Singapore Life, the city-state’s newest life insurer, has plans this year to appoint more external managers and is poised to expand into at least two neighbouring countries, its boss has told AsianInvestor

By email on Tuesday, Singapore Life's chief executive Walter de Oude confirmed that the young insurer aims to build more client assets through more products and services – which, in turn, will require more investment expertise.

"As we build our wealth ecosystem over the course of this year, we will be looking to add multiple third-party managers for investing our wealth portfolios, which will be flexible and bespoke customer solutions,” he said.

The start-up insurer, which received its licence from the Monetary Authority of Singapore (MAS) in June 2017 – the first granted by the central bank in 47 years – currently has close to $200 million  on its balance sheet and uses third-party asset managers to manage its own as well as client investment assets.

De Oude, formerly the CEO of HSBC Insurance's Singapore unit, said most of Singapore Life’s own funds are invested in pure fixed-income instruments with the help of third-party managers – in particular, Aberdeen Standard and UBS, who act as core asset managers for the entire business.
 
“For investment-linked plans [of customer assets], we [also] would use third-party managers who have demonstrated a track record as we aim to take the best-in-class investments and add to our ecosystem," he said.
Walter de Oude

NEW PRODUCTS, NEW INVESTORS

For the most part, Singapore Life has been focused on protection and savings products but it now plans to roll out wealth accumulation solutions over the course of 2019, de Ouede said.

He said the number of asset managers added would depend on the lifer’s asset growth. “For our internal use and for direct-to-customer propositions, we would keep this quite tight at around 20 funds, but for our third-party advisers, the potential fund universe that we could access is infinite,” he said.

“We would start in Singapore, with the starting point being having [MAS-] recognised funds, but as we grow, our technology should help up in adding relevant third-party managers in each market that we enter,” De Oude said.

In 2018, Singapore Life increased its balance sheet by almost $100 million through new business premiums, de Oude said. It also wrapped up its acquisition of Zurich Life Insurance Singapore's business portfolio, raising its life insurance coverage to S$6.6 billion to date. 

The insurer has also been busy with fund-raising, attracting big names to its roster of investors.

Singapore Life, which bills itself as a digital insurer, has raised about $97 million from investors so far in its short life. In December, London billionaire Michael Spencer lifted his stake in the Singapore start-up insurer to 63% from 29%, while in January, Aberdeen Standard Investments injected $13 million to acquire a minority stake.

As a new-age insurer, Singapore Life uses technology platforms to streamline applications and claims and lower premiums. It's a trend that seems to be catching on: in September, Hong Kong saw the debut of Blue, a digital insurer owned by the UK's Aviva Investors and China's Tencent Holdings and Hillhouse Capital.

However, it doesn't a chief investment officer among its 50 or so staffers and that is unlikely to change in the foreseeable future, de Oude said.

Currently, Singapore Life's chief financial officer acts as coordinator for its external managers.

“If we decide we want to be doing more of the asset management ourselves, we might consider having an internal CIO. But given our operating model, we don’t see that happening for a number of years,” he said.

M&A PROWL

Apart from expanding its product and service offerings, the digital life insurer is also keen to expand via mergers and acquisitions.

“We are actively looking to expand both organically and through acquisitions,” de Oude said, adding that its technology platform will enable the life insurer to scale up across the region relatively quickly.

De Oude said the markets the firm is most interested in Southeast Asia are the Philippines, Thailand, Indonesia and Malaysia.

“We already have initiatives underway in all of these markets at various stages of development and in 2019 we hope to execute (complete) at least two of them,” he said.

De Oude believes that in general, insurance firms will continue to spark interest among investors eyeing M&A opportunities in the region.

"My view is that there is a lot of surplus capital available with the investor community,” he noted. “Large life insurance companies have amassed substantial reserves and a lot of the larger companies are struggling to find areas of growth. And when that happens, the M&A market picks up. There will be a continuation of bigger companies eating smaller companies."

By number of deals, the insurance sector in the Asia-Pacific region posted the highest growth globally in 2018, up 40% from the previous year to 59 – a report on the outlook for insurance by law firm Clyde and Co released on Monday showed.

For further insight and analysis into how insurers are seeking to invest and navigate regulatory changes, look out for AsianInvestor's 6th Insurance Investment Forum in Hong Kong on March 12 and its inaugural sister event in Singapore on March 14. For more information, please click here.