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."