The faint strains of the musical Annie were almost detectable at the IAG annual general meeting last week as the company outlined its Asian ambitions and long-term plan to boost its depressed share price.

IAG told a gathering of shareholders it’s betting its bottom dollar the sun will come out tomorrow, as the company clears the cobwebs and the sorrow from its UK operations and aims instead to build a new empire in Asia.

CEO Mike Wilkins told shareholders the sun will come out in the UK, despite the company’s track record reading like a cautionary tale for any ambitious insurer hoping to turn a profit in arguably the world’s most cut-throat insurance market.

Despite $367 million in writedowns revealed in August this year – and calls from shareholders to “pull it, get rid of it” – Mr Wilkins has no such plans. Remediation of its UK assets is the priority, with an eye to move out of low margin general products into niche lines such as fleet and special risks.

IAG’s long-term plan to turn around its UK ventures goes well beyond 2014. However, any further losses would place the group in a difficult position.

Answering calls to abandon the UK – colourfully described as a “graveyard for Australian insurers” – Chairman Brian Schwartz retorted that it’s “not a good time to exit” the market.

“We understand your position but we feel that it’s the best option to remediate it and assess it when the time is right,” he told shareholders last week.

Mr Schwartz is also confident the sun will come out in Asia, where IAG has held a beachhead since 1998, but has failed to make tangible returns.

In the 12 months to June 30 this year, the group’s Asian assets delivered $5 million in pre-tax profit on revenues of $200 million. This was down from the $15 million returned the previous financial year on revenues of $228 million.

In touting Asia as the new epicentre for growth, some perspective is required. Asia still only accounts for 2% of IAG’s total gross written premium, and the company has previously told analysts it would power down acquisitions from 2010 as it enters the five-year “Horizon 2” consolidation phase in Asia.

However, IAG is not without growth potential in Asia. India is the jewel in its Asian crown, and could prove to be its shrewdest international play.

IAG holds a 26% share in SBI General, a joint venture with the State Bank of India which is focused on SME and corporate lines and is expected to become a top-three player within a decade.

The Indian insurance market is expected to grow by up to 20% year on year during the next 10 years.

But IAG’s Asian ambitions extend beyond the world’s largest democracy, reaching into the world’s most populous country.

The Chinese insurance market is, as expected, a growth market and according to Tower Watson’s latest report in August, the market generated gross written premium of RMB673.7 billion ($102.5 billion) in the first five months of this year.

This was up 36% on the same period last year, based on figures released by the Chinese Insurance Regulatory Commission (CIRC).

While general insurance gross premiums rose by 35% to RMB168.8 billion ($25.6 billion) during the five months, China’s insurance market is dominated by life insurance, whose premiums during that period rose by 37% to RMB468.3 billion ($71.2 billion).

Personal accident and health is a very small part of the Chinese insurance market and was worth RMB40.5 billion ($6.1 billion) in premium income.

Not only is there a strong local insurance industry, but the country has also seen many global insurers enter the market through joint ventures.

Global players such as Tokio Marine, Axa, Federal Insurance, Manulife, Aviva, John Hancock and Sun Life have all struck joint ventures with Chinese financial institutions.

Last week, Axa and Melbourne-based Axa Asia-Pacific, through their joint venture with Minmetals, agreed to becoming a strategic partner with the Industrial and Commercial Bank of China (ICBC).

This will result in a change in the share structure of the Axa-Minmetals joint venture, with ICBC owning 60% of the company, the Axa entity owning 27.5% and Minmetals the remaining shares.

The Axa stake will still be jointly owned by the French insurer and its Australian subsidiary, with the Paris-based end of the company owning 51% of the holding.

ICBC has more than 200 million customers and is ranked number one by assets in China with more than 16,000 branches.

The entrenched position of the existing insurers will not make it easy for IAG to penetrate the China market with ease.

According to the CIRC, there is an unbalanced situation in the Chinese insurance market in both sales channels and products.

It noted the significant growth in the bancassurance distribution model, as favoured by the latest Axa move, and the slow growth in traditional agency and direct sales channels.

The CIRC also noted slow growth in accident insurance and a short-term deterioration in term policies this year despite the industry continuing to grow.

It’s just another hurdle IAG will have to negotiate as it searches the globe for profitable overseas businesses. But with eyes fixed firmly east, the group will at least have a better chance of seeing the sun rising.