$384.5 million) in the first six months of 2011, boosted in particular by the performance of the Indonesian market, according to the report. With a 36 percent growth in first half profit to £95 million (US$154.8 million), and more than 100,000 active agents, Indonesia has outpaced the rest of Asia to become Prudential’s biggest market in the region for the first time. In China meanwhile, Prudential’s local joint venture operation, Citic Prudential Life, has planned to step up staff recruitment efforts after the insurer reported a 30 percent rise in annual premium equivalent sales, which are at £35 million (US$57 million) up from £27 million (US$44 million) in 2010. Success in these and other Asian markets has enabled Prudential to offset losses from India, where new business sales reportedly fell by 61 percent to £47 million (US$76.6 million) in 2011. The Indian market has been a particular challenge for multinational company’s after the local insurance regulator (IRDA) issued a mandate to re-register all insurance products in the country at the end of 2010. However, despite this noted administrative obstacle, Prudential remain confident about their long-term prospects in India.

Mr. Thiam added that the company would continue to develop its businesses in the region with an organic growth investment strategy and due financial diligence. Prudential has been using the cash generated through its legacy UK business to fund the group’s expansion in these booming Southeast Asian economies, which now account for nearly half the insurer’s overall sales. Between 60 to 65 percent of company profit in this region has been coming from the sale of protection products, the statement noted. The bancassurance channel meanwhile has accounted for 30 percent of Prudential’s combined annual premium, excluding India, across the Asia-Pacific.

The statement concluded with the Prudential CEO insisting that the company’s growth in Asia and ability to gradually de-risk its balance sheet has enabled the multinational insurer to become better insulated against the current market turmoil engulfing the United Sates and Europe. According to Prudential, the insurer’s sovereign debt exposure amounts to £53 million (US$86.3 million) in Portugal, Ireland, Greece and Spain, with £1 billion in reserve for use in the event of a second global economic downturn. “While these issues may have some temporary adverse effects across the globe, we continue to believe that our substantial presence in the growing and developing markets across Asia put us in a position to deliver relative outperformance in the medium term,” Mr. Thiam concluded.

While Prudential has demonstrated success from the continued development of its Asian operations, AXA has been able to generate similar positive returns by divesting from some of its assets in the region.

Last week, Europe’s second largest insurer, AXA, announced that their first-half profit had more than quadrupled to €3.99 billion (US$5.71 billion), beating estimates largely on the gains related to asset disposals in mature insurance markets. While AXA reported that total revenues for the period had fallen 5 percent to €46.84 billion (US$66.3 billion) from €49.15 billion (US$69.6 billion) a year-ago, these results were offset by an exceptional €1.44 billion (US$2.04 billion) gain linked to the sale of a stake in Taikang Life, a Chinese life insurer, to Goldman Sachs as well as the disposal of AXA’s operations in Australia, Canada and New Zealand. The ability of the French insurer to now profit from divestment contrasts with 2010 when AXA’s net income was hurt by a €1.48 billion (US$2.09 billion) exceptional loss related to the sale of most of its life insurance assets in the UK.

AXA Chief Executive Officer and Chairman Henri de Castries remarked in a statement that the results were a good start and showed that the company was progressing in the difficult circumstances surrounding the eurozone debt crisis. “The macro factors are not looking good at the beginning of this summer, but as far as we are concerned regarding our business and the things we can control we are pretty confident we will deliver on our targets,” he said. Through AXA’s restructuring plan, the insurer will continuing to retreat from mature over-saturated markets and chase lucrative business opportunities in Asia.

Insurance Companies Mentioned

AXA

AXA Group is a worldwide leader in Financial Services. Headquartered in Paris, the AXA Group companies are engaged in life insurance, health insurance and asset management services among others. AXA’s operations are diverse geographically, with major operations in Europe, North America and the Asia/Pacific area.

Prudential

Prudential has been in the insurance and financial services business since 1848. Today they operate throughout the UK, US and Asia offering international health insurance and retirement planning services, supported by 27,000 employees worldwide.

On January 1st 2011, the Malaysian Government made health insurance compulsory among the foreign working population, with the aim to eradicate the fraudulent and unpaid hospital bills that were piling up in the country. The Malaysian Government estimates the total figure to amount as high as RM$18 million, or USD$5.8 million.

