Manulife Expands Asian Reach with Cambodia Unit

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Manulife Financial said it has received approval to establish operations in Cambodia, which will expand the Canadian insurer’s reach into an 11th Asian market.

Manulife said in a statement it had “approval in principle” from Cambodia’s Ministry of Economy and Finance to set up a wholly-owned life insurance operation in the Southeast Asian country.

Company spokeswoman Laurie Lupton said Manulife will be the first foreign-owned life insurer operating in the country of 14.4 million when it launches operations there sometime in mid-2012.

“This is obviously a great fit for us. It fits in with the whole Asian strategy,” she said.

Manulife is Canada’s largest insurer and owns U.S.-based John Hancock. Its growing Asian presence is a key part of its goal to boost its annual profit to C$4 billion [US$3.906 billion] by 2015.

The company said it had agreed to support the Cambodian government’s efforts to develop the insurance profession and build confidence in the industry in the country.

Cambodia’s economy is expected to grow by at least 6 percent this year, helped by its garment and tourism industries, as well as Chinese investment.

Craig Fehr, an analyst at Edward Jones in St. Louis, Missouri, said any bottom-line contribution from the move is likely years away.

“Having a long-standing presence in an insurance market, which is effectively a confidence business, lends itself to the idea of trying to get in early in new markets and kind of build a brand first and then a business second,” he said.

Manulife’s shares ended the session down 23 Canadian cents, or 1.9 percent, at C$11.77 [US$11.50] on the Toronto Stock Exchange.

Bob Cook, general manger of Manulife’s Asian division, told Reuters earlier this year the insurer was looking to expand into India and South Korea.

(Reporting by Cameron French; editing by Rob Wilson)