Milliman: Asian Insurance Market Sees Positive Embedded Value Results in First Half of 2016, Despite Headwinds

PR66966

HONG KONG, Dec. 22, 2016 /PRNewswire=KYODO JBN/ --

Milliman, Inc., a premier global consulting and actuarial firm, today released

an updated report examining trends in the embedded value (EV) results for the

17 major insurance companies in Asia that published EVs as of mid-year 2016.

For the first half of 2016, disclosed EV results have continued to be positive

overall, with several emerging markets reporting double-digit growth as high as

20%; however, low interest rates and equity market volatility have continued to

constrain growth in many countries in the region.

"The headwinds observed in the 2015 results have continued into 2016 as

evidenced by the lower embedded value growth as compared to the same period a

year ago," said Milliman principal and consulting actuary Paul Sinnott.

"Despite this, the value of new business (VNB) in the first half of 2016

continued to grow strongly in many countries, in particular China and Hong

Kong. Going forward, we expect rising interest rates to improve embedded value

results for the 2016 year-end, although in many cases recent rises have already

been incorporated in economic assumptions to some extent."

Key details from the Asia report include:

    - Chinese companies experienced major growth in VNB compared to the same

      period in 2015, reflecting increased volumes of agency business,

      typically supported by optimistic investment return assumptions. There

      are also some questions around the VNB reporting of the high-return

      short-term products which have dominated new business sales.

    - Hong Kong companies also saw strong growth in VNB, mainly driven by

      sales to mainland Chinese visitors. Among multinational corporations

      (MNCs) the largest reported increase in VNB was 59%.

    - The Initial Public Offering (IPO) of ICICI Prudential in September 2016,

      the first life insurance company flotation in India, was oversubscribed

      by 10 times, with the price equivalent to a multiple of around 3 times

      embedded value and an implied new business multiplier of around 75.

    - Declining or stagnant Asian equity markets have had adverse effects on

      the life insurance industry, particularly on insurers' investment

      results and the performance of unit-linked and participating business

      lines. Low interest rates also continue to provide a major challenge to

      the industry in most Asian countries.

Interested parties may obtain a copy of the Milliman studies at

http://www.milliman.com/ev-research/ or receive further information by

telephoning or emailing:

    - Paul Sinnott in Hong Kong at +852 2152 3838, Paul.Sinnott@milliman.com

    - Richard Holloway in Singapore at +65 6327 2301,

      Richard.Holloway@milliman.com

About Milliman

Milliman is among the world's largest providers of actuarial and related

products and services. The firm has consulting practices in healthcare,

property & casualty insurance, life insurance and financial services, and

employee benefits. Founded in 1947, Milliman is an independent firm with

offices in major cities around the globe. For further information, visit

milliman.com

SOURCE:  Milliman, Inc.