HONG KONG (Reuters) - Canada’s Sun Life Financial Inc expects to double its profit in Asia over the next five years on strong demand for insurance in key markets like China where it was keen to raise its ownership in a joint venture, its chief executive said.
Asia is a battleground for foreign insurers including Aviva, Prudential Plc and Sun Life who are attracted by the region’s lower insurance penetration levels and faster growth rates for insurance premiums.
“We are bullish on not just the insurance business (in Asia), but wealth management and asset management as well,” Dean Connor told Reuters, adding the company’s post-tax profits of about C$450 million ($337.94 million) in Asia could double over five years.
Sun Life, which operates in seven Asian markets including China, Hong Kong, India, the Philippines and Malaysia, has in recent years made a series of deals in the region to acquire businesses or raise its ownership in several of those markets.
Connor said Sun Life would like to increase its 25 percent holding in the Chinese insurance joint venture as a result of Beijing’s plan to lift the ownership cap to 51 percent for foreign insurers.
Beijing said last year it planned to lift the ownership cap to 51 percent for foreign insurance joint ventures in 2020 and remove the limit completely two years later, which would allow for further expansion.
The regulatory guidelines for the stake hike by foreign insurers in their Chinese ventures have not been announced yet and there is no timeline on their implementation.
Sun Life Financial Asia accounted for 15 percent of the group’s underlying net income in the first quarter of this year, according to financial reports posted on its website.
“We have grown rapidly organically but we have also invested around a billion dollars in capital in Asia ... We will continue to look for those kind of opportunities across Asia,” Connor said, referring to the company’s acquisition plans.
Reporting by Sumeet Chatterjee; Editing by Muralikumar Anantharaman