Investment-linked assurance products continue to have a strong place in the international market, growing at a penetration rate of nearly 19% worldwide, a piece of research from Cerulli Associates revealed.
However, it was the island of Taiwan that was cited by asset managers as the most attractive place for life insurance in Asia, and Cerulli predicted the jurisdiction was likely to offer the greatest opportunity to manage investment-linked assets over the next three years.
The report examined the life insurance markets of China, Taiwan, Hong Kong, Korea, Singapore, Thailand, and Indonesia.
The Boston-based research firm said the competitiveness of the investment-linked segment can make it “unfriendly to new managers and boutique players”.
Despite this, Cerulli argued there is “ample scope” for gathering assets if managers can offer “compelling investment strategies”.
“The retail market’s penchant for new and innovative funds, coupled with positive perceptions of the use of insurance products, helps ensure continued demand for investment-linked products,” said Manuelita Contreras, a senior analyst with Cerulli.
The Taiwan regulator, the Financial Supervisory Commission (FSC), recently relaxed restrictions on a number of investment activities for both retail and institutional investors.
This has led to Taiwanese insurers diversifying their investment portfolios, which is expected to achieve better investment efficiency and improve yield.
But with major players continuing to pour more resources into growing their investment capabilities and teams, Cerulli said outsourcing opportunities from the asset-rich players are becoming fewer.
The firm added, however, that there will be opportunities here as well.
Yoon Ng, Cerulli’s Singapore-based Asia research director, said: “The still-robust appetite for overseas investments continues to open some windows of opportunity for institutional asset managers.”
Cerulli cited opportunities for growing assets under management in both the retail and institutional insurance space, and suggested Taiwan is the most attractive jurisdiction for foreign asset managers across the seven countries covered in the report.