Tag Archives: Charles Carneiro

Asian life insurance growth story continues boosting embedded value and new business values

Milliman has released its latest report, 2017 Mid-Year Embedded Value Results (excl. Japan), which summarises mid-year 2017 embedded value (EV) results disclosed by Asian insurers in eight key countries. The report examines the results at a company and country level and supplements the 2016 Embedded Value Results: Asia (excl. Japan) report released in August 2017. It also includes an update of the India 2016 full-year results, not available earlier due to the market’s March financial year-end. The findings highlight an overall increase in growth of EV, increase in value of new business (VNB) and improvement in new business margins.

‘As expected, positive performances by Asian equity markets and improving yields have led to an increase in the EV of life insurers within the region,’ said Milliman principal and consulting actuary Paul Sinnott. ‘These favourable economic conditions, combined with refined product strategies and improved distribution channel productivity, continue to drive growth in life insurance premiums, margins and the overall business in Asia.’

Key findings from the report include:

• Overall, insurers have reported positive gains in their 2017 mid-year embedded values over their 2016 mid-year values, with many companies showing single-digit EV growth but some posting larger gains in Hong Kong and mainland China.
• Hong Kong and mainland China insurers continued to report significant increases in VNB in the first half of 2017 compared to the first half of 2016, with over 50% increases in VNB for several companies, primarily driven by strong new business sales.
• Nearly all operating entities reported an increase in their new business margins between the first half of 2016 and the first half of 2017, with single- or double-digit increases in new business margins for many.
• As initial public offering (IPO) activity among insurers continues in India, companies are adopting the market-consistent Indian Embedded Value methodology (which is prescribed for IPO disclosures).

A copy of the report is available for download here.

Takaful offers significant opportunities for insurance industry growth

Milliman has released the findings of the first known study analysing the general and the family Takaful industries, separately, across all major markets. The full report will be released and discussed at the International Takaful Summit in London today.

‘While there have been a few reports analysing the US$14.9 billion Takaful market, they typically provide a combined analysis,’ said Farzana Ismail, head of Milliman’s Life Insurance and Family Takaful consulting practice in South East Asia. ‘Since drivers for general Takaful can be significantly different from family Takaful, there has been concern around the distortion caused by analysing them together and demand for a separate analysis. This report helps meet that demand.’

‘The GCC region dominates the global market penetration of Takaful, which grew 14% in 2015,’ said Safder Jaffer, Milliman’s managing director for the Middle East & Africa. ‘However, a closer look at the market reveals that there is virtually insignificant penetration of family Takaful, providing a huge opportunity for growth.’

Highlights from the Milliman Global Takaful Report 2017:

• Coverage of the major Takaful markets: South East Asia, Gulf Cooperative Council and Africa and the smaller markets, by country, analysing data from 2011 to 2015
• Market trends including changes in gross written contribution (GWC) and financial ratios
• The regulatory environment and changes in each market and their impact on the industry
• Opportunities for and challenges preventing the growth of Takaful

To download the report, click here.

Authors of this report can be reached on:

• Farzana Ismail in Kuala Lumpur at +603 2722 7181, farzana.ismail@milliman.com;
• Safder Jaffer in Dubai at +971 386 6990, safder.jaffer@milliman.com