Standard Life plans to quadruple operations in Asia and emerging markets

The five-year plan is to be spearheaded by Nathan Parnaby, who took on the newly-created role of chief executive of Asia in a recent shake up of senior personnel at the Edinburgh-based firm by chief executive David Nish.

Standard Life has an established, wholly-owned operation in Hong Kong, and two significant joint ventures in mainland China and India. Parnaby expects to establish a “fourth pillar” to the firm’s global emerging market ambitions by entering another new market “or two”, although he declined to be drawn on where this would be as the firm is awaiting regulatory approval.

And while Standard Life intends to continue growing its far-flung operations organically, Parnaby said he “would not rule out” acquisitions, particularly in India where competitors, such as Aviva and Prudential, have been making acquisitions ahead of expectations the market will be liberalised to allow foreign-owned entrants a larger share of the growing domestic insurance and savings market.

Currently, Standard Life’s Asia business is small in comparison to the UK, and Parnaby insists he is chasing sustainable growth. Last year, profits from some, but not all, of the firm’s emerging market ventures reached £8 million compared to £302m for the group as a whole. Long term savings new business amounted to £409m from China, India and Hong Kong compared to £10.1 billion.

Indian operations comprise an asset management business and a life business, both of which are a joint ventures with the publicly listed Housing Development Finance Corporation. Since it was established in 2000, £100m has been has invested in the Indian businesses. Parnaby said it is “worth an awful lot more than that”. He confirmed the business first broke into profitability in the second half of 2011.

While Parnaby admits Standard Life experienced a set-back in China when a proposed joint-venture with Bank of China fell through in 2010, the company has since focused on growing Heng An Standard Life Insurance Company, its joint venture with government-owned Tianjin TEDA Investment Holding Co.

He said the firm has “ambitious plans” there, having recently recruited a new Chinese chief executive. The business has 1,300 employees in 22 cities although he admits growth has to date been a “bit slow”.

The thrust of Standard Life’s growth in Asia will target increasingly wealthy expats.

Parnaby said: “Trying to access internationally mobile business in south-east Asia is something we are seriously looking at. There are other emerging markets we would like to tap into. It is a rapidly growing market.

“Wealth in Asia has been growing although the recession will have slowed things down.”