Insurance giants
Berkshire Hathaway and Starr Cos. are slowly increasing their footprints in the growing Asian insurance market, with Starr’s takeover of Chinese state-owned insurer Dazhong and Berkshire’s continued efforts to shore up its new commercial insurance business.
According to a Wall Street Journal report, Asia is a vast and largely untapped resource in the insurance world with just a few foreign firms like
AXA,
Allianz and Prudential present.
AIG also remains a prominent market force, with property-casualty operations in countries like Japan, China and South Korea.
“The insurance market in Asia offers so much potential for growth,” Sally Yim, a senior credit officer with Moody’s told the WSJ. “That’s why these two tycoons are expanding here.”
Yim and other analysts note that outside of auto insurance, large holes in commercial coverage—paired with a growing middle class—means a recipe for economic opportunity for large US insurance groups.
Hence, the two companies’ interest in the region.
Berkshire Specialty is reportedly applying for licenses to regulators in Sydney, Hong Kong, Singapore and Europe and is believed to have taken on former AIG executives Marc Breuil and Marcus Portbury to head the emerging Asia-Pacific region.
Meanwhile, Starr’s acquisition of Dazhong stirred industry waters last year and has already spurred the planning of a wide variety commercial property/casualty products, including political risk and food safety.
Arjan van Veen, an analyst with Credit Suisse, is bullish about the efforts of both companies.
“They are good operators who have been in the industry for decades,” Veen told the WSJ. “There is a good chance that both of them will succed.”
