Posted on Mar 26, 2010 by Sergio Ulloa
Following its acquisition of American Life Company
(ALICO), MetLife now aims to become a force in the Middle East, which had been missing from its portfolio of 18 countries.
Given that the growth of life insurance sales is happening outside of the US, and ALICO has been in an excellent position to strategically capitalise this segment of the market in Asia, it is only natural for MetLife to take advantage of this opportunity to extend its cover to the Middle East.
Insurers are particularly drawn by the fact that the Middle East is currently under-insured in a severe manner. In developed countries premiums reach about 15 percent of their GDP whilst per-capita premiums in the Gulf account for an average of only 1 per cent of GDP, and it is estimated that insurance premiums grew 28 percent last year.
This calling has brought 58 insurers to the UAE, with approximately half of them being foreign companies. This intense competition has driven down premiums to some of the lowest levels in the world.
Within the particularly undeveloped segment of personal insurance, car insurance and health insurance are the most common products, especially since regulators have started to gradually make them compulsory. Life insurance, the core business of MetLife and ALICO is an even newer concept in this market.
Whilst awaiting regulatory approval for its ALICO purchase, MetLife plans the integration of the two companies and continue watching the markets for opportunities. MetLife hopes to close the deal by 01 November of this year.
Actively present in 55 countries with a 20-million customer base, the presence of ALICO in the Middle East and Japan complements activities of MetLife in China, India and Brazil. MetLife counts with a 70-million customer base.
The success story of ALICO made it one of the crown jewels of AIG, before being bailed out by the US government.
Insurance Companies mentioned:
Possessing over 140 years of insurance expertise, MetLife aims to be an innovator in the field of international Life insurance. Globally, MetLife is able to offer its clients accident and health insurance, life insurance, disability income protection, and retirement and savings products.
Alico provides a broad and innovative range of insurance and savings products to individual customers, corporate clients and high net worth customers. With products to support every aspect of their customers' lives, and provide comprehensive cover for the employees and commercial needs of their business clients.