From the first of January, Health Minister Datuk Seri Liow Tiong Lai, introduced the Foreign Worker Hospitalization & Surgical Insurance Scheme, making it compulsory for employers to provide health insurance coverage to foreign workers. Further to this, employers are enforced to provide workers compensation insurance to foreign workers, under the Foreign Workers Compensation Scheme.

With some employers budging to comply with the new scheme, Health Minister Datuk Seri Liow Tiong Lai reissued warnings to employers on 7th January, mandating that payment of premiums are made by March, or else foreign worker’s permits will not be renewed. Outstanding medical bills must be cleared, otherwise worker’s permits will also not be renewed.

The Foreign Worker Hospitalization & Surgical Insurance Scheme was introduced as a result of the ever-increasing fraudulent and unpaid hospital bills in Malaysia, said to be made predominantly by foreign workers receiving medical care in the country. Allegations have also been made against foreign patients profiteering from prescription medications, purchased from hospitals and artificially inflated to overseas customers.

The Foreign Worker Hospitalization & Surgical Insurance Scheme applies to all foreign workers in Malaysia. The scheme is limited to cashless claim services, within Government hospitals in the country. A set premium of RM150, or USD$49.07 has been applied for the insurance scheme, which covers up to RM10,000, or USD$3,270 a year in medical expenses. Those eligible under the scheme must be full time foreign workers, between the age of 18 to 59. Foreign workers covered under the insurance scheme, are entitled to hospital care, only within Non-Corporatised Malaysian Government Hospitals. Foreigners under the scheme do not need to provide any cash or guarantee letter from the insurer, they only need to turn up with their passport. The Malaysia Assurance Alliance Berhad (MAA) were appointed by the Ministry of Human Resources to partake in the design of both the Foreign Worker Hospitalization & Surgical Insurance Scheme (SKHPPA), and the Foreign Workers Compensation Scheme (FWCS).

There are around two million foreign workers registered in Malaysia, predominantly employed in the labour market, working in plantation farming as well as domestic maids. There is however a current shortage of maids working in the country, partly due to allegations of abuse among maids working in Malaysia. The collective figure of working foreigners, is however on the increase in Malaysia and the Government hopes to control this figure. Tuberculosis was once under control in Malaysia, however due to the migration of people from high risk countries the incidence rate is on the rise again. More than 17 thousand Tuberculosis cases are reported annually in Malaysia, with around14 % involving foreign workers.

Workers compensation insurance claims are very low among the foreign worker population in Malaysia. Only 75 % of foreign registered workers are said to be covered by workers compensation schemes by the employer. The Malaysian law mandates that employers must provide workers compensation insurance coverage to all permanent employees.

Employers are arguing that the premiums associated with the new compulsory health insurance mandate is too high, placing an unfair burden on employers. Deputy chairman of the Sabah Parti Keadilan Rakyat, Christina Liew argued “It is like penalizing the employers whenever the government imposes new policy with regard to foreign maids and plantation sectors… surely, the premium should not be so high as RM120 per worker”.

Although the coverage is relatively low, capped at a RM10,000, employers argue that the total amount in premium would exceed the hospital debt. Plantation farmers are debating the scheme and refusing to pay the premium. Shamsuddin, on behalf of the The Malaysian Employers Federation (MEF) are arguing “They have their own arrangement. Plantation workers’ medical fees are covered by the employers based on the law”, further adding “with more than two million foreign workers, the sum will total more than RM240 million annually.” Plantation farms are located outside of urban areas and generally have little access to hospitals. With plantation and farming estates paying costly premiums, food prices may inevitably increase.

There are 32 insurers said to be currently registered on the scheme. End of last year, following announcement of the scheme, insurance companies were competing to partake a share of the new market, however the scheme is said to be open to all insurers.

Those insurers who made their policies available on the 1st January include: Tokio Marine Insurance (Malaysia) Berhad; Malaysian Assurance Alliance Berhad; AXA Affin General Insurance Berhad; MUI Continental Insurance Berhad; The Pacific Insurance Berhad; Barjaya Sompo Insurance Berhad; Jerneh Insurance Berhad, Kurnia Insurance (Malaysia) Berhad; RHB Insurance Berhad; and Progressive Insurance Berhad. Others to be registered by February 15th include QBE Insurance (Malaysia) Berhad; Overseas Assurance Corporation (Malaysia) Berhad, Allianz General Insurance Company Berhad; Oriental Capital Assurance Berhad; and Sayarikat Takaful Malaysia Berhad.

