TIDJANE Thiam’s disastrous attempt to acquire AIA hasn’t snuffed out his love affair with Asia. Already booking a third of sales in the region, Thiam wants to go much further by doubling Asian premiums over the next three years.
Having tested shareholders’ appetite for a transformational acquisition – and found it wanting – Prudential will likely have to grow organically, or by snapping up smaller bolt-ons.
Initially, Thiam’s target seems somewhat over-optimistic. But there is huge hope for expansion in Asian emerging markets. In the UK, the life insurance penetration rate is 13 per cent while Japan’s is 8.3 per cent. In India and China it is far lower, around four and two per cent respectively.
McKinsey estimates that 40 per cent of growth in the life assurance market will be generated by Asia, while the compound annual growth rate in China will exceed 15 per cent for the next five years. With markets at home maturing, Thiam’s decision to look east for inspiration could still pay off.