Insto roundup: Taiwan updates insurer rules; EPF’s Latif term extended

Ping An Insurance is HSBC's top shareholder; HKMA's Exchange Fund's third-quarter earnings drop 97%; EPF's deputy chief executive for investments' term extended, and more.
Insto roundup: Taiwan updates insurer rules; EPF’s Latif term extended


Asian institutions (excluding those in Australia and the Middle East) dominate Willis Towers Watson’s first list of the 100 biggest asset owners, accounting for $6.7 trillion (36%) of the total $19 trillion under management, the largest regional share.

Asian asset owners’ dominance is particularly notable among the largest organisations – especially when the Middle East is included within Asia – taking seven of the top 10 spots and 14 of the top 20. Those numbers drop to four of the top 10 and nine of the top 20, when Middle Eastern institutions are not included.

AsianInvestor has been compiling its own list – currently known as the AI300 – of the biggest asset owners in Asia Pacific for some years.

Source: Willis Towers Watson


Australia's Freedom Insurance announced the appointment of Sean Williamson as chief executive on November 12. Williamson will take on the role once the incumbent, Craig Orton, formally resigns later this year.

Orton’s resignation and Williamson’s appointment mark a tumultuous few months for Freedom Insurance, with Orton himself recently named to the role after his predecessor, Keith Cohen, resigned on October 2.

The insurer is also considering the sale of its Spectrum Wealth Advisers business.

Pauline Vamos was also appointed as a non-executive director and chairman of the Freedom's board, subject to shareholder confirmation at the annual general meeting (AGM) on November 15. Current chairman David Hancock will resign at the conclusion of the AGM, while fellow non-executive director Katrina Glendinning resigned on November 12.

Source: Freedom Insurance

Melbourne-based superannuation fund UniSuper will start a $579 million development project of a shopping mall through investment manager AMP Capital in mid-November, AMP announced on November 12.

UniSuper has been invested in the Karrinyup Shopping Centre in Perth for over 20 years, and the three-year project will see the complex almost double in size, with additional supermarkets, restaurants, and a cinema, as well as 134 high-end residential apartments.

Source: AMP Capital

AustralianSuper announced its support for lifting the employer contribution to superannuation accounts from the current level of 9.5% to 12% as soon as possible to ensure retirees have enough for retirement. Under the current federal budget, the superannuation guarantee will increase by 0.5% each year until it hits 12% in 2022.

The superannuation fund’s announcement on November 8 is in response to a Grattan Institute report released on November 6 that argued that the vast majority of Australian retirees will be financially comfortable in retirement, and that the government could see savings of about $1.5 billion a year if it scrapped the planned superannuation guarantee increases.

Source: AustralianSuper, Grattan Institute

The Australian parliament will consider up to four superannuation bills this week that will provide greater protection for superannuation accounts, particularly those with low balances.

The bills will cover a range of proposals, including how to implement opt-in and opt-out insurance payments through superannuation accounts, giving greater powers to the Australian Prudential Regulation Authority to impose jail terms on both trustees and employers that do not pay superannuation contributions, and an amnesty package that would see workers receive up to $109 million in owed contributions.

Source: The Australian Financial Review


China’s Ping An Insurance has overtaken BlackRock to become the largest shareholder of HSBC Holdings as it eyes high-dividend stocks. The Chinese insurer’s stake in the bank has grown to just over 7%, according to a filing to the Hong Kong stock exchange on November 6. Ping An Insurance held just over 5% in HSBC in December last year.

“This type of investment is purely a financial investment of insurance funds. Ping An sees good prospects in HSBC’s development and HSBC has a relatively high dividend payout ratio, which [are] in line with the risk preference and return objective of insurance,” a Ping An spokesperson said.

Separately, Peter Ma, chief executive of Ping An, has ruled out an immediate big overseas acquisition, emphasising that the domestic market is a priority for China’s largest insurance group.

Source: SCMP, Financial Times


The Hong Kong Monetary Authority's Exchange Fund reported a 97.4% year-on-year decline in its investment return in the third quarter, as a result of its heavy loss in Hong Kong stocks and foreign currency-related holdings. The fund returned HK$1.6 billion ($204.3 million) during the quarter, substantially lower than HK$61.8 billion a year earlier.

The major drag on returns during the quarter was a foreign currency valuation loss of HK$16.2 billion. The Exchange Fund does not invest in foreign currencies but its overseas assets suffered a valuation loss when converted into Hong Kong dollars.

Another major factor in the third quarter is the fund’s Hong Kong equity holdings, which suffered a loss of HK$4.7 billion as the benchmark Hang Seng Index tumbled 4% during the quarter. For the first nine months, the Exchange Fund reported a gain at HK$36.7 billion, down 81% from HK$198 billion a year earlier.

Source: SCMP


Dai-Ichi Life teamed up with Asset Management One to launch its second infrastructure debt fund, with initial funding of ¥20 billion ($176 million). The insurer said the fund, which launched on October 26, “aims to provide long-term stable income” to institutional investors by “offering a global diversified portfolio in project finance debt”. The fund is being targeted at other asset owners, both in Japan and other countries, and is looking for deals in both the primary and secondary markets.