Insurance Companies Mentioned:

Allianz General Insurance Company Berhad

Allianz General Insurance Company Berhad is a subsidiary of the Allianz Group, one of the leading global services providers in insurance and asset management. With approximately 153,000 employees worldwide, the Allianz Group serves approximately 75 million customers in about 70 countries. On the insurance side, Allianz is the market leader in the German market and has a strong international presence.

AXA Affin General Insurance Berhad

AXA Affin General Insurance Berhad is a subsidiary of the AXA Group, a worldwide leader in Financial Services. Headquartered in Paris, the AXA Group companies are engaged in life insurance, health insurance and asset management services among others. AXA’s operations are diverse geographically, with major operations in Europe, North America and the Asia/Pacific area.

Malaysia Assurance Alliance Berhad

Malaysia Assurance Alliance Berhad (MAA) was incorporate in 1968, MAA is a subsidiary of MAA Holdings Berhad. MAA is one of the leading insurance and financial services companies in South Asia, providing services mainly within Malaysia, as well as in Indonesia and the Philippines.

Berjaya Sompo Insurance Berhad

Berjaya Sompo Insurance Berhad is an insurance provider, offering a range of products including health insurance, personal liability and motor insurance. The company originated in 1974, merging its services with Sompo Japan Insurance Inc, Japan’s second largest insurer, in 2006.

Jerneh Insurance Berhad

Established in 1971, Jerneh Insurance Berhad is a subsidiary of Jerneh Asia Berhad, (JAB) an investment holding company. Jerneh Insurance Berhad is based in Malaysia, providing insurance products in accident, health insurance, household and other insurance products and services.

Kurnia Insurance (Malaysia) Berhad

Kurnia Insurance (Malaysia) Berhad is one of the leading General Insurance companies in Malaysia. Previously known as Industrial and Commercial Insurance, the company was established in 1978 and purchased by its present owners in 1991. Kurnia Insurance (Malaysia) Berhad specializes in motor, medical, personal accident, home and business insurance products.

Progressive Insurance Berhad

Progressive Insurance Berhad is a reinsurance company established in Malaysia. Founded in 1974, the company moved its headquarters from Sarawak to Kuala Lumpa in 1982. Today the company’s financial equity has been expanded following 94% stake jointly purchased by the Sabah State Government and Permodalan Bumiputra Sabah Berhad.

MUI Continental Insurance Berhad

Established in 1976, MUI Continental Insurance Berhad is a general insurance company. MUI Continental Insurance has branches throughout Malaysia, with leading US insurance underwriter CNA Financial Corporation, as one of its shareholders.

QBE Insurance (Malaysia) Berhad

A subsidiary of the QBE Group, QBE Insurance (Malaysia) Berhad is a joint venture company with MBf Insurans, merging in 2002. The QBE Group established services within Malaysia in 1905 and today it is one of the top 25 insurers and reinsurers worldwide. Headquartered in Sydney, Australia, QBE operates out of 49 countries around the globe, with a presence in every key insurance market.

RHB Insurance Berhad

RHB Insurance Berhad is a subsidiary of the RHB Banking Group, the first local bank established in Malaysia in 1913. RHB Insurance Berhad provides a range of general insurance services including health, property, automobile, personal liability, among other insurance products and risk management services.

AXA, the France based insurer, has reportedly entered talks with Australian wealth management group AMP in a bid to take over AXA Asia Pacific Holdings Ltd. The joint bid – in excess of A$ 10 billion (US$ 10 billion) – has come to light after previous takeover pursuers National Australia Bank (NAB) had their bid rejected by regulators.

The potential deal follows the failed takeover valued at A$13. 3 billion (US$13.5 billion) for AXA Asia Pacific Holdings Ltd by National Australia Bank (NAB) after it was blocked by the Australian competition watchdog, which ended NAB’s pursuit. It has now emerged that AMP has entered into fresh talks with AXA to acquire AXA Asia Pacific. It is thought unlikely that AMP will be able to top their 2009 bid of A$12.2 billion (US$12.2 billion), which was comprised of cash-and-shares.

A previous move by AMP in 2009 would have seen France’s AXA SA takeover AXA Asia Pacific’s Asian operations, with the Australia and New Zealand operations left to AMP. Initially, AXA teamed up with AMP, but that approach was rejected; subsequently AXA launched an improved deal with NAB which amounted to A$13.3 billion ($13.5 billion). This bid was finally blocked in September 2010 on the grounds of competition concerns.

