Life insurance firms have been under intense pressure in recent years amid a growing squeeze on profits and the continued challenge of meeting liabilities in the prevailing low-interest-rate environment and tightening risk-based capital rules.
One upshot was that several insurers underwent big staff shake-ups in Asia last year, with a view to improving investment capabilities and cost efficiency. Among those making key changes to their investment setups were Hong Kong-based AIA, British group Prudential’s Asian unit and Singaporean firms Great Eastern and NTUC Income.
AIA in January 2017 launched a new regional investment hub in Singapore, called AIA Investment Management (AIA IM). It installed Cheong Poh Kin, former chief investment officer of AIA Singapore, as chief executive officer (CEO) of the unit and group CIO Mark Konyn as chairman, and has transferred and hired more staff since then.
The move to centralise investments has been seen as potentially beneficial for a pan-regional insurer from an efficiency and compliance cost perspective.
Prudential took a different approach to its own regional revamp, which saw it boost its local investment capabilities and came alongside changes at Eastspring, its Asian investment management arm.
The insurer brought in Stephan van Vliet as Asia-Pacific CIO as well as new CIOs in each of its main markets, including Hong Kong, Singapore, Malaysia and Indonesia. These individuals have more control over allocations and choice of external managers than the previous local investment heads, said multiple sources familiar with Prudential.
The group’s reshuffle also saw Eastspring hire 30-year industry veteran Virginie Maisonneuve as its first dedicated CIO, effective in January last year. Guy Strapp had previously served jointly as CEO and CIO and is now solely CEO.
Another insurer that has been looking to strengthen its investment capabilities is NTUC Income. Its official appointment of fellow Singaporean firm Fullerton Fund Management to take over the management of its public-asset portfolio was seen as a quick and smart way to meet this need. The move late last year also saw NTUC take a minority stake in the asset manager.
Meanwhile, Great Eastern, the biggest Singaporean life insurer by assets, hired multi-asset specialist Wee Ai Ning in September to replace Yoon Mun Thim as CIO. Wee had previously worked for hedge fund Tudor Capital and Singapore sovereign wealth fund GIC; one industry observer speculated that the firm was hoping she would “spice up performance”.
In addition, several firms rang changes at the very top. Prudential, French group Axa and Canada’s Manulife all installed new Asia CEOs; Axa and Manulife appointed new Singapore chiefs; and another Canadian firm, Sun Life, named a new Hong Kong CEO. Such moves suggest more house-cleaning could be on the way.
However, 2018 is unlikely to see the same level of recruitment activity among insurers, suggested Trevor Persaud, an independent consultant based in Singapore. “Insurance firms that made staff changes last year are likely to give their new people time to bed down and make improvements, which normally takes a year or two.”
That said, Persaud believes that insurers’ allocations to alternatives, particularly private markets, are likely to grow further, which could lead to hiring in that space. And insurance firms are not the only institutions seeking more alternatives expertise—they will have some competition.