Tag Archives: Chihong An

New business surge leads to double-digit embedded value growth in Asia

Milliman has announced the findings of its study on reported year-end 2016 embedded value (EV) results for 34 major insurance companies operating in Asia, excluding Japan. The report highlights trends among companies reporting EVs and reveals a growth in reported 2016 EV of 15.3% by Asian insurance companies. This was primarily driven by a 40% growth over 2015 in Value of New Business (VNB) across the region in 2016.

The Milliman 2016 Embedded Value Results: Asia (excl. Japan) report analyses and discusses the EV methodologies and assumptions, the impact of regulations, as well as recent developments with the long-awaited IFRS 17 reporting regime.

“The China and Hong Kong markets were the main drivers of the VNB explosion in the region; both having mainland consumers to thank for these results” said Milliman principal and consulting actuary Paul Sinnott. “Although we have some longer term concerns about the sustainability of profit margins in the region, recent yield curve rises are relieving some margin pressure in the short term.”

A few key insights from the Asian report include:

• In 2016, total reported Asian EV grew by 15.3%, on a comparable basis, to USD 339 billion from USD 294 billion.
• While some European multinationals reduced their Asian EV reporting last year, there were three companies disclosing EV results for the first time in India, along with the first comprehensive IEV disclosure associated with ICICI Prudential’s IPO in September 2016.
• Life insurance sales continued to rise strongly in the region during 2016, with gross written premium (GWP) estimated to have increased by 28%, with China’s 43% growth being a major contributor.
• VIF increased for all markets. South Korea recorded the largest VIF growth of 31%, mainly from margin-driven growth in VNB across all companies; Hong Kong also posted strong VIF growth of 20%, driven by large volumes of business sold to mainland Chinese visitors.

To download the report, click here.

Mixed outlook for participating business across Asia

Milliman has released the findings of a study analysing and comparing participating (par) business across seven Asian insurance markets, notably Singapore, India, Malaysia, Hong Kong, China, Indonesia and Sri Lanka. The report collates in-depth information not otherwise available and provides insight from survey results about par business in Asia.

‘Par products have been a core insurance offering for many decades in many markets across Asia Pacific and in Singapore, Hong Kong and India they remain a cornerstone of the industry,’ said Richard Holloway, managing director for Milliman’s South East Asia and India life consulting practice. ‘However, increased regulatory scrutiny of par business in countries such as Malaysia and the onset of risk based capital solvency regimes in most markets may lead to a gradual decline in the popularity of such products. This report unlocks key considerations for companies offering par products across the region, highlighting differences in performance, investment approach, and governance of par across the seven markets.’

The ‘Milliman Participating Business in Asia’ report includes:

• A regional view of common themes and differences among the seven selected markets
• Detailed country commentary on par business performance, regulatory environments and key challenges
• Results of our survey providing qualitative insights into par business in these countries
• Analysis of the governance frameworks in place and roles of policyholder advocates

To download the report, click here.