If the proposed bid is completed, AXA of France will assume direct control of the Asian arm of AXA Asia Pacific and gaining access to the fast-growing Asian region, while AMP will take control of the Australian and New Zealand operations. AXA Asia Pacific Holdings operates in Hong Kong SAR, China, Thailand, Indonesia, Singapore, Philippines, India, Malaysia, Australia and New Zealand, providing life insurance and wealth management services across the region.

The potential joint agreement between AXA and AMP for AXA Asia Pacific is in the early stages of discussion, with all parties still seeking to agree basic terms; there is no official confirmation of transactions at this time. However, even though AMP’s original bid was trumped by NAB, the Australian Competition & Consumer Commission stated that AMP’s possible acquisition of AXA Asia Pacific would not have an adverse impact on competition and Australian regulators would be minded to clear a revised bid on this basis.

AXA is Europe’s second-biggest insurer and has stated that emerging insurance markets remain a prime target for the group in order to boost its position on the global stage; the Asian region, therefore, offers significant potential for the international insurance company.

AMP provides banking, loan, insurance, investments and retirement services, and, if successful in acquiring AXA Asia Pacific’s New Zealand and Australia operations, will be able to enhance its presence in a mature Australia and New Zealand financial services market; a market which has remained robust since the global financial crises in 2007-2008.

If the deal is completed, it will mean the French insurer AXA will strengthen its presence in the Asian region – a move which will see them increase their reach in countries such as China, India and Indonesia; countries which have emerged from the 2007-2008 world financial crisis as leading insurance markets.

AXA recently entered into arrangement will ICBC of China, over the joint venture AXA-Minmetals in a move which will specifically reinforce operations in the Chinese insurance market.

Companies Mentioned:

AXA

AXA Group is a worldwide leader in Financial Services. Headquartered in Paris, the AXA Group companies are engaged in life insurance, health insurance and asset management services among others. AXA’s operations are diverse geographically, with major operations in Europe, North America and the Asia/Pacific area.

APP

AXA Asia Pacific Holdings Ltd. (AAP) is responsible for the Global AXA Group’s life insurance and wealth management businesses in the Asia-Pacific region. We have operations in Hong Kong SAR, China, Singapore, Indonesia, Philippines, Thailand, India, Malaysia, Australia and New Zealand. Established as National Mutual in Australia in 1869, AXA Asia Pacific has grown significantly over time. In 1995, the company demutualised and AXA SA acquired 51% of the company. National Mutual listed on the Australian and New Zealand stock exchanges in October 1996 and adopted the AXA brand in 1999.

AMP

AMP Group (AMP) is one of Australia’s largest retail and corporate superannuation providers, and one of the region’s most significant investment managers with more than A$104 billion in assets under management (as at 30 June 2009), with a market-leading network of more than 2,000 qualified financial planners. AMP Limited has one of Australia’s largest shareholder registers, with more than 820,000 shareholders. Individual investors comprise around 46 per cent of AMP’s shareholder base and live in more than 100 countries around the world. Institutional investors constitute around 54 per cent. AMP traces its heritage back to 1849 as a mutual company, AMP Limited listed on the Australian and New Zealand Stock Exchanges in mid-1998.

NAB

National Australian Bank (NAB) is a financial services organisation of nearly 40,000 people, more than 1800 branches and service centres, and more than 450,000 shareholders. NAB provides products, advice and services through its major Australian franchise and businesses in the United Kingdom, New Zealand, the United States and Asia. NAB is motivated to make a positive and sustainable impact in the lives of their customers and communities, and so build a business that can deliver on their goal of superior returns to shareholders.

Despite Thailand’s recently social turmoil, political uncertainty and world financial crises, the Thai domestic insurance market is targeting an overall increase of 6% in insurance premiums by 2014.

The growth in the general Thai insurance market is driven by a combination of factors derived from the improving prosperity of the population, which translates into increased demand for protection of property, auto and savings, together with health and life cover.

Read the rest of the Growth Predicted for the Thai Insurance Market article

Resolution Ltd is set to acquire Bupa’s Health Assurance business in a £102 million (US$164 million:122 million Euros) deal.

