
Mar
17
AIA and Alico sales herald a New Life Insurance Market Era in Asia
Posted on Mar 17, 2010 by Sergio Ulloa (G+)
Once the ink dries on the deals for AIG to divest American Life Company (ALICO) and American International Assurance Company (AIA), there will be a stakeholders shift in the Life Market in Asia, as observed by market analysts. Since the effects of the global financial crisis started to be felt over a year ago, there has been a transformation of the insurance markets in Asia, with the sale of American Life Insurance Company to MetLife Inc. and the purchase of AIA Group by Prudential plc becoming the most recent adjustments in the Asian markets. It is envisioned that the acquisition of Alico by MetLife in Japan will bring about a refreshed competitive environment for both local and foreign players in the Japanese life insurance market. This latest deal by MetLife together with the IPO next month of Dai-ichi Life's stock may exercise some pressure to the leading life insurers such as Nippon Life Insurance Co. Ltd., Sumitomo Life Insurance Co. and Meiji Yasuda Life Insurance Co. to consider their strategic alternatives. The combination of MetLife and Alico in Japan is likely to produce innovative life products that meet the demands for savings and long-term care for their ageing population and transitioning demographic. Foreign players entering the Japanese market are well positioned to introduce new savings products, something that the local insurers must factor in whilst drafting their new competitive strategies. In general, the competitive landscape of the Asian insurance market has been altered by the financial tsunami. One of the noticed effects in the Japanese market is that local insurers have gained a larger share at the expense of the portion of business held by foreign insurers disposing of their Asian operations, as exemplified by the acquisition made by MetLife. Likewise, Prudential is now well positioned to gain market share in the rest of Asia, following the acquisition of AIA. Increased global reach will be another positive impact for MetLife, increasing its presence from 17 to 64 countries as a result of its Alico acquisition. MetLife move into the top-five tier in many emerging markets including Latin America, the Middle East, Central and Eastern Europe among others. The integration of Alico into MetLife is scheduled for completion towards the end of this year. The majority of employees currently working for Alico will be retained, in favour of a smooth integration process into MetLife. Insurance Companies mentioned: AIG