Mitsui Life Insurance could be set to change its name, dropping the ‘Mitsui’ from its corporate name in April 2019. A new corporate identity is being planned, but no further details were provided. The life insurer is 82.6% owned by Nippon Life, which took a majority stake in the then-struggling Mitsui Life in late 2015.

Source: The Japan News


National Pension Service (NPS) reduced its exposure to local equities this year amid mediocre conditions, with its stakes in 30 stock destinations being estimated at W70.11 trillion ($62 billion) as of November 8, falling 16.2% from the end of 2017, according to corporate tracker

As part of this NPS cut its equity stakes in 13 companies, including Samsung Electronics, SK Hynix and Hyundai Mobis. It raised its holdings in eight others, including LG Household & Healthcare, AmorePacific and KT Corp. The cutbacks come at a time when NPS has been losing money from its local stock holdings; it saw a 5% loss of value on these investments between January and August. The pension fund had W650.9 trillion ($571.8 billion) at the end of August.

Source: Yonhap News Agency, Korea Herald


Employees Provident Fund (EPF) said the Ministry of Finance has agreed to extend Mohamad Nasir Ab Latif’s term as EPF’s deputy chief executive for investment until December 31, 2019, according to a media statement on November 12.

Mohamad Nasir has served as the $198 billion pension fund's investment head since 15 April 2013, and was due to retire on November 14 this year. The decision to extend his tenure is to ensure continuity in the EPF’s investment division and enable a smooth succession plan, the statement said.

Source: EPF 

Plans by overseas insurers to list their Malaysian units in order to comply with foreign ownership rules in Malaysia, appear to be heading for a quiet burial, according to a media report.

This development comes on the back of Singaporean insurer Great Eastern Holdings’ decision to opt for making a contribution to the special health insurance fund announced in the recent Malaysian budget.

Great Eastern’s move is being widely seen as a precedent for other foreign players to embrace an alternative plan to comply with the central bank's ruling of limiting foreign ownership of local insurers to 70%, the report noted.

On November 9, Great Eastern issued a statement to the Singapore Stock Exchange saying “as part of its corporate social responsibility efforts and in line with the objectives of the Malaysian authorities, it has decided on the option to make a contribution to the B40 Health Protection Fund, as announced by the Minister of Finance of Malaysia in his Budget Speech on Nov 2.”

Source: The Star, SGX


Egypt’s president issued an order on November 10 to finalise the remaining measures needed to create the country’s sovereign wealth fund and have it comply with globally recognised standards, reports the Sovereign Wealth Fund Institute.

Egypt’s state news agency said in June that the SWF, the Misr Fund, was being set up with capital of 200 billion Egyptian pounds ($11 billion), reported Reuters in that month.

Sources: Sovereign Wealth Fund Institute; Reuters


Temasek is investing in Brazil-based venture capital manager monashees Capital’s eighth fund, which raised $150 million to invest in technology firms looking to tap opportunities in key sectors in Latin America.

Other investors in the fund include US asset manager Brandywine Trust Group, San Francisco-based hedge fund Horsley Bridge Partners, US family office S-Cubed Capital, the University of Minnesota, and several Brazilian high-net-worth families and groups, monashees Capital, the largest venture capital company in Latin America, said in a statement on November 7.

The statement did not say break down the investments of the various investors.

Source: Dealstreetasia, Asia Asset Management

The Singapore Exchange (SGX) and Heliconia Capital Management, a wholly owned subsidiary of Temasek, have invested in iStox, a platform for issuing and trading blockchain security tokens.

While the sum of the seed round was not disclosed in the announcement, public filings show that the two investors contributed about $730,000 each for a total of $1.43 million.

IStox will launch once the company behind it, ICHX Tech, obtains a license from the Monetary Authority of Singapore as a “recognised market operator.”

Source: Tech in Asia


The Financial Supervisory Commission in Taiwan has released updated rules for domestic insurance firms’ overseas investments. The country's insurers are allowed to invest in bonds issued by not just local governments in overseas countries but also their (local governments’) affiliates. One example is revenue bonds issued by entities owned by municipal governments in the US.

When an insurer’s approved quota for overseas investment hits more than 40% of their capital, their investment cap in overseas private equity funds and hedge funds can be relaxed from 2% to 3% of its capital. In addition, Taiwanese insurers’ allocations in Formosa bonds will be included in the calculation of overseas investments, which cannot exceed 145% of an insurer’s approved overseas investment quota.

Taiwanese insurers have also been permitted to sell more foreign-currency insurance policies. When insurers park the money received from such policies into offshore assets, such assets will not be considered as overseas exposure in insurers’ portfolios. 

Source: Financial Supervisory Commission


Thailand Insurance Institute (TII) plans to help insurance businesses in neighbouring countries expand future business opportunities for local insurance companies.

Thailand is Asean's second largest market for non-life insurance business after Singapore, but Thailand's role in regional insurance is quite minimal, said Tadthep Sujitjorn, director of TII, which is a non-profit organisation operating under the Thai Life Assurance Association and Thailand General Insurance Association. 

The organisation plans to start its development programme in neighbouring countries – namely Cambodia, Laos, Myanmar and Vietnam – initially by signing a memorandum of understanding with Cambodia and Laos to co-operate with insurance associations in these countries.

Source: Bangkok Post



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