A frenzy is underway in the Asian insurance industry and it has made many pay large sums so as not to miss opportunities to participate in the region's fastest growing market. Very few predict a slowdown to happen in the near future despite the skyrocketing prices.
The rising middle class in Asia and growing personal income has pushed takeovers in the insurance industry in the region has increased to a record US$30.5 billion in 2012 alone, according to data compiler S&P Capital IQ.
Nearly US$5 billion more are set to be finalized and this is welcome news for bankers, shareholders and lawyers. One of the insurance firms that would be selling off its insurance unit is AMMB Holdings Bhd of Malaysia.
For many investors, the high valuations and competition from foreign companies present a problematic choice for many as many have to pay high prices for high return businesses or wait for prices to fall but would lose out on potential gold mine opportunities.
According to Thomson Reuters data, Asian insurers have a median P/B ratio at 1.73 when trading, which is twice the number of similar companies in the US and Europe.
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