Allianz, Europe's top insurer, believes market turbulence has created acquisition opportunities in Asia, and predicts Asian sales will climb to 10 percent of total group income, or 10 billion euros ($15 billion).

The Munich-based firm generated 8.8 billion euros from selling life insurance and property and casualty cover in Asia last year, up nearly 30 percent, and said its Asian business had escaped the fallout from the subprime mortgage crisis that has battered much of the financial industry.

Allianz has been focused on expanding its existing business in Asia, but its regional chief said it may sift through some of the wreckage from the credit storm for cheap acquisitions.

If you look at Asia Pacific, the capital bases of finance and insurance companies have come down. Of course, this creates opportunities for us, Asia Chief Executive Bruce Bowers told Reuters in an interview.

If markets remain turbulent, balance sheets of local companies will be eroded and there will be opportunities to create market share.

He said he was not in talks with potential targets.

Bowers, 49, who took over as Asia CEO in 2004, said Allianz is experiencing brisk growth in India, where a joint venture with Bajaj sells 450,000 life insurance policies a month.

India is about small policies but extremely high volume.

Allianz's life insurance policies in India are worth around $3,000-$4,000 on average, or $350-$400 in annual premiums, versus around $60,000 per policy in more mature markets such as Taiwan. Property and casualty premiums are around $60-$75 a year.

With the life insurance penetration rate at only about 4 percent the opportunities are huge, Bowers said.

Premiums in India soared 72 percent to 1.8 billion euros last year. Allianz owns 26 percent in the Bajaj venture and has been waiting for more than a year for a change in foreign investment laws that could bring its stake in the life insurance venture to up to 74 percent and to 50 percent in property and casualty.

CHINA TOUGHER

In China, premium growth has been even stronger, more than doubling to 300 million euros, albeit from a much lower base as Allianz awaits regulatory approval to expand.

We have applied to convert our property and casualty branch in Guangzhou into a subsidiary and we're hoping to get it this year. The next step would be to roll out the branch network, Bowers said.

The China life operation is capital intensive and we're not at a stage yet where we can break even for China. Life companies normally take between seven and 12 years to break even and we're probably in the fourth year of that cycle.

Allianz is also waiting to launch a life insurance start-up in Japan, arguably one of Asia's most mature markets, where it plans to sell variable annuity products -- mutual fund-based investments -- through a bank partner that it has yet to name.

It's still the second-largest economy in the world and it's an economy you can't ignore, a market where you need to find a niche. It's best not to be everything for everybody because that's all taken care of.

China India Investment