Following the US$450 million sale of Aviva’s general insurance business in Asia to Mitsui Sumitomo Insurance three years ago, the integrated entity, MSIG is looking at leveraging on its size and extensive geographical network to grow local business.

“In recent years, with the acquisition of Mingtai in Taiwan and Aviva’s general insurance portfolio in Asia, the focus has been to broaden our business connections in the region, particularly local business,” said Mr Patrick Wale, CEO of MSIG Holdings (Asia) Pte Ltd, who spearheads local business.

Although Japanese companies in the region have been expanding in Asia to service Japanese clients, the MSI board has made a concerted decision to grow local markets.

Elaborating on Mr Wale’s sentiments is Mr Hideki Wake, CEO of MSIG Holdings (Asia) Pte Ltd, who oversees Japan Investments Abroad (JIA), “Overall, the Group is very optimistic about the many opportunities in core ASEAN countries. For our industry, Asia is an exciting place to be, unlike the U.S. which is tough to penetrate.” Before his joint regional role with Mr Wale, Mr Wake had worked in the United States, Japan and, most recently, Indonesia where he was managing MSI Indonesia.

“We will not move away from long-standing Japanese business, but merely balance our portfolio. We will also actively look out for worthy acquisitions and new market entries,” they shared on their strategy.

“The acquisition was not driven by the need for economies of scale, but totally driven by the need to grow local business. It’s a win-win for both the buyer and seller,” Mr Wale highlighted. He is a veteran when it comes to mergers and acquisitions, having completed seven throughout his career.

Both observed that there has been very little change except in Malaysia which underwent a true integration due to regulatory requirements. Some examples of minimum changes include having no staff redundancies, maintaining the same structure in their operations, and focusing on the same business segments.

In addition, Mr Wale expressed visible satisfaction at not having missed out on any opportunities in Malaysia throughout the process. They also noted that in most of their markets, the two operations will continue to function separately.

Capitalise on Synergies

“We are happy that the merger has opened up significant synergies. Our regional management is highly evolved with members bringing with them varied international exposure and depth of experience,” pointed out Mr Wake. 

Commenting further, Mr Wale said, “Indeed, we have much to leverage on. Our two companies have very complementary business streams with little overlap. Our key regional business partners are especially excited about our geographic strength and wider customer focus.”

In the increasingly competitive landscape in their markets, it is noteworthy that the Group has continued to maintain growth and expand key distribution channels.

Looking Forward

For 2007, the Group’s focus will be on further synergies and building on customer service. In the longer term, they plan to harness technology fully to streamline IT platforms and back office centres, for greater efficiencies. Another critical priority includes anchoring their branding in corporate social responsibility.

Within the Group, there is an internal project called Challenge 10 which spells out that by 2010, they want to a commanding position as the top player.

“As the number two player in Asia Pacific, we have our sights set on being number one. It’s a marathon race, but we have shareholders that are in for the long haul,” Mr Wale explained, adding that Vietnam and China offer abundant new opportunities.

Echoing his enthusiasm is Mr Wake who shared that Japan is viewing Asia’s growth with glowing anticipation. He is also rosy about growing the JIA especially since it will benefit from leveraging on the Group’s extensive distribution network and expertise.

Published in Asia Insurance Review

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