In Becoming Malaysia's Top Dog, Integration Is the Priority

Bill Lisle, the CEO of AIA Bhd., answers the following questions: -AIA’s purchase of ING’s Malaysian businesses. Worth $1.7 billion, it reportedly gave AIA the No.1 mantle in Malaysia while extending your lead over Prudential in Asia. Has the money been worth it? - AIA now has 25% of the Malaysian market. What does this mean in terms of new growth prospects? Does this now make Malaysia more of a cash-generative market rather than a growth sector? - The “protection gap” in Malaysia, which stood at $380bil in 2010, and has doubled over the past 10 years. What exactly is this? - Integration costs have reportedly hurt margins. Where is most of the integration spend going?- Timetable before full integration occurs - All hands on deck, therefore, to integrate ING. Tell us how it's going, both good and bad. > Agencies? > Distribution? > Branding, customer engagement? - Insurance industry - penetration - dynamics - demographic - What does this mean in terms of building on your vast market share? - And where are the growth pockets? Takaful could certainly be one area .. - You have said that one of the ways AIA will grow is with technology: the launch in January of a tablet-based application called ‘interact live point-of-sale’, where agents are able to conduct insurance business using the tablets and policies could be issued in less than an hour.How much of a game changer can this be? - And your >16,000 insurance agents -- attrition - Agency generate about 75% of new business -- will be rebranded as “life planners” to reflect the greater role they would play. 10% Bumi agents right now What kind of greater role? And just what will a simple role redesignation mean in terms of mobilising this army? - You have spoken of attracting more Gen Y agents … - Bancassurance - plans to grow its bancassurance relationship and takaful business through its own takaful company and ING Public Takaful Ehsan Bhd which was formed by ING, Public Bank Bhd (PBB) and Public Islamic Bank Bhd, a wholly-owned subsidiary of PBB. Problem is, takaful is an Islamic product and Public is a Chinese bank. Are you not therefore preaching to an already converted market? - AIA is also one of the eight private retirement scheme providers. But months after winning accreditation, we have yet to see some concrete products? - Granted, ING has just been purchased, but as at fiscal end-Nov., which is your financial year-end, AIA as a group posted a 27% percent jump in new business growth. Malaysia grew just 17 percent. Reasons - And on an Asia-wide basis, at about $30 billion AIA is nearly double the Pru in embedded value-terms. But margins are smaller. And so is top-line growth. This centres on the fact that around 55 per cent of AIA’s embedded value (a measure of future profitability) lies in Hong Kong and Singapore. These are developed countries, which are seen as generating cash rather than growth. A problem in a fast-growing Asia? - Elections - market implications - cash levels? See omnystudio.com/listener for privacy information.