AIA, Asia's largest publicly-listed life insurance and securities group, is looking to expand its portfolio to logistics and real estate-related projects in markets such as Thailand amid economic uncertainties.
Mark Konyn, the company's Hong Kong-based group chief investment officer, said among alternative assets the firm is seeking are emerging investment opportunities in the logistics segment in Asia-Pacific, especially in Thailand.
"We see the economic structure continuing to shift, with the provision of last-mile product delivery requiring a very intricate and sophisticated logistics programme in order to meet service standards," he told the Bangkok Post.
Similar to the situation in other economies, more businesses in Thailand in both retail and wholesale are thinking about their e-platforms with regard to the way the can distribute products as well as connect with their customer base.
According to Mr Konyn, the digitisation of business could be used to create huge efficiencies in the logistics process including manufacturing, warehousing, distribution and shipping.
In a country with a large population and a high level of consumption domestically, the need for logistics infrastructure has become more important to the Thai economy which has a large service sector, said Mr Konyn.
In recent years, AIA has diversified its portfolio through global investments in real estate projects, funds and government bonds. In Thailand, the insurer invested 14.8 billion baht in three office buildings with a combined space of 170,000 square metres.
The third building is AIA East Gateway, a 33-storey property located on Bang Na-Trat Road, which was launched on Jan 25 to celebrate AIA Thailand's 85th anniversary. As one of Bangkok's fast rising commercial zones, Bang Na-Trat is considered to be a prime location for both local and international companies seeking to develop their business in the Eastern Economic Corridor.
In addition to logistics, AIA is also interested in student and senior housing projects which are among the most reliable, long-term assets to serve the increasing demand globally. A growing ageing population and the need for good living conditions and a safe environment for students are the main drivers, with parents being willing to fund the latter for their children.
"We think these alternative real estate businesses are more resilient, especially when we have an economic downturn," said Mr Konyn.
Data centres are another form of infrastructure and one of the mega trends that the company is looking to integrate with environmental, social and corporate governance components, using alternative energy for data storage to achieve a high level of efficiency to achieve sustainability, which is becoming a prevalent theme in Thailand, said Mr Konyn.
Operating in 18 markets, AIA had total assets worth US$302 billion as of June 2022. The group serves the holders of more than 40 million individual policies and has over 17 million people participating in its insurance programmes.
Regarding the outlook for the insurance industry overall this year, Mr Konyn said he was definitely optimistic about business performance going forward despite the possible recession, as more consumers are focused on the importance of their wellbeing as the world emerges from the Covid-19 pandemic.
"I think the need for insurance becomes a high priority for people because of their understanding of risks coming through the pandemic. People will want to receive a higher quality of products and services," he said.
"Insurance is a long-term business which tends to be quite resilient during an economic downturn because people stay committed to paying their premium, and we are not in a position to reduce our costs as other businesses do."
Nonetheless, Mr Konyn said AIA still needs to be mindful about the recession, as there are economic consequences that could affect the business in terms of the company's liabilities and the value of its investments.
"We need to be well diversified in our investment book, and we need to have a sustainable investment outcome," he said.
