Admittedly, Ageas is not, for the moment at least, as identifiable a global insurance brand as certain others. But then, the name is less than three years old. The Prudential name, by comparison, dates back to 1848, while “Metropolitan Life” was in use as long ago as the 1860s.
Company officials are said to have chosen the Ageas name in 2010 to reflect the business’s Benelux roots (the ‘Ag’ is a nod to the firm’s Belgian life insurer ancestor Assurances Générales, founded in 1824) while also containing the letters ‘e’ and ‘a’, which they thought nicely sympbolised the company’s two key markets (Europe and Asia).
Perhaps most importantly, Ageas is a lot easier to say – and advertise to consumers – than “the entity formerly known as the bailed-out Benelux insurer Fortis”, which is what the company was three years ago, when the Ageas name was chosen.
Today, the €21.3bn, Euronext-listed company is flourishing in a number of markets, including Hong Kong, where it has been headed up since 2006 by regional chief executive Stuart Fraser.
Here, Fraser discusses how Ageas (pronounced by most native British-English-speakers as “ah-gee-as”, and known to many Hong Kong clients by its Cantonese equivalent, Futong Boheme), has been gaining market share in Asia, helped by its ability to be more responsive to clients and market conditions than some of its larger rivals.
Briefly, what is the origin of Ageas Hong Kong?
Fortis acquired what is now known as Ageas Insurance Company (Asia) Ltd in 2006 from the Hong Kong conglomerate known as Pacific Century Regional Developments, founded and run by Richard Li, a well-known local businessman and philanthropist.
This occurred right before the turmoil of 2007, which saw the subsequent break-up of Fortis, and a period of uncertainty about our future.
Fortunately, our key management and agency personnel stayed on throughout that period, and we have emerged much stronger than we were before.
Currently we have more than 2,800 agents, who cover Southeast Asia out of our base in Hong Kong.
What types of end-use clients does Ageas Hong Kong target?
This is to a large extent driven by our distribution. Our IFA channel enables us to reach middle to senior management and professionals, who are generally in the mid- to high-income groups.
As for our agency distribution, which last year accounted for around 75% of sales, it is increasingly moving away from a “bluish collar” client toward a diverse range of clients, who increasingly resemble those of our IFAs.
Expatriates account for less than 3% of our market. Although we may be a European insurer, here in Asia, we are essentially a local company, looking after, mainly, Hong Kong Chinese clients.
We have other clients in the region too, such as Japanese nationals, and we have an increasing percentage of the mainland Chinese market.
Do you expect to make any changes, or see any changes made, to your distribution model in the next few years?
No radical changes, although we plan to keep a close eye on possible opportunities that may come along, such as new banking partners and distribution models.
I think the agency model needs to adapt to its changing environment, and we need to facilitate this. However, I do see the agency and IFA channels remaining advisor-based, whereas bancassurance will remain transactional.
We are currently in the top five in Hong Kong in the non-bank space, and we plan to strengthen our competitive edge by recruiting from within.
We are also looking to be in the top five in the IFA sector.
What is the breakdown in your sales between unit-linked and traditional insurance products?
It’s currently around 50/50. Protection products represent more than 20% of our portfolio.
Where are you seeing the strongest sales this year (2013)?
Both channels are performing above budget, and our portfolio breakdown is similar to 2012. We remain among the leaders in the Capital Immigration Entry Scheme Proposition, which is used by foreign nationals to secure residency in Hong Kong.
We might see a shift to more unit-linked business, if stock markets continue to post positive gains.
What if any significant trends have you noticed in recent months, in terms of underlying fund selection?
Prior to the economic crisis, our customers were very keen on Asian equities, especially Chinese, or those invested in China. However, as the global economic crisis evolved into a euro-crisis, customers switched to lower-risk funds – particularly bonds and similar fixed-income securities.
In the fourth quarter of 2012 we saw a significant move into equity funds, and this trend has continued into 2013.
Do you use platforms?
Our ‘platform’ is the customer portal on our website. A customer can come into that portal at any time, look at their policy information, change such account details as their address and so on, and they can make changes to their account, such as moving from one unit-linked fund to another.
One area we are particularly proud of is our “iP technology” – applications that enable our clients to compute, for example, how much they would have to save every month now, in order to be able to retire in such-and-such a year with a lump sum of X.
Or, what they can expect to pay in school fees, based on the current age of their child, or whether they have a protection shortfall in their insurance coverage. All of these can be found through Apple, but they are branded Ageas.
How are the growing regulations in the financial services industry affecting your company and its business?
Increasing regulations are increasing the costs of doing business, for us as well as our competitors. Are they shaping sales trends? Thus far I would say the impact has been minimal, but several initiatives are being considered, with respect to insurance-linked assurance schemes, which could impact sales, but it is too early to know to what extent.
Who are Ageas Hong Kong’s main competitors, and how does it differentiate itself from them?
Our main competitors are those that operate in the same distribution channels we do – AIA, Axa, Manulife and Prudential. Being smaller than they are, we aim to be more responsive and quicker, and we seek to build strategic partnerships with our key stakeholders.
Which markets, outside of Hong Kong, have the most potential for your operation?
Obviously, the market with the most potential for us is the giant on our doorstep – China.
I envisage the barriers to doing business there, especially in the adjacent provinces such as Guangdong, will become more relaxed. It is a massive untapped market for insurance companies, with increasing wealth in all its socio-economic categories.
Looking ahead, what are Ageas Hong Kong’s priorities?
Our priorities are:
- Continuing to post strong growth, with a focus on value creation;
- Maintaining our top five position in the agency channel, with more than 3,000 professional agents
- Becoming a top five player in Hong Kong’s IFA channel
- Continuing to respond to our customers’ wealth management needs with innovative products; and
- Reinforcing what I call our “Martini customer service proposition”: “anytime, anywhere, any place”.