EVER since the emergence of a new corporate management team at US-based John Hancock Life Insurance Malaysia (Bhd) in January 2001, timely changes have produced an unmistakable trend that continues till this day a consistent rise in the development and acquisition of new business.
In fact, over the past two years, the company has seen an 85% growth in new business, an achievement that has, among others, served as a vital incentive for agency productivity.
Khor Hock Seng, chief executive officer of the public-listed company, said in terms of Ringgit and sen, the 85% growth had meant that the company had increased its new business from RM27.2mil Annualised Premium Equivalent (APE) in FY2000 to RM51.5mil APE in FY2002.
Our agency force has been very supportive of the new programmes put in place over the past two years to spur growth and the results speak for themselves, he said in an interview.
(APE is the sum of 100% of annual premium sales and 10% of single premium sales used for the purpose of business comparison between life insurance companies).
With corporate governance already firmly established, the company hopes it would serve as the springboard for new programmes as newer growth targets are set in the coming years, Khor said.
He said new business expansion was not the only highlight of the company's FY2002 profile, as assets under management had also shown some significant growth.
For the FY2002 period ending Dec 31, assets under management grew from RM1.4bil to RM1.6bil, an increase of 14% on the back of strong premium growth.
On the progress of its three main distribution channels, Khor said bancassurance had grown by 507% from RM0.8mil in FY2001 to RM4mil in FY2002 with strong support from partner banks.
Ordinary Life Agency registered new business sales of nearly RM29mil APE, up 30% from FY2001 while the third channel Home Service Agency grew by 26%, reaching RM20mil APE.
On the market share enjoyed by John Hancock, the Australia-trained actuarial insurance executive said latest feedback showed the market penetration had managed to grow by 50% in a short span of two years.
This type of market share growth is significant, as in real monetary terms we have raised our new business sales by more than RM23mil since FY2000, he said.
Touching on the company's latest efforts to counter overall market uncertainties and worries over the declining equity sector, Khor said John Hancock had last week introduced a product unique to the life insurance industry Signature Elite Gold.
Signature Elite Gold is a regular premium capital guaranteed investment-linked package that provides investors a safety net for the capital while allowing for the opportunity to earn higher investment returns.
Last year, our marketing department conducted a study on the purchasing trend of our consumers when considering investment instruments. Given the uncertain economic and equity outlook coupled with the inherent cautiousness of investors during such times, investors were only prepared to part with their money if the investment instrument comes with some kind of guarantee for the capital, Khor said.
He said while single premium capital-guaranteed products were the norm, the company had decided to introduce a regular premium investment-linked version as the latter was less risky and furthermore provided a better income stream, Khor added.
(Single premiums are one-time payments to life insurance companies for the purchase of life insurance policies and do not require recurring premium payments by the respective participant unlike regular premium policies).
And the advantages of John Hancock's latest business product? Firstly, participants (policyholders) get back full capital invested, regardless of market conditions and secondly, while providing a safety net, participants also would be able to take part in the equity market and enjoy market-related benefits.
Thirdly, since this is a regular premium investment-linked product, it allows the participant to average out his investment risk over a longer period of time, say between 10-20 years, a sure way of minimising the downside on investment returns.
Khor said besides its business benefits, the new product was also set to contribute 30% of the company's new business for this year, all of which says a lot for a company that was also one of the fastest growing players in the market for FY2002.
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