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MetLife targets to outgrow market in 2012: Khalaf

By Issac John DUBAI - MetLife, a leading global insurer, is targeting to outgrow the market in the Middle East in the coming years after gaining a strong foothold in the region with the $16.4 billion acquisition of Alico.

"Our aim is to outgrow the market in 2012. We expect to further develop business by growing our existing operations in the region rather than going for geographical expansion," said Michel Khalaf, MetLife's president for the newly created Europe, Middle East and Africa region. "However, we are open to exploring opportunities" Khalaf added.

The US-based global company expects to derive its future growth from its international operations - especially from the BRICs and other emerging markets. MetLife expects to surpass the market growth in all countries where it has operations.

"We have some mature and emerging markets with great growth potential," Khalaf said. With this goal in sight, MetLife announced the reorganisation of its business from a US plus international structure into a global organization with three broad geographic regions to better reflect the company's global reach. Steven A. Kandarian, MetLife's president, CEO and chairman further said, "to reach its full potential, MetLife needs an organisational structure that leverages the best of both MetLife and Alico."

"The reorganisation gives MetLife a new organisational structure that leverages the best of both MetLife and Alico. As a global company we will be able to draw on strengths from across each region to drive collaboration and efficiencies," Khalaf said. The acquisition of Alico from AIG not only helped raise MetLife's market cap to $34 billion, but also facilitated access to the Middle East region, which offers very attractive growth opportunities.

The acquisition also dramatically boosted MetLife's footprint globally and enabled access to Alico's life insurance, retirement planning, wealth management, accident and health insurance products, which are available for both individual customers and corporate clients. "In addition to Alico's existing clientele and product range, MetLife gained access to new international markets, providing substantial opportunities for the insurer," said Khalaf, who joined MetLife through the Alico acquisition. He was previously the Regional chief executive officer of Alico MEASA (Middle East, Africa & South Asia).

According to A.M. Best, MetLife moved up in the ranking of the world's largest insurers, from 7^th position last year (2011) to the 4^th largest insurer, based on assets.

MetLife operates in more than 50 countries, including several countries in the Middle East. Khalaf said: "MetLife Alico's immediate geographical expansion within the Middle East is not on the cards, although we do not rule out expansion in other parts. The process of MetLife's re-entry into Saudi Arabia is well under way," he said. "We will continue to grow organically and look at new lines of businesses."

"Face-to-face distribution is a very impor¬tant channel for us, and we expect it to play a major role in the future development of our business in the region, along with the Bancassurance channel which also is one of our fastest-growing distribution channels in the region," said Khalaf. Speaking of other channels, Khalaf said, "Other channels are also rapidly expanding in MEASA, particularly direct marketing, where we see high growth potential."

The company continues to expand operations in the MEASA region with the recent acquisition of a 99.86 per cent stake in DenizEmeklilik, the life insurance and pension subsidiary of Turkey's DenizBank, enabling MetLife to reach four million new customers in one of the world's fastest growing economies. The deal also includes a 15 year exclusive distribution agreement with DenizBank via its branches throughout Turkey.

"Turkey is a strategic market for MetLife. A strong long-term partnership with a banking leader such as DenizBank is very important to us," he said.

Khalaf said: "In the Middle East, MetLife enjoys a unique position with top three ranking in most countries, the UAE is a leading market for us and 2011 has been a very good year. We now plan to build on that performance in 2012."

He said: "the region's insurance market is growing at a fast pace thanks to a growing middle class, which is the consumer category that is critical to the development of the life insurance industry in the region."

Going forward, despite a volatile year plagued by natural disasters and weak economic growth, globally, MetLife expects to see 2011 premiums, fees, and revenues jump 32 per cent to between $46.3-$46.8 billion (compared to $35.2 billion for 2010).

For 2012, the company projects annual revenues to rise about five per cent over 2011, to between $47.3 and $48.6 billion.

MetLife had a portfolio of $457.7 billion as of the end of September 2011, with a Moody's leverage ratio of 26 per cent.

Investment grade corporate bonds make up 36 per cent of the portfolio and constitute the largest asset class; nine per cent of its portfolio consists of US Treasuries while 12 per cent is foreign sovereign bonds. European bank exposure fell to $6.86 billion, according to documents released by the life insurer.

© Khaleej Times 2012