The Singapore insurance market is dominated by two big insurance companies, Great Eastern Life, which is a subsidiary of OCBC Bank, and NTUC Income, which is privately owned insurance company that is part of the NTUC consortium and controlled by the government. Other major insurance players are the multinational insurance companies such as Prudential and AIG.
Apart from these big players, there is the smaller UOI, which is part of Wee Cho Yaw's UOB Bank Group, and the tiny SHC Capital, a struggling insurance player. In the reinsurance market, the only local player in Singapore Reinsurance.
The big boys naturally dominate the market with their size and established distribution and marketing network. The smaller players like UOI have to participate in the niche markets such as construction and marine insurance. For instance, UOI markets its property insurance when UOL launches its projects.
As can be seen above, SHC Cap has the worst ROE. It has been struggling for a while and has been taking losses in past years, only recently turning to profitability, and even then its profitability is weak. Great Eastern is by far the biggest in size.
The other insurance players have reasonably strong numbers. However it must be noted that many of the insurers recorded significant gains from investments due to the buoyant equity markets. The earnings derived from these gains may not persistent.
Valuation wise it looks like UOI may be slightly undervalued. It is returning a reasonable ROE but yet is priced below book and very conservatively in terms of P/E. Even adjusting for the gains from investments, UOI still looks conservatively priced.
I am not going to do a much deeper analysis of this industry. I tried to adjust the income statements into a comparable basis but the reporting standards are quite different for the three insurance players. In addition they are very different in size and compete in very different ways.
Nevertheless, this brief snapshot is useful for future reference.
Apart from these big players, there is the smaller UOI, which is part of Wee Cho Yaw's UOB Bank Group, and the tiny SHC Capital, a struggling insurance player. In the reinsurance market, the only local player in Singapore Reinsurance.
The big boys naturally dominate the market with their size and established distribution and marketing network. The smaller players like UOI have to participate in the niche markets such as construction and marine insurance. For instance, UOI markets its property insurance when UOL launches its projects.
As can be seen above, SHC Cap has the worst ROE. It has been struggling for a while and has been taking losses in past years, only recently turning to profitability, and even then its profitability is weak. Great Eastern is by far the biggest in size.The other insurance players have reasonably strong numbers. However it must be noted that many of the insurers recorded significant gains from investments due to the buoyant equity markets. The earnings derived from these gains may not persistent.
Valuation wise it looks like UOI may be slightly undervalued. It is returning a reasonable ROE but yet is priced below book and very conservatively in terms of P/E. Even adjusting for the gains from investments, UOI still looks conservatively priced.
I am not going to do a much deeper analysis of this industry. I tried to adjust the income statements into a comparable basis but the reporting standards are quite different for the three insurance players. In addition they are very different in size and compete in very different ways.
Nevertheless, this brief snapshot is useful for future reference.
