TORONTO (Reuters) - Manulife Financial Corp MFC.TO, Canada’s largest life insurer, is expanding into Cambodia as part of a long-term bet on southeast Asia that could see the region eventually become the prime growth engine for the company.
Once a company that drew the lion’s share of its profit from Canada and the United States, Toronto-based Manulife earned 34 percent of its core profit from its Asian division in 2011.
Manulife already operates in nine Asian countries, with the bulk of sales in Japan and Hong Kong. Asian profit growth is key to the company fulfilling its pledge to boost net profit to C$4 billion ($3.90 billion) by 2015.
ASEAN (Association of Southeast Asian National) countries - with young populations, high economic growth prospects and few insurance policy holders - account for just a small part of the company’s earnings, but could eventually be a key profit driver.
“We keep on saying that Asia is a growth engine for Manulife globally, but we also see ASEAN countries as a future growth engine for Asia,” Manulife Cambodia Chairman David Wong said in an interview from Phnom Penh, where the company officially opened its head office on Thursday.
“These are the markets that will be growth engines not necessarily today, but maybe 5 or 10 years down the road,” said Wong.
Manulife is already growing strongly in ASEAN countries such as Indonesia and Vietnam. With virtually no insurance industry to speak of in Cambodia, Manulife hopes to get in on the ground floor in a country of 15 million with an emerging middle class.
The company announced plans last year to enter Cambodia, when it was in the final stages of getting a license to operate as the first foreign player in the nascent market.
Cambodia’s economy has enjoyed strong growth over the last few years, as investment from countries like China and South Korea has led to a surge in urban construction.
The Cambodian office has 40 employees, but Wong said it plans to add up to 300 agents by the end of the year and could boost that to 1,000 in 2 to 3 years.
The company will run an information campaign to “educate” the population on the benefits of insurance. Once a business is established and customers are in place, Manulife plans to move into wealth management and retirement products.
“Basically, we’re in the first group of companies offering insurance to the middle class of Cambodia. We see huge potential,” said Wong.
Reporting By Cameron French; Editing by Richard Chang