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June 08, 2005 at 08:00 PM
Companies with established Asian life operations already appear to be generating solid returns on capital.[@@]
Market conditions should continue to produce robust life sales growth in Asia over the next few years, according to Andrew Kligerman, a lead analyst at UBS Investment Research, New York.
Kligerman writes in a new research note that the operations of one major Western player in the Chinese life market, American International Group Inc., New York, remain strong as they continue to benefit from scale, efficiency, distribution reach and AIG’s well-known brand name.
“Although outweighed by positives, [AIG] faces challenges arising from unlicensed sales in mainland China and narrow profit margins in Taiwan,” Kligerman writes.
AIG did not give a specific figure, but Kligerman says the company did suggest that its Hong Kong return-on-equity ratios have been significantly higher than those achieved in the United States.
