Speaking in Sydney yesterday, Zurich regional chief executive Jack Howell said Asia-Pacific has been identified as a “major engine of growth” for insurance by the company’s Swiss head office.
Zurich will acquire ANZ's life insurance business, OnePath, for $2.85 billion.
“As expressed to investors earlier this year, it is our intention to deepen our presence in mature Asia-Pacific, specifically in Australia,” Mr Howell said.
“From a strategic approach, [that is,] maximising the value from banks and distribution partnerships, this agreement also helps us do that, it deepens our bank relationships in Australia and gives us a long-term partner with ANZ.”
He added that “much of the growth” in insurance was emerging from the Asia-Pacific region.
“Historically or even in the present, Zurich is under-penetrated in this market, so we're under-represented compared to our global size and scope,” Mr Howell continued.
He pointed to Zurich’s greater presence in regions such as Europe, North America and even Latin America, whereby Zurich was “over-represented compared to our peers”.
“In Asia-Pacific, we have an opportunity not only to participate in what is a growing market, one of the fastest growing markets in the world, but also to increase our share in this market,” Mr Howell said.
“So, in a way there's a lot of room for us to grow.”
He also noted that Australia was “interesting” because it was not considered “in the same category as some of the other growth countries in Asia”.
“But we do see, as I mentioned, a tremendous opportunity in Australia – not only based on the structure of the market, the step premiums, and the fact that inforce premiums grow on a regular basis, but also because of its close tied nature to the rest of Asia and the fact that the market is relatively under penetrated,” Mr Howell said.
The acquisition of the OnePath business will see Zurich service 1.5 million Australians, making it the largest retail life insurer as measured by inforce premiums.