AIA's 1st Bancassurance Conference held in Singapore
On 25 November 2013, AIA's Inaugural Bancassurance Conference was held at the St Regis hotel in Singapore. Around 100 retail bankers and AIA senior executives attended the conference. Mark Tucker, AIA Group Chief Executive & President, said in his Welcome Speech that the objective of the Conference is to provide a forum to exchange insights, to stimulate forward thinking ideas and to explore the potential opportunities in the market.
There was a special line up of the eminent speakers, who are experienced experts with unique field insights which helped participants to look at situations with a fresh perspective. Here is the snapshot of the speakers' presentations.
Macro-economic Trends in Asia and the Impacts on the Banking and Insurance Industry by Ilian Mihov - Dean and Professor of Economics at INSEAD
Professor Mihov presented a comprehensive picture of macro-economic trends in the World. He said that "innovation" and "incentives" are the 2 sources of growth in the world since the Industrial Revolution in 1820. And if there are strong incentives to innovate, it will give no limit to growth, be it a country or a company. The introduction of Intellectual Property introduced in the 90's has given incentives to people to innovate as inventions have become rewarding.
From his research and studies, he summarised that there are 4Is for economic growth:
Innovation - the incentives to innovate will drive up productivity growth in the country. This is the main force behind the growth in the developed countries, namely US, Japan, France and Germany
Initial Conditions - If the country is poor, it provides a potential for them to catch up with the developed countries through investment.
Investment - stability and good quality institutions drive investment. Countries with high investment rate of 25% or more of GDP created miracles.
Institutions - The best way to ensure sound macroeconomic policies and political stability is to build institutions that create incentives for stability: Independent central bank, checks and balances, rule of law, transparency.
Professor Mihov is very optimistic about the economic growth in Asia Pacific and there are high growth opportunities in banking and insurance. For insurance, with the increases in income per capita, insurance should become a more appealing option. Every 1% increase in GDP per capita will increase the per capita premiums by 1.86%. Insurance growth will be driven by significant under-insurance in life, health protection gap and aging.
Consumer Trends in Asian Retail Banking by Seow Chien Chew, Partner, Bain & Company
In her presentation, Seow Chien talked about the 4 key themes that affect the banking sector in Asia and 5 imperatives for banks to prepare for the future.
4 key themes affecting the banking sector include:
Emerging New Middle Class in South East Asia - This new segment is growing with an estimate of 200 million people in the region. Their income levels allow them to afford TV set and car and they have different price points as compared to the traditional middle class. It is important for the banks to redesign their value propositions to serve this growing segment of customers.
Power of Customer Advocacy - To stay ahead of the competition, customer experience is of significant importance to banks. Creating superior customer experience will drive customer promoters and customers will keep coming back. It is found that the value of a customer promoter is 5 or 6 times higher than the value of a detractor because the former buy more, stay longer and recommend their friends to come to the company.
Shifting Competitive Boundaries - A variety of players including large locals, regional banks, Japanese mega bank and Chinese mega banks are competing in the field. Non-traditional competitors including retailers, internet providers are encroaching into banking space with innovative propositions.
Digitisation of Services - A new phase of digitisation is impending where banks should have digital interface for much more complex interactions, digital advisory, digital sales and innovations around customer experience.
Seow Chien also shared some key findings from their global survey regarding "Retail Bank for the Future". There are 5 key imperatives for the banks to prepare for the future:
Create digitally enabled customer experiences
Build an omni-channel sales and service models
Position technology at the heart of strategy and execution
Fund investments through efficiency gains
Organise as an innovative enterprise
Digital Bancassurance - How Tablets are Transforming the Way Insurance is Perceived and Sold by Hugh Terry, Editor of the Digital Insurer
Hugh's presentation was aligned with Professor Mihov's and Seow Chien's sharing that innovation is key for companies to stay competitive. Hugh has specifically discussed the role of Tablet Toolkits in the transformation of bancassurance business.
Hugh believed that the primary benefit from Tablets is to increase sales effectiveness though a better customer experience. There are other benefits if high usage is achieved which include lead analytics, improved compliance to sales best practice, back office productivity from digital proposals, reduced overheads, business intelligence, recruitment tool and platform for more automated underwriting. Hugh also introduced AIA Point of Sales Tookit as a case study - AIA has a strategic lead in the use of tablet tookits because AIA's tablet has a broad set of functionality and it has the ability to roll out regionally and extend to both agency and bancassurance.
In his final comments, Hugh advised that it is the time for the bancassurance business to embrace change and start building digital models. If we don't utilise digital thinking, plenty of others will.
Risk Taking and Decision Making - Impacting Your Role as a Leader by Caspar Berry, Motivational Speaker, Professional Poker Player and Entrepreneur
Caspar Berry is the final speaker who gave an entertaining and inspirational speech on risk-taking and decision making on Poker, Business and Life.
Based on Caspar's vast experience as a poker player, entrepreneur and actor, he said that the biggest risk that we can take in the long run is not taking enough acceptable risk NOW. Moreover, every decision is an investment decision as we invest our time, money, reputation and many other things into it.
A great decision, in Caspar's words, is "One that, if repeated, in the long run, propels the decision-maker most efficiently and effectively towards their desired destination given the constraints and parameters that they have placed upon the conditions of the journey."
In addition to the speeches, AIA set up the AIA Vitality Booth and iPoS Demo Booth at the foyer to allow participants to get to know better AIA's Wellness Program and the Tablet Toolkit.
Very positive feedback was received for the Conference as the Speakers were truly inspiring and shared unique insights to the participants. We look forward to have another great Conference set-up in 2014.
Manulife Investor Sentiment Index reveals that saving for retirement is Singaporeans' top financial priority
Manulife's Investor Sentiment Index (MISI) in Asia is a quarterly, proprietary survey measuring and tracking investors' views across seven markets in the region on their attitudes towards key asset classes and related issues in China, Hong Kong, Japan, Indonesia, Malaysia, Singapore and Taiwan. In March this year, the inaugural MISI in Asia was released, Q2 results were released in July and the most recent survey results were announced in October.
The MISI is based on 500 online interviews in each market of Hong Kong, China, Taiwan, Japan, and Singapore; in Malaysia and Indonesia it is conducted face-to-face. Respondents are middle class to affluent investors, aged 25 years and above who are the primary decision maker of financial matters in the household and currently have investment products.
According to the MISI Q1 2013 survey results, despite Singapore investors' early head start in life when it comes to planning for retirement, 57 per cent of them are pessimistic about being on track in achieving their financial goals. At the same time, 52 per cent of Singapore investors do not think their personal savings alone can afford them a desirable life at retirement.
The survey also revealed Singaporeans' assets (excluding primary residence) that consisted of cash was the highest in the region. The number of months of personal income in cash was 38, 35 and 39 months respectively for the three quarters. Despite this, over half of Singapore investors still feel that their cash holdings were inadequate.
In MISI Q2 2013 survey results, 42 per cent of Singapore investors do not invest their cash because they are worried about making the wrong investment decision. A third of Singapore investors who did not like other investment options revealed that they did not shift cash into other assets because they do not understand the options available.
According to the MISI Q3 2013 survey results that was released in October, Singapore investors responding to the survey expect to be in retirement for 18 years on average, but their estimated savings will last only 12 years, leaving a six-year gap. In today's monetary terms, this amounts to a savings shortfall of SGD250,000 per person on average, based on investors' own calculations. While most Singaporeans say they have started planning for retirement, 32 per cent have not.
To read the article in full, go to http://www.lia.org.sg/files/newsletter/2013/MISI_Article_Dec2013.pdf