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Providing a Noble Service
By Roland Tan
The life insurance industry has performed very well in Singapore, providing employment for over 4,700 employees and 12,700 sales personnel1. Even so, the industry will always need new talent to tap on emerging markets.
Many Singaporeans are familiar with life insurance. This is not surprising, as the life insurance industry in Singapore is relatively mature and well developed, having achieved a penetration rate of 75% of the market.
There are 13 life insurance companies in Singapore today, each offering a wide range of products and services, such as traditional life protection plans and health insurance. There are also savings, investment or education endowment plans that help individuals cover various needs such as retirement or education funding.
Mr Tan delivering the opening speech
at an agency recruitment seminar |
"The growth of the traditional life insurance business is fairly strong. It registered a double-digit growth between 13% and 18% during the last three years. Besides whole life and health insurance products, a slew of other savings and retirement products have been released to the market in recent years," says Mr Tan Hak Leh, 41, Managing Director of Great Eastern, the largest insurance group in Singapore and Malaysia with about S$46 billion in assets and three million policyholders.
These businesses have benefitted from higher public awareness of the need for prudent financial planning, particularly health insurance. Even though the market seems saturated, there remain opportunities for companies to tailor their products to meet emerging needs. For example, disability insurance is an emerging product that is not yet widely available in Singapore.
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New markets
The market is also becoming increasingly sophisticated. Singapore is steadily becoming a hub for wealth management services, due largely to the rising number of High Net Worth Individuals (HNWI) in both Singapore and the region. Many of these individuals are financially savvy, and they are constantly looking for ways to either protect their wealth or generate better returns through sound investments.
For the life insurance industry in Singapore, this market represents new opportunities, as well as new risks.
"The HNW market is different from the traditional mass market," says Mr Tan. "To tap this market, our underwriting for protection plans may have to be reviewed to ensure prudence."
On the other hand, Mr Tan feels that the current range of investment and savings plans are adequate to meet the needs of HNWI. However, there will probably be a need to re-brand some products in order to reach these individuals.
Mr Tan says, "HNWI have different needs and expect different levels of service. To reach out to these customers, the industry needs to attract new talent who are more sophisticated. We need financial advisors who can acquire a broader range of skills, to meet diverse needs such as estate planning or setting up trusts. The advisors should also be competent enough to advise HNWI on their varied investment needs."
Things have changed
Attracting,growing and developing talent however, can prove to be quite a challenge. Notwithstanding the negative impressions that many people continue to hold about financial advisors, there is also the challenge of convincing young people about the long-term prospects of this career. Young graduates typically prefer to take up corporate careers in brand-name companies because of the prestige or the greater prospects for career progression.
"From a career perspective, many things have changed," says Mr Tan. "Compared to the past, financial advisors today offer an increasingly sophisticated range of savings and investment products. They have to acquire a good understanding of these financial tools to provide potential customers with sound advice. The depth and range of these products have in turn created a lot of room for career progression within the industry."
The best financial advisors understand how their products can provide financial security to their customers. In a way, they help their customers take care of various life contingencies, be it death, disability or major illnesses. How far an individual financial advisor can progress depends on how well he is able to communicate these benefits to his potential clients. In other words, this career is as much an art as it is a science.
The Financial Industry Competency Standards (FICS) framework, with an accreditation and certification system, provides a structured roadmap for professional development that would assist career progression within the insurance industry.
"Moreover, this career operates a franchise model that enables entrepreneurship at very low capital outlays," Mr Tan points out. "The key attraction for many financial advisors is to build his own business unit one day and manage his own team of associates. Insurance companies support the development of these agencies."
Providing support
Insurance companies carry out customer relationship management (CRM) as an enabling tool to support their advisors. Steps are taken to enhance or maintain the company's brand image, and such efforts help to "warm" the leads for the company's financial advisors.
Great Eastern, for example, has set up an Electronic Mobile Agency System (EMAS), which is a mobile computing system that allows a financial advisor to perform fact-finding and needs analysis on the move. Through EMAS, he can compute tables and charts that make product recommendation a much clearer process. Customers would also be able to complete business proposal forms on the spot, greatly enhancing the speed and efficiency of the entire sales process.
Armed with such technology, financial advisors in effect become "frontline underwriters". They are in a good position to assess a customer's financial risks and add value by proposing relevant plans to cover those risks.
"In the end, it's all about helping clients to make an informed decision," says Mr Tan. "Life insurance offers an exciting career that enables one to provide valuable and a noble service to the general public by helping them to take care of their financial needs."
1 Figures from the Life Insurance Association.
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