Advertorial feature
“Is the current growth of life
insurance sustainable? Undoubtedly
so. Asia encompasses markets with
a population nine times the size
of the US, though life insurance
penetration in Asia is only one-
ninth of what it is in America. Over
time, there is scope for significant
catch-up. To avoid taking on such
liabilities, governments are generally
very supportive of private savings –
and of suppliers.”
Plowden highlights the importance
of the distribution and sales force:
legions of agents, thoroughly-
trained and equipped with tablets
and laptops, fanning out across the
cities, towns, farmsteads and islands
of Asia. “The whole thing about life
insurance is that it is never bought,
it is always sold. The customer has
to be persuaded that they need it,
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16 / 17
“It is very unusual to have
this level of predictability
and forward visibility. If you
believe the big statistics, that
Asians are going to carry on
getting richer, the need is
going to keep going up”
then they must have all the features
explained to them. You can’t do that
in 20 minutes looking at a website.”
His emphasis on the quality of the
leading companies, plus the size of
the growth opportunity they can
address, invites the question of where
Asian life insurance companies stand
in the spectrum of ‘best ideas’ in his
career as an investor.
“It is very unusual to have this
level of predictability and forward
visibility. If you believe the big
statistics, that Asians are going to
carry on getting richer, the need is
going to keep going up,” he says.
“But what is really unusual is how
few competitors there are in these
markets. The barriers to entry, and the
element of consumer and regulatory
trust required are high. It’s very
difficult to get a new licence as a start-
up and you won’t have the brand.”
While tech-led innovation or
industry consolidation could
disrupt the landscape, the chances
of the established companies
extending their leading position are
boosted by life insurance’s need for
massive marketing and sales force
development costs.
The dominant players, Plowden
says, “will I hope feature in the
portfolio for a long, long time. We
just don’t see why the opportunity
should get any less appealing.”
Granted it’s a different kind of
comfort, but Asia’s new life insurance
consumers and Monks’ investment
managers share a common belief:
that a long-term investment in
Asian life insurance is good for their
financial health.
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Investment markets and conditions can change rapidly. The views expressed
are those of the speaker, are not statements of fact, and should not be
considered as advice or a recommendation to buy, sell or hold a particular
investment. No reliance should be placed on these views when making
investment decisions. Portfolio data to 31 August 2019.
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stock market conditions and currency exchange rates. Investing in emerging
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arise, resulting in a negative impact on the value of your investment.
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