The following report is a shocker to the Malaysian insurance industry…. you mean Munich Re, KL branch is closing down? Can’t see the rationale behind!
In order to keep pace with the dynamic expansion in Asia-Pacific (APAC) markets, Munich Re is making changes to its strategic set-up in the region. The objective is to focus more closely on local markets while creating a more flexible structure. Munich Re’s offices in Tokyo, Singapore and Beijing will be expanded, while certain other locations will reduce in size or close altogether.
Munich. Ludger Arnoldussen, member of the Munich Re Board of Management with responsibility for APAC, said: “By pooling competencies in the region, we can align our property-casuality operations more closely to the needs of our clients. That is why we are strengthening our business locations in Tokyo, Beijing and Singapore. At the same time, we are streamlining our structures to be better placed to respond quickly and effectively to the challenges of these highly competitive markets.”
The regional centre in Singapore will in future serve clients from Southeast Asia and support Munich Re’s reinsurance activities in India, Japan and Korea. The Tokyo office will be expanded in order to play a greater role in property-casualty business in Japan. The process of streamlining Munich Re’s operations in Southeast Asia will involve the closure of the property-casualty branch in Kuala Lumpur. Roland Eckl, who is currently responsible for property-casualty business in Australia, Japan and India, will move from Munich to Singapore, where he will assume responsibility for the regional centre and the markets it serves. Singapore in particular will see an increase in the number of staff employed in order to cover the regional centre’s new roles (over 200 employees currently work in the Singapore office). Some of the tasks – in particular those that are client-facing – previously undertaken in Munich will in future be carried out in Tokyo and Singapore. This will affect a number of employees in Munich, for whom new functions will be sought.
In future, Chinese clients will primarily be managed out of Beijing, while the Hong Kong presence will be greatly reduced and the Shanghai property-casualty office closed altogether. The Taipei Liaison Office will remain. Clients in Australia and New Zealand will be managed from Sydney and Auckland, and the Melbourne office will close. China, Hong Kong, Taiwan and Australasia will continue to report directly to Munich, specifically to Tobias Farny, who is currently responsible for China, Southeast Asia and Korea.
Subject to approval of the co-determination bodies and supervisory authorities, the new structure will be in place by the end of 2017.
Munich Re believes that the emerging markets of Asia in particular will continue to be the key drivers of insurance-sector growth in the medium term. This year and next, premium volume in life primary insurance in this region is likely to see double-digit growth, with that in property-casualty insurance only slightly behind. According to the latest figures, in 2015 China pushed the United Kingdom from third place (behind the USA and Japan) in the ranking of the largest primary insurance markets. China is expected to become the world’s second-largest insurance market behind the USA by 2017.