Canada Vs Malaysia
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Countries: Canada vs Malaysia
Issues that will be analyzed:
Manulife has been pressing the Canadian government to allow them to sell banking products and on the other hand, restrain banks in Canada to cross-selling insurance products through Canadian branch networks.
Manulife is selling life insurance products in Malaysia, a country that is dominated by Islamic laws and rulings, also a country that has large Chinese population, which in general, considers insurance products in a different philosophy.
Manulife is facing pressure in the aftermath of the recent financial crisis. In particular, a prolonged low interest rate period in Canada hurts Manulifes capital reserves. Would Manulife still fully operate in countries, such as Malaysia, or would Manulife focus on its core North American insurance business. The Manulife shares have been sliding for a few years and still facing downside pressure.
Manulife is the largest insurer in Canada, the second largest in North America, and one of the biggest in the world with operations in Canada, United States, and Asia. It offers various products ranging from insurance, banking, and investment management. This report aims to assess the market potential for Manulife to enter the insurance market in Malaysia and to provide recommendations on how to operate effectively in both Canada and Malaysia.
Malaysia is one of the fastest growing economies in Asia, and is also one of the most open economies in the region. The government is doing its best to attract foreign investments into the country and is willing to offer lavish tax incentives and other concessions. A multinational insurance company in Malaysia is subject to a maximum of 70% foreign-ownership requirement. However, according to Bank Negara Malaysia (BNM), the Malaysias central bank, this threshold can be relaxed on a case by case basis for players who have the ability to consolidate and rationalize the market. Malaysia has relatively advanced technological infrastructures and has a relatively high proportion of internet users compared to its peers in Asia.
Malaysia has a culture that is high in Power Distance and considered to be more Collectivist as opposed to Canada which has low Power Distance and considered to be more Individualist. These cultural differences between Canada and Malaysia are important considerations for Manulifes strategies to enter Malaysia.