Posted on Nov 19, 2010 by Sergio Ulloa
The Italy-based insurer, Assicurazioni Generali, has released third-quarter earnings for 2010, with the third-largest European insurer reporting a quarterly profit increase of 13 percent. Overall net income jumped to €440 million (US$602 million) compared to €390 million (US$538 million) generated in the same period in 2009.
Results from Generali's life-insurance unit offset sluggish figures from their non-life operations during the third-quarter this year; Generali's non-life unit being adversely impacted by catastrophic events which included the floods in Europe and the earthquake in Chile. In the life insurance sector, Generali produced an 8 percent increase in premiums during the first nine months of 2010 realizing total revenue of €3.72 billion (US$ 5.09 billion) at the end of September 2010, compared to €3.42 billion (US$ 4.68 million) during the same period in 2009.
Following the release of third-quarter results by the Trieste-based insurer, the multi-national group highlighted prospects for organic expansion of global activities, with opportunities in both the European and Asian regions. Within Europe, the company considers that there is scope for growth in its home domicile Italy, along with Germany, France and the Eastern European bloc countries. The shortfall in the pension and savings business in Europe - estimated to amount to over a trillion dollars - is providing insurers such a Generali with a significant target market. In the former Soviet Union countries, scope exists to expand operations and network channels as these markets evolve.
Following in the footsteps of many of the world's biggest insurers, Generali is looking towards China, India and Vietnam
to accelerate premium returns as opportunities in the Asian region emerge after the 2007- 2008 global financial crisis.
Generali has operations across Asia, including Hong Kong, China, India, Indonesia, Japan, Thailand, Vietnam and the Philippines. The Italian insurance giant has a strong base across the Asian region, with distribution networks and partnering arrangements in mature and flourishing insurance sectors.
While Generali has a strong distribution network both in Europe and in the developing Asian insurance markets, rival insurers have also increased their reach in these markets - particularly in the thriving Asian region - with companies such as Aviva
establishing an Indonesia partnership and Bupa
teaming up with a local insurer in India.
Positive results from its life-insurance unit enabled Generali to obtain preliminary licensing from the Vietnam Ministry of Finance for the group's Vietnamese operation - the Generali Vietnam Life Insurance Company Ltd - which gives the Italian insurer access to an expanding Vietnamese life insurance sector. However, it faces fierce competition from Prudential Vietnam, Korea Life and Ace Life who have all enjoyed strong growth in the life market during 2010. Vietnam has experienced significant expansion through foreign investment in the country by insurers such as Prudential Vietnam, Manulife Vietnam and Dai-ichi Mutual Life Insurance - all being established insurance providers.
Future Generali - a joint venture in India - with the Mumbai based Future Group provides life and non-life insurance products operated through 97 branches in 84 India cities. Along with China, India has become an economic powerhouse, with the Indian insurance industry
flourishing in line with improvements in prosperity. Future Generali faces stiff competition in India, with other European based rivals such as Bupa. Bupa formed a partnership with a local Indian insurer to form MaxBupa
in a bid to take advantage of increasing demands for private healthcare.
For the Generali Group to expand through organic growth, it needs to focus on product innovation and expansion of distribution channels in countries like India and China in order to take advantage of the vast populations in these countries with increasing demands for protection products. Future Generali took advantage of changes made by the Indian Insurance Regulatory and Development Authority (IRDA) in 2010, with the development of new products in life and health insurance
; the Indian health insurance sector having grown by 25.2 percent between April 2009 to March 2010.
In China - the prime focus for the multi-national insurer's expansion and establishment of efficient network channels - Generali has formed a joint-venture with the China National Petroleum Corporation (CNPC) to create the Generali China Life Insurance Company Ltd. This company was established in 2002 providing pension, accident, life, medical and education insurance products. The Generali China Life Insurance Company Limited was the first sino-foreign company to be approved by the Chinese authorities. As in other Asian countries, competition is increasing with multi-national insurers expanding operations in this the country with the second wealthiest economy in the world. Major European insurers such as AXA, Prudential, Aviva and Zurich, together with American rivals AIG - through their Asian arm AIA - battling to strengthen their positions in the rapidly expanding Asian insurance industry.
It is becoming more apparent that growth in global insurance markets is shifting east, with emerging demand in Asian countries driving premiums and profit margins. In contrast, traditional markets in Western Europe and the USA are more static but still offer companies good returns and a challenge to retain market share.
Companies insurance Mentioned:
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.
Future Generali India Life
Future Generali India is a joint venture between the Indian Future Group and Italian Generali Group, it participates in both India's life and non-life insurance markets as Future Generali India Life Insurance Co. Ltd. and Future Generali India Insurance Co. Ltd. The company has 91 branches in 83 locations around India, and works with over 44,000 licensed advisors.
Generali China Life Insurance
Generali China Life Insurance Co., Ltd. (GCL) was established 2002 as a joint-venture between China National Petroleum Corporation (CNPC) and Assicurazioni Generali S.p.A. (Generali), was the first Sino-foreign joint-venture insurer approved by Chinese Government after China joined the World Trade Organization.
Headquartered in Zurich, Switzerland, Zurich Financial Services Group is an insurance-based financial services provider with a network of subsidiaries and offices in North America and Europe and also in Asia-Pacific, Latin America and other markets. Zurich is one of the world's largest insurance groups, and one of the few to operate on a truly global basis. With 60,000 employees serving customers in more than 170 countries, our business is concentrated in three business segments: General Insurance, Global Life, and Farmers.
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.
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, and China and across Latin America.
Dai-ichi Mutual Life Insurance
Established in 1902, Dai-ichi Mutual Life Insurance Co. is the oldest mutual insurer in Japan in Vietnam, Dai-ichi Life ranks third with 50 offices, 400 staff and 13,000 agents. The Dai-ichi Mutual Life Insurance Co. acquired Vietnam's Bao Minh-CMG joint venture in 2007 to establish Dai-ichi Life Vietnam and increased its chartered capital to US$25 million.
Korea Life Insurance
Korea Life was found in 1950, committed to the growth and development of the life insurance industry by protecting the rights and interests of the industry and policy holders. Korea Life held 4% of the life and non life insurance market in 2009.
Prudential Vietnam is one the leading insurance providers in Vietnam, offering services to millions of Vietnamese people via the network of over 155 customer service centers, branch offices and general agency and business partner offices nationwide. Prudential Vietnam now takes the lead in the life market with over 40% market share in terms of premium income.
Manulife Vietnam was the first 100 per cent foreign-owned life insurance company in Vietnam, being its operation in September 1999 as a joint-venture called Chinfon-Manulife Insurance Company (CMIC). Manulife in Vietnam has grown rapidly to become a world class company providing a competitive array of financial protection products and services to Vietnamese customers. Since commencing operations, Manulife has helped more than 300,000 middle to upper-income Vietnamese plan right for their life.