* Tucker to retire from AIA in Sept., joining HSBC as
* The 59-year old Brit to be replaced by regional CEO Ng
* Tucker's retirement comes amid growing challenges for AIA
* Analysts say group still well-positioned, transition
(Recasts headline, lead, adds fresh comment)
HONG KONG, March 13 (Reuters) - Insurer AIA Group Ltd
's new CEO, Ng Keng Hooi, will have big shoes to fill
as the group faces the prospect of slower growth and digital
disruption in some of its key Asian markets, industry insiders
and analysts said on Monday.
The group's shares fell 3.3 percent on Monday afternoon in
Hong Kong as investors digested the news that current CEO Mark
Tucker will be retiring in September after what was regarded as
a stellar seven-year stint at the helm.
"Clearly, Tucker has been a driving force at AIA and anybody
taking on that CEO role is stepping into a big legacy," said
Keith Pogson, senior partner of APAC financial services at EY.
"There will now have to be a period of thoughtful reflection as
to how AIA moves forward post Tucker."
A one-time professional footballer who has held several
leadership jobs including running Britain's Prudential,
Tucker is leaving the world's third-largest life insurer as it
faces new headwinds amid a regulatory crackdown in China and
sluggish growth in markets including Thailand and South Korea.
He will be succeeded on Sept. 1 by Ng, who has served as AIA
regional chief executive for the past six and a half years. Ng,
62, joined AIA in 2010, before which he was group CEO of
Singapore-based Great Eastern Holdings and served a 20-year
stint at Prudential.
Tucker, 59, is a tough act to follow. Since taking the
company public shortly after his appointment in 2010, the
British-born executive has presided over a doubling in AIA
share's price - driven for the most part by a pivot in focus
Over the past seven years, the company has expanded rapidly
into key growth markets including India and China, leading to a
quadrupling in the value of new business at AIA to $2.8 billion
between 2010 and November 2016, according to the company.
"Under his leadership, AIA has achieved impressive growth
via steady topline expansion, ongoing product mix improvement,
expansion in distribution channels, accretive acquisitions, as
well as expansion into new markets," analysts at Citi wrote on
Monday, noting the company was still well-positioned with an
experienced senior management team.
The group put in another strong performance in 2016 buoyed
by steady demand for policies in Hong Kong, with mainland
Chinese seeking overseas investment opportunities to cushion the
impact of a weakening yuan. China and Hong Kong together
accounted for about half of new business growth globally at AIA.
But last year's surge in mainland Chinese seeking policies
in Hong Kong has led Beijing to crack down on such purchases,
and worries about further regulatory tightening are weighing on
investor sentiment, according to analysts and industry insiders.
AIA shares dropped 15 percent in the December quarter, and
were down 6 percent for 2016 - their first annual decline since
the insurer's market IPO. Citi said on Monday the group's
historical growth had set a high base and that much of the
easiest expansion had already been realised under Tucker's
"We also continue to believe lingering capital controls in
China may further dampen growth from here," it said.
The group's other major markets include Singapore and
Malaysia - the Southeast Asian countries that have become a
battleground for foreign insurers attracted by the region's
lower insurance penetration levels. Industry insiders said these
markets had also seen a tough start to the year.
“It has been a difficult start to the year for the insurance
industry. The very profitable mainland (Chinese) business is
showing signs of slowing down because of the crackdown on
capital outflow channels," said a senior executive at a rival
group in Hong Kong.
"Secondly, some other regional markets like Thailand, which
have been strong growth areas, have showed a decline recently.
So the Asian insurance industry is braced for a few tough
Beyond slowing growth, AIA and its rivals, which have been
lightly regulated compared to their banking peers, will face a
greater compliance burden going forward as well as increased
competition from digitally-savvy competitors.
"Are you opening yourself up to being disrupted, and how
does digital fit into that picture? These are the big challenges
in the Asian insurance market," Pogson said.
(Reporting by Michelle Price and Sumeet Chatterjee; additional
reporting by Saikat Chatterjee in Hong Kong; Editing by Stephen