When was Standard Life (Asia) set up?
It was established in 1999 and registered as an authorised insurer in Hong Kong. Our group, Standard Life plc, was established in 1825 and headquartered in Edinburgh.
When did you join the group?
I have been working for Standard Life (Asia) for six years, since January 2007. I took up the role as chief executive for Hong Kong in October 2010.
How many employees are there in total and what is the number of sales staff?
The number of staff in Hong Kong reached around 120 as of April with all functions in one office including sales and marketing, risk and compliance, finance, actuarial, operations, IT, administration and HR.
We have 13 sales staff, of which five are from proactive sales support.
I came to Hong Kong with 24 staff five-and-a-half years ago. The number of staff increased more than 50% over the past five years, and from 75 in 2010 to 120 in April this year.
Is there much competition from domestic providers in the region?
Big players such as retail banks have taken up the biggest piece of market share and dominated in the investment-linked insurance market in Hong Kong. Most of the big players are operating in multi-channels through banks, IFAs and agency forces. In terms of the whole insurance market, investment-linked insurance product (Class C) is only 29%, so that there is a huge potential for growth.
What is the company’s set of core values?
With the launch of the rebranding campaign last August in Standard Life Group, there are four key values to drive our business.
We try to make it easy for our customers to deal with us, while at the same time acting consistently to help them plan their finances with confidence in our service.
Moreover, we are responsible for acting in our customers’ best interests and looking after their money better than they could.
How does Hong Kong differ as a market compared with other countries in Asia?
There has been stringent regulation for selling investment products in Hong Kong since the Lehman mini-bond crisis covering intermediaries’ selling, commission and product disclosure.
Bank distribution is dominated in Hong Kong by investment-linked insurance products.
What is the profile of your client base?
Our clients are from the northeast Asia region, including Hong Kong, Taiwan, China and Japan.
Where did you make up the bulk of your new business last year?
Overall, we still achieved double-digit new business APE (value of regular premiums, plus 10% of any new single premiums written for the fiscal year) growth in 2011, rising 19% year on year, which was well above the 8% growth of the overall Class C new business market under the challenging market conditions last year.
In terms of nationality, the majority of our new business (in terms of APE) in 2011 was coming from Hong Kong.
New businesses from Mainland customers came in second and has grown in 2011 compared with 2010.
Were your sales up in every region, or were there declines in some areas?
Our businesses are mainly from Hong Kong and offshore customers. The shares of new businesses in every territory have increased in 2011 compared with 2010.
How did the pattern of single premium and regular premium products vary?
The business model varies from region to region. For Hong Kong, regular premium products take up a larger part of our business with around 80%. This is also the general pattern of the whole investment-linked insurance market.
Are you planning to make any changes to your distribution channels?
We focus on delivering our investment-linked insurance product via IFAs only, but we are also looking for any suitable opportunities to expand distribution channels in the future, such as bank distribution. We are unlikely to build
up our own direct sales agent force.
Are you focusing on any particular regions in 2012?
We will continue to focus on the region we are operating in and looking for expansion in the expatriate market. We see Asia as the engine of growth. We will review our plan regularly to align with our business development.
What are your priorities in terms of the Standard Life product range this year?
We are working closely with fund managers and other third parties to explore the opportunity to launch renminbi (RMB) products. Normally, we have a new Class C product launched to the market every year subject to regulatory approval. We are striving to develop a Class C product that fits a wide group of customers.
Are there any areas in which Standard Life is deploying more resources, in terms of marketing or recruitment of more sales people?
We are continuously expanding our workforce in Hong Kong to align with business development strategy. We have recruited a sales person who specialises in the bancassurance area.
Currently, we have a strong sales team to cover different customer segments and channels. On the marketing side, we have recruited additional people in developing social media aiming to build more interaction with our customers and IFAs and deepen the customer/broker relationship.
What were the trends in terms of underlying fund selection by your clients?
We have 305 fund choices on our fund platform as of March 2012. The majority of our assets were equity funds in 2011, while fixed income funds came in second, which is consistent with the market.
What trends did you see in the traditional asset classes?
Equity funds were still the top choice for the majority of our customers, while the fixed income category also attracted more assets in 2011. Among equity funds, the China equity fund and emerging market funds are the popular fund choices in Hong Kong.
What other trends did you notice last year in terms of fund selection?
A higher proportion of total assets were allocated in the fixed income category in 2011 (around one-fifth) compared to 2010.
The proportion of total assets invested in equity funds has dropped in 2011 compared to 2010, but was still the most popular asset class invested by customers. The reasons for these may be, first, the drop in the equity market in 2011 that led to a decrease of equity assets under management (AUM); and second, investors becoming more risk averse generally in 2011.
Are investors returning to equities and becoming less risk averse generally?
Based on our statistics, we can see the proportion of total assets invested in fixed income has increased in 2011 compared to that of 2010.
Starting this year, we saw a noticeable trend that customer risk appetite has changed with more returning to equities. In the first three months, there have been more inflows to equity funds than fixed income funds.
