Founder Walter de Oude told the Post that over the past three months he has seen some “20 to 30 per cent” growth in applications for its universal life insurance products from Hong Kong residents. The insurance products are denominated in US dollars and distributed through private bankers and insurance brokers in Hong Kong.
“Due to the protests, we are seeing strong interests from high net worth individuals who would ordinarily invest into a Hong Kong insurer’s product, but are now considering Singapore as an alternative country to invest their wealth,” said de Oude.
Hongkongers are also piling into portfolio bonds, which are tailored insurance contracts also popular among high net worth individuals. These contracts often include a death benefit and are used by clients as part of their legacy planning to enable their beneficiaries to receive predefined payments.
On Monday, an estimated 550,000 Hong Kong residents took to the streets in what has become an annual pro-democracy march on July 1. But this year’s event follows several other large scale protests in recent weeks, as protesters marched to express their displeasure at the government’s proposed extradition law with China, which has since been removed from the current legislative term which ends in July next year.
De Oude said life insurance continued to be its biggest business segment. The insurer now has life insurance policies totalling S$7.3 billion (US$5.38 billion) worth of coverage. In January last year the company acquired S$6 billion in life coverage when it bought the Singapore life insurance portfolio from the local unit of Zurich Life. The insurance technology firm was licensed as a direct life insurer by the Monetary Authority of Singapore 2017.
On Monday, Singapore Life announced it had secured a US$90 million investment from Sumitomo Life Insurance in exchange for a 25.1 per cent stake, valuing the company at US$360 million.
Among investors in the company, Sumitomo Life ranks No 2, trailing IPGL, a private company controlled by British billionaire Michael Spencer which owns a 38.7 per cent stake. IPGL’s stake has been reduced from 63 per cent in December.
“What we value most in Sumitomo Life Insurance is the strong capital base that it has now provided us. It is important to have a diversity of multiple strategic investors so that Singapore Life could remain independent of our shareholders in our management of the business,” said de Oude.
In December, US insurer Aflac invested US$20 million for a minority stake in Singapore Life.
Singapore Life, which also counts Aberdeen Standard Investments among its core investors, has raised a total of US$153 million from shareholders.
Sumitomo Life president and chief executive Masahiro Hashimoto told the Post that the Japanese insurer sees growth opportunities in the emerging markets of Southeast Asia, where it already has a presence in Vietnam and Indonesia.
“We believe Singapore Life’s business model would be effective in the Southeast Asia market where the insurance penetration rate is still low and digitalisation is developing rapidly,” Hashimoto said in an email.
According to consultancy Bain & Co, penetration as measured by gross written premiums as a percentage of per capita GDP is less than 5 per cent in Indonesia, Malaysia, and India.
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