Manulife sees Asian units hiking profit share by 2016

MANILA, Philippines - By 2016, Manulife Financial Corp. wants its 11 Asian units to account for 40 percent of its global profits, with Indonesia leading the way.

Manulife Indonesia chief executive officer Chris Bendl said that Indonesia should account for at least 10 percent of profits coming from Asia, with the help of its partner PT Bank Danamon Indonesia (BDMN).

“There will be a time when Indonesia will surpass Canada in terms of importance to Manulife Financial – and that could happen in my lifetime,” Bendl was quoted by Bloomberg.

Indonesia has almost half of Southeast Asia’s population, or 250 million people, and its unemployment rate will be 5.9 percent for 2013, according to the median forecast of three analysts surveyed by Bloomberg. That’s lower than the forecasts for Canada and the US.

The insurer in 2011 formed a partnership with Danamon, now the takeover target of DBS Group Holdings Ltd. (DBS), Southeast Asia’s biggest bank. Danamon promotes Manulife Financial’s insurance products and gives the insurer 3,000 sales locations extending to both urban cities and smaller markets with fewer than two million people.

Likewise, Manulife Financial entered into similar partnerships with Alliance Financial Group Bhd (AFG) in Malaysia and Vietnam’s Ho Chi Minh City Development Joint Stock Commercial Bank.

Indonesians spend about Canadian $35 a year on life insurance and fewer than 10 percent are covered. The country’s middle class is expected to grow as annual gross domestic product has stayed at or above four percent for a decade.

Manulife has established operations in Japan, China, Hong Kong, Thailand, Malaysia, Taiwan, Indonesia, Singapore, and the Philippines, and is looking to enter other high-growth markets in India, Korea, and Cambodia.