As part of Resolution Ltd’s strategy to build a substantial share of the UK life insurance market, the company has reached an agreement with Bupa to acquire its life, income and critical illness insurance business. This enhances the previous acquisitions by the Clive Cowdrey formed company – Resolution Ltd – and follows the purchase of Friends Provident in 2009 for £1.9 billion (US$3.04 billion:2.28 billion Euros), and the £2.75 billion (US$4.4 billion:3.3 billion Euros) acquisition of AXA’s UK life assurance and savings arm earlier this year.

The £102 million (US$164 million:122 million Euros) acquisition of Bupa Health Assurance (BHA) by Resolution Ltd will be completed through the Resolution Ltd life subsidiary Friends Provident Life and Pensions Limited in a move to further expand the Resolution’s UK Life Project and augment its share of the life protection business.

The deal by Resolution Ltd follows the largest deals completed by the insurance buyout specialist, with a £2.75 billion (US$ 4.4 billion:3.3 billion Euros) for the British branch of AXA in June of this year, and the £1.8 billion (US$ 2.9 billion:2.2 billion Euros) in 2009 for Friends Provident. Resolution Ltd. will be using its own capital in reserves to acquire the UK based Bupa Health Assurance.

Entrepreneur Clive Cowdery founded Resolution Ltd in 2008 as an investment platform in the UK life sector. The move for Bupa Health Assurance continues Resolution Ltd’s further expansion of insurance products, creating access to Bupa’s income, critical illness and life insurance range of products.

The acquisition will strengthen Resolution’s market share for individual protection products and create another revenue stream for Friends Provident in the UK, and global market, for this sector of the insurance business. In addition to the deal, an agreement between Friends Provident and Bupa will enable the brands to work in partnership, with the ability to introduce each company’s products through their respective distribution channels.

This acquisition will strengthen the Resolution Group’s risk business product range and improve the profitability of the protection business, which it could sell along with the group’s corporate pensions.

The decision by BUPA to sell BHA is part of the company’s strategy to focus on the healthcare sector and UK health insurance products and services. The move by the Bupa Group follows a surplus of £428 million (US$ 657 million:513 million Euros) announced in June 2010, after a period of stagnation in the UK market.

Speaking about the decision, the Managing Director of Bupa Health & Wellbeing, Dr Natalie-Jane Macdonald, said: “We are proud of Bupa Individual Protection and Bupa Group Risk, which both have reputations for high-quality products and customer service. Our decision to sell is based on strategic fit. The sale will allow Bupa Individual Protection and Bupa Group Risk to benefit from belonging to a company with a strong focus on both protection and risk. Importantly, this decision also allows Bupa to concentrate on healthcare products and services”

BHA was established in 1994, and is a wholly owned subsidiary of Bupa, created to provide individual and group protection insurance, in addition to Bupa’s primary business of private medical insurance in the UK market.

For the first half of 2010, Resolution’s individual protection premiums produced a market share for AXA Sun Life of 6%, with the Friend Provident market share standing at 5%. In the same period, the BHA individual protection premiums were £11 million which represented a 3% market share.

In 2009, Bupa Health Assurance had a 24 percent increase in new business for their critical illness and income protection products. The deal is expected to be completed by the beginning of 2011, with Bupa Health Assurance becoming a stand-alone entity within the Friends Group in the meantime.

The Resolution Ltd’s overall goal is to build a life insurer with an embedded value of £10 billion (US$ 16 billion:12 billion Euros) by 2013 and then to either sell or float the group on the stock market. The respective embedded values currently are estimated at £228 million (US$ 365 million:273 million Euros) for BHA and £6 billion (US$ 9.6 billion:1.2 billion Euros) for Resolution Ltd existing business.

In 2008, the UK insurance market was the biggest in Europe and the third biggest globally, which a total premium income of £215.3 billion (US$ 344 billion:258 billion Euros).

Final completion of the deal is subject to Financial Services Authority (FSA) and the Guernsey Financial Services Commission approval.

Insurance Companies Mentioned:

Bupa

Bupa was established more than 60 years ago in the UK and is now has ten million customers in over 190 countries, and over 52,000 employees around the world. Bupa is a leading international healthcare provider, offering personal and corporate health insurance, workplace health services and health assessments. As a provident association Bupa has no shareholders, because of this it uses its profits to invest in healthcare and medical facilities around the world. Bupa has operations around the world, principally in the UK, Australia, Spain, New Zealand and the US, as well as Hong Kong, Thailand, Saudi Arabia, India, China and across Latin America.

