Mr Trung Tran, an insurance scientist at CreditSights, said there has been an “unusual speed of significant events” in the market, and more combination could be on the horizon.
He said that Singapore has a large number of insurers and that the Taiwanese industry and Southeast Asia as a whole are both in high interest from international investors.
He cited the region’s massive population as being” considerably underinsured.”
Some carriers ‘ local offices can be located in Singapore. ” The territory is expected to experience solid long-term progress with fair profitability”, said Mr Tran.
When the next consolidation takes place will depend on due diligence, conversations, market timing and governmental demands, he added.
SPECIFIC Factors
But Mr Frank Yuen, a vice president and top payment officer at Moody’s Ratings, was doubtful if the latest deals were portion of a larger pattern of consolidation.
In Aviva’s situation, the company decided that Singapore was a non-core property to them and decided to outsource its stake in Singlife, he said. Sumitomo also took it because Chinese carriers are searching for reliable foreign resources.
Allianz’s involvement in Income Insurance, however, is part of the bank’s want to come back to Asia.
” Both purchases were driven by various intentions, and also the specific aspects of the original owners”, said Mr Yuen.
He added that the industry’s consolidation obstacles may increase as a result of these mergers ‘ high costs.
Allianz is offering S$ 2.2 billion ( US$ 1.64 billion ) for 51 per cent of Income Insurance’s shares.
” It’s hard to find a client, to be honest, although there are dealers”, said Mr Yuen.
Business SHAKEUP?
On whether current dealmaking may change market leadership, the analysts had differed.
Because the talks did n’t create new players, Mr. de Silva claimed that the competitive landscape may stay the same.
CreditSights noted that there is still room for improvement, but not so much as a reshuffling among the leading carriers.
The mergers involving Singlife and Income – if the latter bargain receives regulatory approval – involve changes in possession, and that can improve the branding, money and engineering, said Mr Tran.
Given that the bank already owned a significant play, the OCBC provide, on the other hand, is unlikely to significantly affect the business of Great Eastern.
Mr. Yuen claimed Income Insurance may use Allianz’s wealth to expand its line of products and increase its market share by tapping its asset management features.
Ultimately, however, the scenery is likely to be largely intact in the short-term.
According to Mr. Yuen,” the insurance industry is still very localized ( and ) depends on the trust you have maintained with your customers in the past,”
Even if you have the backing of more funds needles like Allianz,” These are the stuff that probably will be very difficult to change.”
But, Professor Lawrence Loh of the National University of Singapore’s Business School claimed that the Allianz-Income package in particular was “give the rest of the players a run for their money,” with money benefiting from size and range.
Because of the fact that money may rest on a global huge,” I believe there will be some reshuffle among the leaders.”