Singapore has been aggressively pursuing a vision to grow into a global insurance marketplace by 2020, when Asia is expected to account for almost 40% of the global insurance market.
Singapore is already recognised as Asia’s leading reinsurance hub, with 16 of 25 of the world’s reinsurers having regional hubs here. The Monetary Authority of Singapore continues to drive initiatives to grow the alternative risk transfer mechanisms like insurance-linked securities (ILS) and help build up expertise in specialty insurance, such as for marine, energy, credit and political risks.
On the consumer side, the Life Insurance Association reported that the life insurance industry in Singapore achieved a record $4.088 billion in total weighted new business premiums for 2017. Private insurance bought by individuals continues to be a key pillar in the overall government approach in managing healthcare costs.
This week, we will look at four listed companies that can provide investors with exposure to growth and opportunities in the insurance sector.
Great Eastern Holdings Limited (SGX: G07)
Great Eastern is the insurance arm of Oversea-Chinese Banking Corporation (SGX: O39), which owns 87.89% of the company.
On 27 March 2018, company directors recommended the payment of a final one-tier tax exempt dividend of $0.50 per ordinary share and a special one-tier tax exempt dividend of $0.10 per ordinary share, subject to shareholders’ approval, payable on 8 May 2018. Including the interim one-tier tax exempt dividend of $0.10 per ordinary share paid in August 2017, total dividends for the financial year 2017 would amount to $0.70 cents per ordinary share.
In February, it was reported that Malaysia’s Employees Provident Fund (EPF) were in talks to buy a 30% stake in Great Eastern Life Assurance (Malaysia) Berhad from Great Eastern Holdings Limited. Any deal is still in the early stages but is expected to be worth $1 billion.
Great Eastern also announced its plans to expand its footprint in Indonesia, and aims to be among the top 10 insurance companies there in the next five years. The expansion will come by leveraging on bancassurance channels through OCBC’s existing distribution network, as well as forging partnerships with other banks.
Great Eastern closed on 13 April 2018 at $30.50, which represents a 9.63% YTD gain.
Prudential plc (SGX: K6S)
Prudential plc and its subsidiaries provide a range of financial products and services, as well as asset management services to individuals and businesses primarily in Asia, the United States, and the United Kingdom.
At a market cap of $87 billion, Prudential is the largest capitalised company on the Singapore exchange. Listed on SGX on 25 May 2010, the company has other secondary listings in London and New York, in addition to its primary listing in Hong Kong.
Prudential plc wholly owns Prudential Singapore, which is one of the top life insurance companies in Singapore. As at 31 December 2016, Prudential Singapore has $31.5 billion funds under management.
Prudential plc’s last done price was $32.858.
Singapore Reinsurance Corporation Limited (SGX: S49)
Singapore Reinsurance Corporation Limited, or Sing Re, as they are more widely known as, operates as a general reinsurance company in Singapore, Malaysia, Greater China, the Middle East, and the Indian Sub-continent. The company’s total assets currently stand in excess of $700 million.
Sing Re primarily provides risk management solutions in property, liability, accident, and marine classes. Sing Re also offers management and insurance consultancy services, including training for the shipping and insurance industry.
The company also publishes insurance reviews, directories, and magazines, such as the Asia Insurance Review and Middle East Insurance Review.
Its stock price closed this week at $0.32.
United Overseas Insurance Limited (SGX: U13)
United Overseas Insurance (UOI) is a subsidiary of United Overseas Bank (SGX: U11), which owns 58.39% of the company. It engages in underwriting general insurance and reinsurance in Singapore, the ASEAN region, and around the world.
The company also offers personal insurance and commercial general insurance products. On the personal segment, their offerings include travel, personal accident, home protection, foreign domestic worker, and motor insurance products.
For commercial general insurance, UOI provides fire, business interruption, machinery risks, burglary and theft, marine cargo, fidelity guarantee, public liability, work injury compensation, and group personal accident insurance products.
In addition, through an acquisition, UOI has a Takaful arm, allowing them to provide Islamic financial assurance to address misfortunes, accidents, or disasters.
UOI’s stock closed on 13 April 2018 at $7.68.
If you are interested to read more about Singapore stocks, you can check out our extensive archive of articles of 4 Stocks This Week. To stay up to date with the latest news on the Singapore Exchange, you also can check out the SGX My Gateway Market Updates to get more insights.
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