John Hancock maps Asian growth
John Hancock maps Asian growth
SINGAPORE (Reuter): U.S. insurance giant John Hancock Mutual Life Insurance Co has set aggressive Asian growth targets, including plans to enter the mutual funds and annuities markets.
"Asia is going to be the major focus of growth in our insurance businesses as well as in our investment management businesses," president and chief operations officer William Boyan told Reuters yesterday while on a swing of the company's Far East operations.
The Boston-based company thinks Asia will contribute 10 percent of total revenues by the year 2005, against one to two percent at present, Boyan said. John Hancock's worldwide net income after tax is now around $300 million.
The 133-year-old firm is the ninth-biggest life insurer in the United States, with some $95 billion in assets under management. In Asia, the company has $375 million in assets, with 250,000 policyholders.
Its Asian operations are growing by about 15-20 percent a year in annualized premium income, he said.
Despite John Hancock's high name-awareness in the United States, it is a relative newcomer to Asia. It opened an Indonesian operation in 1987, with Malaysia following two years later, and Singapore and Thailand in 1990.
The company is also eying opportunities in China, the Philippines and Vietnam. Boyan said it will decide in early 1996 whether to enter the Philippines.
It will apply to open a representative office in Vietnam early next year. Only three other life insurers now have representative offices in Vietnam.
In China, John Hancock has representative offices in Beijing and Shanghai, as well as approval to open a third in Tianjin.
Big apple
"The big apple for us is China. Everything else pales by comparison," said Boyan. The company views Hong Kong as hopelessly saturated, and instead focuses on Asia's less- developed markets which have a growing middle class.
"In Asia, we're focussing on the younger, family market with kids -- and on the business-insurance market," Boyan said.
"The big new area of interest for us is to become bigger in the individual asset-management business -- not only doing insurance, but also providing mutual funds and other investment opportunities for individual customers."
The company entered Asia's mutual-fund business in September, when 25-percent-owned Thai affiliate, Interlife Assurance, launched a joint venture with First Bangkok City Bank and Indosuez Asset Management Asia Ltd. John Hancock plans to start mutual fund companies in Singapore and elsewhere, he said.
For its Thai life insurance unit, Boyan projects a doubling of market share to 2.5 percent by 2000, and to five percent by 2005.
"Our goal in Malaysia is to increase our market share to six percent by the year 2000 and 10 percent by 2005, from the present three percent," said Boyan.
Its 32.5-percent-owned Malaysian affiliate, John Hancock Life Insurance (Malaysia) Bhd, is building a $32-million office tower to be completed in 1998.
The $208-million Malaysian life insurance operation should double its profits every five years, he said.
By the end of this year, the company hopes to introduce annuities -- or products providing regular income payments after retirement -- in Malaysia, pending approval by the central bank.
"There's a lot of interest in (Asian) markets in capital accumulation, building estates, and annuities is a great way to do that," said Boyan.
In Singapore and Indonesia, the company plans to double its market share by the end of the decade, to five and three percent, respectively.
"We think we're coming into the (Asian) market in the right way," said Boyan. "We have been very good about working on a joint-venture basis in many of these countries. That's allowed us to not only introduce our own management style and expertise, but also acquire local knowledge of the marketplace and understanding of the regulatory environment."