Resolution

Resolution Operations LLP is a privately owned advisory and operating firm which provides services to Resolution Ltd. Resolution Operations LLP is part of the Resolution Group that also includes Resolution Capital Limited and Resolution Financial Markets LLP. Resolution Capital Limited facilitated the creation and initial public offering of Resolution Limited. Resolution Financial Markets LLP undertakes for Resolution Operations LLP a range of activities that include working with investors to facilitate the direct placing of equity and debt with institutions.

Friends Provident

Friends Provident Group plc, a life and pensions company, was founded in 1832 and
was acquired by Resolution Limited in 2009. Friends Provident provides a range of financial products and services for individual customers, commercial businesses, and other institutions. Its protection products include life cover, critical illness cover, income protection and business protection.

AXA

AXA Group is a worldwide leader in Financial Services. Headquartered in Paris, the AXA Group companies are engaged in life insurance, health insurance and asset management services among others. AXA’s operations are diverse geographically, with major operations in Europe, North America and the Asia/Pacific area.

The takeover bid by the National Australian Bank (NAB) for AXA Asia Pacific Holdings (AXA APH) has been rejected by the Australian Competition and Consumer Commission (ACCC) on the grounds of insufficient certainty that the proposed undertakings offered by the parties satisfy its competition concerns.

At the heart of the concerns for the commission were the distribution of financial services products through electronic investment platforms, and more specifically, the impact that the merger of NAB and AXA APH would effect on such distribution channels.

The precedent of NAB having bought the Australian operations of Aviva last year, with the purpose of gaining access to its successful Navigator platform, were also taken into consideration by the ACCC. Were the AXA APH acquisition to have gone ahead NAB would have gained control of the new North platform, which is regarded to belong to the next generation of electronic distribution platforms, and would have been able to capture a majority of the market in this area.

To address this concern NAB had proposed to sell the new North Platform, wealth.net, to IOOF, a 160-year+ Australian financial services organisation managing funds. However, the ACCC was not persuaded that this move would have helped to free up market competition in the distribution of retail investment products. In a statement released by the ACCC, Deputy Chairman Peter Kell said, “The undertakings as proposed place a heavy reliance upon IOOF having sufficient distribution capability to provide an effective competitive constraint upon existing key players in the foreseeable future.”

Analysts believe that the merger between NAB and AXA APH would not have given the bank a dominant position in the Australian retail life insurance market, noting that the decision by the ACCC appears to have rather been focused on the distribution of investment products.

AXA and NAB have indicated that they both will review in detail the rejection by the ACCC before making a decision on their next step.

Companies mentioned:

AXA

AXA Group is a worldwide leader in Financial Protection. AXA’s operations are diverse geographically, with major operations in Europe, North America and the Asia/Pacific area.

Aviva

Europe’s fourth largest insurance company, with more than 300 years of experience in the global insurance industry, Aviva is committed to the safety and satisfaction of its customers. They sell a broad range of insurance products including motor and property insurance, protection and health insurance, business insurance, life insurance and pensions.

NAB

National Australian Bank (NAB) is a financial services organisation of nearly 40,000 people, more than 1800 branches and service centres, and more than 450,000 shareholders. NAB provides products, advice and services through its major Australian franchise and businesses in the United Kingdom, New Zealand, the United States and Asia. NAB is motivated to make a positive and sustainable impact in the lives of their customers and communities, and so build a business that can deliver on their goal of superior returns to shareholders.

IOOF

For over 160 years, IOOF has accompanied Australians’ journey towards a secure and rewarding financial future. IOOF’s strength and reputation as a financial services organisation was cemented with the merger between Australian Wealth Management in April 2009 and the acquisition of Skandia in March 2009. The Group’s products and services are designed to accompany the lives of around 700,000 Australians from wealth accumulation into retirement and across to the next generation.

After having established a dedicated health insurance operation in Asia, AXA PPP International is now in the process of revamping its distribution network to increase their capabilities in the region. Teaming up with AXA Asia General Insurance (AGI), their partnership aims to increase the volume of business for both life and general insurance in Singapore, Malaysia, Indonesia, Thailand, Hong Kong and China, places where AXA has already established a presence.

The AXA PPP – AGI joint venture plans to target local markets first, tightly linking the procured business towards improving the proposition of AXA PPP International to global corporations seeking to cover both expatriate employees and local national employees. In other words, provide expatriate cover as and when the client wants it, plus present them with a local market proposition for local employees.

