DAVOS-Zurich Financial eyes Indonesia, Malaysia growth

Reuters, Wed Jan 27, 2010 7:55am EST

DAVOS, Switzerland, Jan 27 (Reuters) - Swiss Insurer Zurich Financial Services Ltd (ZURN.VX) is exploring ways to take a controlling stake in its Malaysian joint venture and grow its business in Indonesia, its Asia Pacific head said on Wednesday.

Europe's fourth-largest insurer by market value gets most of its Asian-derived revenues from former British colony Hong Kong, but mainland China and other markets in southeast Asia should get a larger piece of the pie, Geoffrey Riddell said.

"The main areas we are focused on are Malaysia and Indonesia," he told Reuters on the sidelines of the World Economic Forum in the Swiss mountain resort of Davos.

Zurich Financial now holds a 40 percent stake in a joint venture offering general and life insurance in Malaysia, but was exploring ways to take control of that business, he said.

"We would like to have control but we want to get to control in a way that is comfortable to the parties involved. It could take time. It could involve so many different things," he said, adding that the Zurich Financial could take a stake of up to 70 percent according to domestic rules.

Neighbouring Indonesia offers the greatest growth potential for the insurer, which only has a small, wholly-owned general insurance business there, he said.

"We'd like to be a significant general insurance and life player and there are multiple ways of getting there on both sides. We are looking at all the options," he said.

"We may acquire, it may be distribution agreements, it may be buying distribution, it is really at the strategic review stage," said Riddell, who is based in Zurich.

Zurich Financial has said it will expand its life insurance unit headcount in Hong Kong by 1,400 in the coming years, bringing the total number of agents to 2,400 as it accelerates business development in the city.

Asia contributes about 7-8 percent of the company's total sales, with Hong Kong accounting for half of regional sales.

"The other markets will have to grow very fast to catch up because we are continuing to grow in Hong Kong," he said. (Reporting by Tamora Vidaillet; Editing by Lin Noueihed)