What is the key focus of your new role?
The role has four key focuses. The first is global business development. Investors Trust has always had a strong market position in Latin America, but my role is to generate new distribution outside Latin America, with particular focus over the next few years on Asia, the Middle East and Eastern Europe. This will involve the recruitment, development and leadership of a team in these three regions. The company is committed to supporting the IFA channel and has no intention to set up a direct channel.
The second focus is public relations and business community liaison. I will represent the company in the many segments of the international business community, including regulators, service providers, fund management companies, as well as public relations and the media.
The third focus is acting as the Association of International Life Offices (AILO) representative. I am currently the deputy chair of AILO and represent Investors Trust on many of its committees.
Lastly, I am a board member, which enables me to use my experience, both of the company, and of the industry as a whole.
What are the advantages and challenges of working for a registered Cayman Islands insurer?
The advantage as a director is that I have to attend a board meeting there four times a year! The Cayman Islands are one of the most important financial centres in the world. It is the fifth largest banking centre, with a Moody’s AA3 rating, and classed by Standard and Poor’s and AM Best as a CRT-2 country, meaning it has low economic, political and financial stability risk. It is a British dependency, and has English common law and tax neutrality, and its regulator is the Cayman Islands Monetary Authority. These characteristics give it a very similar feel to other jurisdictions used by the European-based international life companies.
The challenge for us is that there are less companies using this jurisdiction, and therefore a need to educate potential distribution partners about its strengths, security and size in both insurance and banking.
Where are you seeing the strongest sales this year both in terms of region and products?
In Latin America our strongest sales are from Brazil, Argentina, Venezuela and Mexico. In Asia, sales have begun to build in north Asian countries and we expect that to continue as we build our resources in the region from our Hong Kong Representative Office.
In southeast Asia we have only just begun selling since receiving a licence from Labuan. Prospects look good and we open a new office in Kuala Lumpur in October.
Our strongest product sales have been in our Fixed Income Portfolio, a capital protected fixed income investment with an above market income stream. Sales during Q2 2012 were 35% higher than Q1 2012, and 44% up year on year. This is to be expected, with many investors becoming more cautious in the current climate and looking for regular income. Regular and single premiums have sold in equal volumes, followed by our S&P 500 product, another capital-protected structure which gives investors downside protection with equity exposure. During volatile times in the markets, both product families, the Fixed Income Portfolio and the S&P 500, have proven to be very popular among our introducers, since it allows them to continue making sales when investors are very risk averse.
Why Labuan and Malaysia?
We researched obtaining licences throughout Asia but felt Labuan and Malaysia were a good fit for our strategy. This does not rule out obtaining further licences in the future in the region.
Malaysia was our first choice, as the country itself is growing economically, has a sound regulatory framework, a solid base of both local and expatriate IFAs, is cost-effective for our branch infrastructure, and has quality staff. It will also be an ideal hub to serve southeast Asia, and complement our rep office in Hong Kong that serves as a hub for north Asia.
Are there any areas where sales have fallen this year?
We have seen sales fall in regions where the regulators have made it difficult to sell offshore investment products, through changes in legislation such as has happened in Argentina and Taiwan. This has made many distributors review their business model, and impacted sales. Elsewhere sales are up, but in many countries from a low base, as we have only recently entered the markets.
How does Investors Trust differentiate from its competitors?
I think our USPs are our products, our IT platform, and our commission payment.
To expand on each: our products are all keenly priced for the customer, including low annual management charges and policy fees, no bid offer spread or credit card charges, plus low minimum premium and top up levels. [image_library_tag 317431b8-9235-4ab0-997d-4414efa90902 350×242 ?width=350&height=232″ style=”width: 350px; height: 232px; border-width: 10px; border-style: solid; border-color: rgb(255, 255, 255); float: right;” alt=”” ]
We have a wide product range, as well as unit-linked regular and single premium plans. We also have a fixed income portfolio, with fixed and variable rates and an S&P 500 Index product with principal protection.
Our IT platform is, I believe, the best in the market currently. For clients, they are able to monitor their investment portfolio, view annual statements, make online payments, submit service requests and switch funds. Our business partners can see all their client details, view outstanding requirements, switch funds on behalf of their clients, and review commissions.
As well as this, they have access to the Morningstar Portfolio X-Ray Tool which can produce client reports in printed (not that we approve this format being a green company) or pdf format. To support new business, we have an online illustration system and application form for all products, so no paper is required whatsoever. And finally, we have our client and business partner website in six different languages – English, simplified Chinese, traditional Chinese, Japanese, Spanish and Portuguese (and this is backed-up with call centre support in all languages from our service points in Hong Kong, Kuala Lumpur, and Montevideo). Put simply the IT platform helps us be easy to do business with.
Our final USP is our commission payment. There has been much written in recent times about the impact of paying indemnified initial commission. At Investors Trust we do not pay indemnified initial commission on our regular products, but pay initial commissions as earned on a weekly basis over a five-year period. We also pay an asset-based bonus to reward loyal business partners as part of our strategy to encourage the building of sustainable profitable growth.
What regions of the world have the most potential?
Our strategy is to grow our market share in Latin America, Asia, the Middle East, Africa and Eastern Europe and I do see these as regions with potential, especially compared to the more developed regions of Western Europe, North America, and Australia for example.
Africa is of interest to Investors Trust because many of the countries within the continent are developing quickly but are not the focus of many of our competitors, and so the IFAs there have a limited choice of providers and products. We believe we can fill this gap and that our proposition is perfect for the region. We did some on-the-ground research earlier this year to confirm our thoughts and were pleased with the response from those we met. We will look to develop a new product for the region and consider white labeling too.
What are the biggest opportunities for the sector post-RDR and generally in terms of regulatory change around the world?
The current regulatory driver is the improvement in the standards of financial advisers. This is a keystone of RDR in the UK, FAIR in Singapore and the recent announcement from the Insurance Authority in the UAE. We have also seen the same in Labuan, Malaysia. I do believe this is a positive move by global regulators, as it should deter those not interested in financial planning as a career and give clients better advice, more appropriate products and greater respect for the industry as a whole.
Looking ahead, what are Investors Trust’s priorities?
Investors Trust’s priorities going forward will be to build a sustainable business in the regions it sees as having potential for the future. To do this, it will need to build on our new branch in Kuala Lumpur and utilise our Labuan licence (we are one of only two providers licenced in Labuan) and then move on to do the same in the Middle East, probably through the DIFC. On the product front, we need to continue to provide products that are innovative and built for the needs of customers in the future.
On our workbench currently are further capital protected products (adding to our current suite), a personalised portfolio bond, a single premium costed regular plan, and a capital redemption version of our popular regular plan.
The continued development of our platform is paramount to our success, and therefore as well as continued enhancements to the platform itself, to make us easy to do business with, we are building on our mobile technology. We already have easy-to -access real-time information for mobile phones and ipads via the web but will shortly launch Apple and Android applications. It is certainly an exciting time for us at Investors Trust.
