Edinburgh-based insurer Standard Life is launching a business in Singapore to manufacture and sell investment-linked products through local independent financial advisers and banks.
Neal Armstrong recently joined the firm to serve as Singapore CEO. Standard Life has been granted a licence by the Monetary Authority of Singapore to engage in ‘defined market segment’ business in insurance.
Such business is not allowed to handle money taken from Central Provident Fund accounts, and requires a high minimum premium, effectively limiting product sales to wealthier people.
Standard Life intends to begin business this month and has over 250 products in the pipeline.
In addition to having affiliate Standard Life Investments manage some of the underlying investments, the firm has a further 20 or so third-party managers also running portfolios. With business not yet officially commenced, however, Armstrong declined to name the third-party managers. The underlying funds are all Sicav structures.
This is the second market in Asia where the insurer is opening doors for selling investment-linked products after Hong Kong, although the nature of the licence and the product in Hong Kong is different.
In Singapore, Standard Life will be taking on a handful of incumbents, including Zurich International – Armstrong’s previous employer, which he left in March to join Standard Life – as well as Friends Provident, Generali, Royal Skandia and Transamerica.
This business accounts for only about 5% of weighted insurance premiums written in Singapore, with a notional amount of about S$102 million of new business written in the first nine months of 2012.
Armstrong says the business case is promising because it provides people with a long-term savings product, and there are relatively few such providers. Standard Life is the largest such provider in the UK, where most of its competitors are also based.
Moreover, such providers can also cater to offshore individuals who conduct financial business in Singapore. For example, a Singapore IFA with a branch in Malaysia could recommend their Malaysian clients could purchase investment-linked products the next time they visit Singapore.