Results

Our established businesses continued to perform strongly. In Malaysia, our joint venture business, AmG, further strengthened its insurance margin to 18.1%, up from 13.2% in financial year 2011, on the back of significantly improved claim processes.

In Thailand, our business reported GWP growth of nearly 22% in local currency terms. The reported result included the impact of the catastrophic Thai floods that occurred during the year, which cost the Group a net $62 million. Excluding the impact of the floods, the Thai business performed soundly, and improved its insurance margin to 9.3%.

In our developing high growth markets, SBI General, our joint venture business in India, registered GWP growth of nearly 300% in local currency; while our new ventures in China and Vietnam offer exciting prospects for the future.

THIS YEAR

We made significant progress in our strategy of achieving long term profitable growth in Asia, through a combination of acquisitions and organic growth:

■ we finalised our 20% strategic investment in Bohai Property Insurance in China, giving us access to a network of 265 provincial and sub-branches, with over 3,000 employees;

■ in Vietnam, we acquired a 30% strategic interest in AAA Assurance, the country’s ninth largest general insurer, and sixth largest motor insurer; and

■ we announced plans to expand our presence in Malaysia by purchasing 100% of Kurnia Insurans (Malaysia), through our Malaysian joint venture, AmG, which will make AmG the top general insurer in the country with 13.5% market share, and the largest motor insurer, with 22% market share – almost double that of its nearest motor rival. We expect this transaction to be completed in the first half of the 2013 financial year.

We are in five of the six priority markets we have identified in Asia, each at differing stages of development, growth and return:

■ our established markets of Thailand and Malaysia are well developed and are already producing strong returns;

■ the emerging giants of India and China have very strong growth rates; and

■ Vietnam is a younger market, with a very low level of insurance penetration and high GDP growth rate.

This portfolio approach allows us to use the returns from the more mature and profitable businesses in the established markets to support the still developing, currently less profitable, but longer term high potential businesses, in the emerging and developing markets.

NEXT STEPS

To achieve long term profitable growth, our priorities are:

■ in Malaysia, to successfully integrate Kurnia and capture the benefits of market leadership in motor;

■ in Thailand, to grow the business to be the second largest motor underwriter, and achieve a top three position in the overall market;

■ in India, to achieve profitability by the 2015 financial year;

■ in China, to achieve profitability by the 2015 financial year;

■ in Vietnam, to become a top three motor insurer; and

■ achieve market entry in Indonesia, if an appropriate opportunity arises.