According to the feedback from global corporate clients of AXA PPP International, it is no longer good enough to just buy a UK private medical insurance scheme and cover their expatriate employees, but they may also want to cover a high number of their local employees in the country where their office is located.

The new Asian operation will initially build relationships with local and regional brokers, whilst looking at how to comply with the legal and regulatory challenges to also work with UK-based brokers.

Insurance Company mentioned:

AXA PPP

Originally known as PPP Insurance, the company became part of the Global AXA Group in 1999 and changed its name to AXA PPP in 2002. AXA PPP is now an international health insurance company with over 2 million customers around the world.

Based on brisk business in motor insurance and the expanding health insurance industry in India, Bharti Axa seeks to hire 2,000 new employees to capitalize on growth opportunities.

Bharti Axa, which is a joint venture between Bharti Enterprises and international insurance company AXA Group, had earned INR 3.2 billion (USD 68.7 million) in the 2010 financial year, a 1000 percent increase over the INR 320 million (USD 6.87 million) earned the previous year. Much of that growth was due to expansions in Bharti Axa’s retail distribution network, bringing in more customers; and the fact that the motor insurance sector in India is growing by 20-25 percent every year.

Bharti Axa currently employs 1,300 people throughout 57 offices in India, with a further presence in 116 locations. The company has set aside INR 2.5 billion (USD 53.7 million) for further growth, aiming to hire 2,000 more people to take advantage of expanding markets. The industrial, manufacturing, motor and health insurance industries are expected to double in the next 5-6 years to about INR 700 billion (USD 15 billion).

Amarnath Ananthanarayanan, the Managing Director and CEO of Bharti Axa said that “With the health and auto sectors poised to grow rapidly in the country, there is a lot of scope for general insurance players. We are looking at expanding our retail operations in the country and hiring more people this year. By this year, we will have 3,000 people,”

Bharti Axa is also awaiting Insurance Regulatory and Development Authority (IRDA) approval for 62 new insurance products, which it will add to its lineup of 56 non-unit linked insurance plans (ULIPs) within the next few years.

Insurance Companies Mentioned:

AXA Group

AXA Group is a worldwide leader in Financial Protection. AXA’s operations are diverse geographically, with major operations in Europe, North America and the Asia/Pacific area.

Bharti Axa General Insurance

Bharti AXA General Insurance is a joint venture between Bharti Group and AXA Group. Founded in July 2007 in Bangalore, India it now has over 40 branches across India offering a variety of insurance products for retail, commercial and rural customers.

Barclays plc has reportedly initiated round table talks over selling half of its French life insurance business, Barclays Vie, according to French Daily La Tribune.

The sale price of the 50% stake in Barclays French life insurance division is currently being valued at around EUR 65 million (USD 78 million). A number of European insurers are said to have expressed interest in buying the stake, including: Allianz, Aviva, AXA, Generali, CNP, La Mondiale and Swiss Life.

Some observers believe that any deal would be similar in arrangement to Barclays tie-up with CNP in June 2009 over Barclays Vida y Pensiones Compañía de Seguros (BVP), which was Barclays’ life insurance operations in Portugal, Italy and Spain. In the previous deal, CNP purchased a 50% stake in BVP for an up front price of EUR 140 million (USD 168 million), with further monetary considerations of up to EUR 450 million (USD 540 million) payable to Barclays over a 12-year period depending on business milestones reached in that time as well as a 25-year agreement to cooperate on marketing and distribution.

Insurance Companies Mentioned:

Barclays plc

Barclays plc is a large financial services company operating around the globe. They offer a wide variety of services including personal banking, corporate business banking, investment banking and wealth management and private banking. After starting operations more than 300 years ago, Barclays now operates in more than 50 countries, employing over 144,000 people and servicing more than 48 million customers worldwide.

Allianz

Allianz Group is one of the leading global services providers in insurance and asset management. With approximately 153,000 employees worldwide, the Allianz Group serves approximately 75 million customers in about 70 countries. On the insurance side, Allianz is the market leader in the German market and has a strong international presence.

Aviva

Europe’s fourth largest insurance company, with more than 300 years of experience in the global insurance industry, Aviva is committed to the safety and satisfaction of its customers. They sell a broad range of insurance products including motor and property insurance, protection and health insurance, business insurance, life insurance and pensions.

