Manulife’s Asia business is expected to make up half of the Canadian insurance giant’s core earnings by 2025, despite economic slowdowns and the impact of the COVID-19 pandemic, its regional CEO said.
“I think we're broadly on track, our strategy is broadly on track,” Manulife Asia CEO Damien Green (pictured above) told Reuters. “We've all been disrupted and distracted for the last two years ... but the secular trends in Asia are the same as it goes to life insurance, in particular, a rising middle class and a rising need for health and retirement protection, and China.”
Manulife set the Asia earnings target in September, which was then followed by mounting pressure on the insurance industry, with a slowing down of the Chinese economy and resurging COVID-19 cases in many regions. In 2021, Asia brought in 35% of Manulife’s global earnings. It currently operates in 13 markets in Asia, with around 13 million customers.
Asia is regarded as a crucial region by many global insurers, with a rapidly growing middle class, low insurance penetration, and increasing demand for life and healthcare insurance, as well as investment options.
Manulife underperformed in the first quarter, missing analysts' estimates due to weakened sales in its major market of Hong Kong. The city was hit by a surge of COVID cases in early 2022, with stringent restrictions damaging its economy.
Green said insurers are hoping that governments will ease up border control between Hong Kong and the mainland in the fourth quarter, allowing mainland visitors to buy insurance in Hong Kong – an important revenue stream for insurers.
Despite the economic downturn, Manulife managed to grow its agents headcount in Hong Kong by 10% in 2021. It added a further 7% in the first quarter of 2022, anticipating business to pick up later this year. Green said Manulife is also planning to grow its agency force by double-digit percentages in Vietnam and Indonesia.
