Prudential’s Asia boss calls local talent key to success
Although the local insurance industry is large, ranking 9th in the world in premium income in 2010 according to the global reinsurer Swiss Re, domestic insurance companies’ overseas operations are not on the same scale.
Local life insurance leaders such as Samsung Life and Korea Life have made attempts to expand their footprint in Asian countries such as China and Vietnam, while general insurers such as Samsung Fire & Marine and Hyundai Marine & Fire have followed group affiliates to open branches in nine foreign countries each, including Indonesia and Japan.
In this manner, Korean insurers might do well to take a page from PCA Group, the Asian division of the U.K.-based financial services multinational Prudential plc, which has a substantial presence in 12 Asian markets, including ranking No. 1 in India and No. 2 in China among foreign insurance companies as of the first quarter of this year.
After entering Asia in 1924, PCA Group has grown to serve more than 12 million Asian customers by operating life insurance, asset management and consumer finance businesses not only in giant emerging nations such as China and India but also in sophisticated financial markets such as Singapore and Hong Kong and comparatively fledgling markets such as Vietnam. The group’s local unit is PCA Life Korea, specializing in the variable universal life segment.
The man in charge of the various permutations of PCA Group’s life insurance business across Asia is Tony Wilkey, chief executive of insurance at PCA Group. An insurance industry veteran with about 20 years under his belt, he was PCA Group’s chief operating officer before coming to his current post in 2008.
Wilkey sat down with the Korea JoongAng Daily to talk about the significance of local leadership in a multinational company, the importance of securing good talent and the key to longevity in Asia.
Q. What differentiates PCA Life Korea and the group as a whole from other life insurers?
But I believe for our business to be successful long-term, we have to have local leadership that understands the country, the language and the people. And if you can get world-class local leadership ?? which you can and which we’ve done ?? that is a real competitive advantage.
The president of PCA Life Korea, YJ Kim, mentioned that PCA Group is different from other multinationals in that it gives local management more flexibility, more discretion.
We talk about [PCA Group] operating in 12 markets, but I don’t like that term ?? we operate in 12 countries. And to be truly successful, you have to understand the marketplace of each country. To me, it’s common sense that local leadership will have a better ability in that respect.
So in all countries we operate in, our local managers have this flexibility and discretion to a degree. There are standards that are non-negotiable revolving around financial and operational risk, compliance, governance and protecting the brand, so we have a balance between such boundaries and having local executives empowered to be able to execute agreed strategies.
How does this emphasis on local leadership affect PCA Group’s business performance?
A good illustration of our emphasis on local leadership is the chart of PCA Group’s new premium income by country. With other multinational [insurers] that are in multiple markets in Asia, you will see significant concentration on a few countries, with one country representing, say, 60 percent. But although we are in 12 countries, not a single country takes up more than 25 percent of our total premium income. None of our foreign competitors can paint this picture.
Such balance provides risk management and diversification. Even though global and regional economies are becoming more and more interlinked, there’s always something happening in individual countries in terms of regulatory change or competitive shifts. So I get a lot of comfort from the diversification of our businesses across the region.
What policy changes could help develop the local insurance sector?
In terms of regulatory reform that might promulgate the insurance industry, I think there are significant opportunities in tax advantages that might come from the government.
Korea does have an aging population, and national pension systems are only going to be able to go so far. We see that globally. This is where the private sector, such as PCA Life Korea, can help.
Raising awareness through tax incentives and voter education is one way regulation might help. Because in the long term, it’s going to be a bigger burden on the government if we don’t provide more protection.
What has been PCA Group’s key to success? I imagine that the group’s market leader status in various Asian markets wasn’t solely because you were here first.
It was important that we were here early and we got a lot of experience. But for the last few years, our successes have been driven by the people we have in the organizations.
We are relentless in our pursuit of making sure we have the absolute best talent in all our organizations. People are our raw material in this business, and we only get ahead by attracting and keeping the right people.
We have what is very much a performance culture. People clearly understand what the definition of victory is, which is not sales, but the quality of the sales measured through various financial metrics.
Is that the key to longevity in Asia?
It’s the key to longevity in any business anywhere ?? thinking about the quality of the business that goes on your balance sheet on a daily basis.
There are competitive situations that we walk away from, where competitors are behaving in ways we wouldn’t behave, and that we feel may not be prudent financially. We will walk away from those every time.
We have a standard which we refer to as value over volume, and we take it very seriously. For us, market share is an outcome, not an objective. Our objective is growing a quality business that’s sustainable over the long-term that can deliver value to the shareholders, to the staff through meaningful careers and opportunities, and most of all deliver value to the policy holders.
What we in the insurance business sell are promises, and we have to manage our business prudently in order to be around in 10, 50, 100 years to deliver on those promises.
By Lee Jung-yoon [email@example.com]
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