Manulife Says India and South Korea ‘Obvious Gaps’ in Asia

Manulife Financial Corp., Canada’s largest insurer, wants to expand into South Korea and may consider joint ventures in India to increase its Asian business, said Robert Cook, senior executive vice president and general manager of Asia.

“There are two obvious gaps in our portfolio, being India and Korea,” Cook said yesterday in a telephone interview from Hong Kong. “There are interesting prospects in both areas.”

Manulife, which has been in Asia for 115 years, has said profit from the region may climb to C$1.5 billion ($1.52 billion) a year by 2015, more than double the C$623 million it posted in 2010. The projection is part of Chief Executive Officer Donald Guloien’s plan to propel overall profit to C$4 billion by the end of that year.

“We’ve had a pretty good track record of growth in the past decade, and we certainly expect that to continue,” said Cook, who identified AIA Group Ltd. and Prudential Plc as Manulife’s main competitors in Asia.

Cook declined to predict when the Toronto-based insurer will enter South Korea or India because of the availability of opportunities and government restrictions.

In India, Manulife would consider a joint venture to expand into the world’s second-most populous nation, Cook said. Foreign companies are restricted to owning up to 26 percent of a venture there.

“In recent years, there’s been a lot of talk about the possibility of that ownership restriction being increased to 49 percent,” Cook said. “That’s something that we’re watching very carefully.”

Acquisitions

The only way to enter the South Korean market would be by making acquisitions, which leads to a “premium” valuation for potential targets, Cook said.

Manulife will expand in Asia through a combination of organic growth, acquisitions and finding new channels, said Cook, a 30-year veteran of the company who has been in Hong Kong since 2007.

The owner of Boston-based John Hancock Financial had made 15 mergers or acquisitions in Asia over the past decade, Cook said, including last year’s purchase of Fortis Bank SA/NV’s 49 percent stake in a Chinese wealth-management joint venture, now known as Manulife TEDA Fund Management Co. The insurer sells insurance and asset-management products such as mutual funds in countries including China, Hong Kong, Japan and Malaysia.

Manulife had 42,000 agents in Asia at the end of the fourth quarter, a 21 percent increase from the end of 2009. Cook wants to double the number of agents by 2015, although “it isn’t a primary measure I use” to gauge success.

Manulife climbed 35 cents, or 2 percent, to C$18.29 in 4 p.m. trading on the Toronto Stock Exchange. The shares have gained 6.7 percent this year.

To contact the reporter on this story: Sean B. Pasternak in Toronto at spasternak@bloomberg.net.

To contact the editors responsible for this story: David Scanlan at dscanlan@bloomberg.net; Dan Kraut at dkraut2@bloomberg.net.

• Facebook Share
• LinkedIn
• Google +1
• COMMENTS
• Print
• QUEUE