Hiscox has expanded its direct insurance business into Asia with the acquisition of DirectAsia, an online insurer operating in Singapore, Hong Kong and Thailand.
The deal, in which Hiscox will pay Whittington Group $55 million plus an earn-out over four years, furthers Hiscox’s established strategy to balance its volatile, big-ticket risk business with more predictable retail insurance operations.
Bronek Masojada, Hiscox CEO, says: “DirectAsia is a challenger brand with real potential. It gives Hiscox a 21st century distribution platform in Asia that leapfrogs traditional routes to market. DirectAsia complements our direct-to-consumer businesses in Europe and the US, and in time, we will use it to distribute Hiscox products.”
DirectAsia, which began business in Singapore in 2010, focuses on motor insurance, one of the few compulsory insurance policies Asians must buy, but also offers travel, personal accident, healthcare and life insurance.
Investing in Asia
Hiscox was attracted by DirectAsia’s direct business model, in which it offers customers cover online, in contrast to existing competitors, who sell through agents. The Group has plans to invest a significant amount of money to grow its new Asian subsidiary. Hiscox already has growing direct-to-consumer operations in Europe and the US. Hiscox UK is migrating its IT system to the same platform used by DirectAsia.
The business will continue to trade under its existing name, and the local management team will remain, led by Steve Langan, who will become DirectAsia’s CEO as well as being the Managing Director of Hiscox’s UK and European operations.
Anthony Hobrow, CEO Whittington Group, says: “We have developed a successful entrepreneurial business, taking on the global giants with traditional distribution models. We are very pleased that we have been able to pass this unique platform to Hiscox who can supply expertise, capital and a strong customer focussed culture to help us further develop and grow the business.”
The acquisition has been approved by the Monetary Authority of Singapore and is subject to regulatory approval from the Office of the Commissioner of Insurance (OCI) in Hong Kong. The Group is also working with the regulatory authorities in the UK, Bermuda, Thailand and at Lloyd’s.
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