This will enable the company to reach the estimated 95% of the Singaporean population it does not currently have a licence to cater for with savings, investment and protection products, as well as the 5% it currently may access, the company said.
However, the company said it will be targeting an affluent clientele, rather than looking to compete at the mass market end with some of the existing insurers already well established in Singapore.
While the "defined market" space in which Zurich has operated until now is quite small and high-end, Singapore already has a large mass market insurance industry, with more than 12,000 tied agents vying for the business to be found in a population of around 5 million.
At least one other insurer, Swiss Life, has made the move to a general insurance licence from a defined market one in Singapore in recent years.
‘Wider range of product offerings’
For the first time, Zurich, through a newly-created Singapore subsidiary, Zurich Life Insurance (Singapore), will be able to “reach out to more consumers with a wider range of product offerings through a multi-channel distribution strategy that will include independent financial advisers, priority banks, agency, retail banks, private banks, insurance brokers and employee benefit consultants”, the company said.
The new entity’s newly-appointed chief executive, Graham Morrall, said the launch of the new subsidiary “reaffirms our commitment to the Singapore market and positions us for further profitable growth.”
Prior to taking the CEO post, Morrall had been Middle East director for Zurich International Life, based in Dubai, for the last four years.
During a presentation, Zurich executives cited statistics revealing the market’s current size and rate of projected growth. Among them was data from the Life Insurance Association of Singapore, reported here in February, which revealed that insurance sales grew by 22% last year in the city-state, as measured by weighted new business premiums.
A 2008 Barclays Wealth report, which found that Singapore will have the greatest concentration of wealthy individuals in Asia by 2017, was also cited. According to this report, in 2007 Singapore was in second-place behind Hong Kong in the ranking of wealth concentration, with 23.3% of its population having a net worth in excess of $1m.
Building agency force
Zurich said that as part of the launch of the new operation, it was “actively working on new distribution partnerships” as well as building an agency sales force. This would involve a starting team of around 50, which was expected to rise to 100 sales agents by year end, according to Morrall.
In a statement Morrall noted that the Singaporean market is characterised by having a “relatively high concentration of wealthy and high net worth individuals, where we see considerable growth potential in our target segments”, and said Zurich aspired to be the "best insurer" for the "affluent and emerging affluent customer segments" in particular.
With its registration as a direct insurer in Singapore, Zurich posesses and operates under two licences — its existing branch office business as Zurich International Life Ltd (Singapore) and the new subsidiary.
Fund element
Access to investment funds is a key feature of Zurich’s investment products range, and company sources said that the company’s Dublin-based capability for fund selection will remain an integral part of their business. The domestic insurance offering will be launched with 20 different funds, which compares with 160 in the current ZIL offering.
