HSBC buys AXA Singapore, reflecting island-republic life insurance growth potential - AM Best

KUALA LUMPUR, Aug 26 -- The recent agreement to acquire AXA Insurance Pte Ltd (AXA Singapore) by HSBC Insurance (Asia-Pacific) Holdings Ltd (HSBC Insurance) demonstrates the continued growth potential of Singapore’s life insurance segment, according to a new AM Best commentary.

In its new Best’s Commentary, ‘HSBC’s Acquisition of AXA Singapore Highlights Singapore Life Insurance Growth Prospects’, AM Best states demand for long-term financial planning and health protection is continuing to support Singapore’s life insurance market prospects.

The HSBC Insurance-AXA Singapore deal takes place at a time when the Singapore life market has seen a strong rebound in weighted new business premiums recorded in the first half of 2021. In addition, recent and future life insurance growth is expected to be supported by the city-state’s attractiveness as a home for affluent and high net worth individuals.

Generally, AM Best is of the view that life insurance companies with international expertise in investment and wealth management have notable advantages in designing sophisticated products with more attractive investment terms and features — an important value proposition amid the current low-interest rate environment.

Nonetheless, life insurers with product offerings that include significant investment risks/guarantees have to balance the attractiveness of these products with the capital requirements that arise for the insurer.

According to a statement, the health and employee benefits lines of business also remain important growth drivers for life insurers in Singapore.

In Singapore, aside from group health business, which delivered adequate profitability last year, health insurance is viewed as a difficult line of business due to the weak results of long-term individual policies.

United States-headquartered AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry.

For more information, visit www.ambest.com.

-- BERNAMA