AXA

AXA Group is a worldwide leader in Financial Services. Headquartered in Paris, the AXA Group companies are engaged in life insurance, health insurance and asset management services among others. AXA’s operations are diverse geographically, with major operations in Europe, North America and the Asia/Pacific area.

CNP Assurances

CNP has more than 150 years of experience in the insurance industry. CNP focuses mainly on pensions, personal risk insurance and savings plans in the personal insurance market through a wide variety of insurance products. They have more than 22 million policyholders, 14 million of which are in France.

Assicurazioni Generali SpA

The Generali Group is one of the most significant participants in the global insurance and financial products market. The Group is a leader in Italy and Assicurazioni Generali, founded in 1831 in Trieste, is the Group’s Parent and principal operating Company. Generali is one of the leading global players in the assistance sector thanks to the Europ Assistance Group, active in more than 200 countries with services in the motor, travel, healthcare, home and family sectors. In recent years, the Group has made a significant return to 14 central-eastern European markets and has set up offices in the principal markets of the Far East, including China and India.

AG2R La Mondiale

La Mondiale originally started in Lille, France in 1905, it continued as a life insurance company up until La Mondiale and AG2R decided to merge operations in 2001. The process gradually took place until January 2008, when the two companies created a Mutual Assurance Group Company (MAGC), leaving them as the 8^th largest personal insurance group in France.

Swiss Life

The Swiss Life Group is one of Europe’s leading providers of life insurance and pension solutions. In Switzerland, France and Germany, the Group offers individuals and corporations comprehensive advice and a broad range of products through its own sales force as well as brokers and banks. Swiss Life provides international corporations with employee benefits solutions from a single source, and is one of the global leaders in structured life and pension products for international high net worth individuals.

The departure of Nick Groom as the Distribution Director for AXA PPP healthcare after just over one year in the position, has been swiftly followed by the naming of James Freeston as his interim successor. Mr. Freeston will be reporting directly to AXA PPP CEO Keith Gibbs, and will oversee the sales and marketing activities of the company for large and small corporate customers, including the intermediary relationships that cover medical insurance, occupational health, employee assistance programmes and other support services for employee well-being provided by AXA IACS.

Mr. Freeston has over 22 years of experience performing at varied sales and marketing roles working mostly at AXA PPP in the UK medical insurance industry, making him well-suited to handle the responsibilities demanded by his interim role as distribution director. He has been a sitting member on AXA’s management committee, and will continue in this capacity in the meanwhile.

In a separate note related to fitness during the upcoming Football World Cup, Ms Lucy Wyndham-Read, a personal trainer from AXA PPP has made the suggestion that ladies remember to get kitted up and do some exercise. The suggestion goes to football fans that intend to watch televised games from home.

In particular, her advice centres against allowing the football matches to replace the normal activities of an individual, and suggests planning a swim, jog or brisk walk around the fixtures. A reminder of the options available whilst supporting their favourite team during an actual game were also highlighted by Ms Wyndham-Read, including side reaches and star jumps.

Similar to the above exercise advice during the World Cup, the Food Standards Agency is publishing a healthy-eating guidance to the public with the aim of ensuring that people don’t let themselves go too much.

It is estimated that TV football fans, affectionately known as "couch potatoes", will put on an average of almost five pounds (2.27 kilograms) during the four weeks of the World Cup, fuelled by soaring sales of junk food delivered to their doorsteps. This projection is based on an extra intake of 340 calories per World Cup match.

On average, according to research done by Men’s Health Magazine, a man will drink four cans of beer, eat three slices of pizza, half a bag of crisps and half a pot of dip, equivalent to 1,913 calories.

It is advised that a combination of lack of exercise and poor diet may even lead to death, according to a study by AXA PPP healthcare. Since men will spend an average of 38 hours watching the football, consuming up to 20,180 calories, in particular persons with an underlying coronary heart disease, the resulting obesity and increased risk of diabetes, heart disease and stroke should not be overlooked.

The message is not to discourage people from enjoying the fun and the great atmosphere the tournament brings, but to be alert of the risks of overindulging in junk food whilst remaining inactive.

Insurance Company mentioned:

AXA PPP

Originally known as PPP Insurance, the company became part of the Global AXA Group in 1999 and changed its name to AXA PPP in 2002. AXA PPP is now an international health insurance company with over 2 million customers around the world.

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