Insurance executive David Wong Tai-wai unwittingly threw himself into a business that was totally alien to what he had majored in. But, he tells Lin Wenjie he was ‘ignited’ by the challenges ahead.
FWD executive David Wong Tai-wai says the insurance group had set out as a pan-Asia insurer and its goal is to cover most Asian countries. (Photo by Roy Liu / China Daily)
When David Wong Tai-wai, chief executive officer of FWD Hong Kong and Macau, graduated from the University of Waterloo in Canada 30 years ago with a degree in computer science, he never imagined he would spend half his lifetime in the insurance business.
He had little understanding of what insurance was all about, but found himself “ignited” by the challenges the industry offers, such as analyzing insurance policy risk levels and the intricate issues concerning assets and liability. His computing background also gave him the impetus to steer the human-intensive industry into the digital era.
“Initially, I worked in the IT (information technology) unit of an insurance company. My goal was to achieve something in that field. Eventually, I found this complex and human-interactive business really interesting,” Wong tells China Daily.
Technology and mobile phones are changing customer behavior, as well as the way of doing business. Thus, it’s imperative that we develop insurtech in line with our aim of enhancing customer experience
David Wong Tai-wai, chief executive officer of FWD Hong Kong and Macau
Having started his career with Toronto-based finance services and insurance giant Manulife in the 1980s, Wong was transferred to Hong Kong in 1996 and held key management and leadership posts across Asia, including Malaysia, the Philippines, Thailand, Vietnam and Cambodia. He had taken up nearly 10 positions in three decades with Manulife before returning to Hong Kong in 2013 to become the first chief executive of the newly created FWD Hong Kong.
FWD Group — the insurance arm of investment group Pacific Century Group headed by Hong Kong tycoon Li Ka-shing’s younger son Richard Li Tzar-kai — now has its footprint across eight Asian markets — Hong Kong, Macao, Thailand, Indonesia, the Philippines, Singapore, Vietnam and Japan — offering policies like life and medical insurance, general insurance and employee benefits. It boasts more than 1.2 million customers and a staff strength exceeding 2,900.
On joining FWD, Wong set an ambitious goal for the group to be among Hong Kong’s top five life insurers within five years. He rolled out three key strategies focusing on insurtech (insurance tech), health solutions and customer experience.
FWD said earlier this year it would pump HK$500 million into developing proprietary insurtech solutions — more than five times the amount the company had poured into the sector in the past three years.
“Technology and mobile phones are changing customer behavior, as well as the way of doing business. Thus, it’s imperative that we develop insurtech in line with our aim of enhancing customer experience,” says Wong.
He stresses that young people, particularly the “mobile-dependent generation”, would rather use a digital platform to buy products nowadays instead of going to an agent while, on the services side, both the younger and older generations also prefer using multiple channels to communicate with customer services staff through mobile phones and digital platforms besides face-to-face encounters.
FWD started its commerce digital platform iFWD in mid-2015, enabling customers to purchase products and talk with staff online. For mobile services, the company has an app providing easy access to customers’ insurance policies, allowing them to view key data about their policies or make changes to it with the mobile device.
With the creation of iFWD, the group has emerged as the market leader in direct sales of life insurance products through digital platforms in Hong Kong. Statistics show that iFWD generated more than HK$140 million in annual premium equivalent (APE) last year. For general insurance, the platform raked in more than HK$5 million in new business premiums with over 40,000 policies underwritten.
FWD saw the value of its new businesses grow by 44 percent in 2016 to HK$1.13 billion, compared with the previous year, while the APE posted 36-percent growth to HK$2.63 billion.
However, FWD is not the only insurance company that has gone digital. Major competitors like pan-Asian life insurance group AIA, Paris-based AXA and Prudential have embraced insurtech.
So, what makes FWD different from its peers? Wong believes it’s the company’s culture.
“The key part is to create a culture that aligns with our strategies. For us, we encourage our employees to be different and innovative. We want them to feel fulfilled when making people’s lives a lot easier by using digital tools, so they’ll be keen to push through these strategies. We also advocate a win-win environment, with everyone in the company working and succeeding together.”
Wong says FWD had set out as a pan-Asia insurer and its goal is to cover most Asian countries. “So, any country with a big population will be among our top choices.”
To round it up, FWD has applied to the China Insurance Regulatory Commission for a life insurance license and is keeping its fingers crossed that the nod would be forthcoming.
A micro start for the poor in emerging markets
Apart from helming local insurer FWD Hong Kong, David Wong Tai-wai is dedicated to the development of micro-insurance in immature markets in Asia.
He serves as an advisor under the United Nations Development Program for ASEAN (the Association of Southeast Asian Nations) regulators on rural financial inclusion and micro-insurance development.
Wong has had a long relationship with member states of ASEAN since 2004 when his former employer Manulife dispatched him to establish a foothold in Southeast Asia, including Malaysia, Vietnam, Cambodia and the Philippines. His office in Hong Kong testifies to the relationship — its walls adorned with paintings by Cambodian and Vietnamese artists, depicting the exotic landscapes in these emerging countries.
He says while the insurance markets in Japan and Hong Kong are already in place, those in Cambodia, Burma and other developing countries are just opening up, with an infrastructure network that has yet to come on.
“In these countries, the city and rural areas have very different economies. The banks or insurance companies prefer to set up branches in the big cities instead of the countryside, so the distribution and payment channels in those poor areas are not ready yet. That’s the biggest problem. In such a situation, how to protect the low-income people against perils? Micro-insurance is what we want to push in these developing countries,” says Wong.
Micro-insurance refers to insurance with low premiums and coverage, usually targeting a population ignored by mainstream commercial and social insurance programs.
“Typically, the premium for micro-insurance is US$10 to US$20 annually, with coverage of US$1,000. But, due to the poor transportation system, insurance agents need to ride a motorbike for three days to go to the village, just to take that US$10 premium? That’s the distribution problem. On the payment side, as most of these places are still a cash society, companies need to hire collectors to get the money and even if there’s a bank, it will charge a US$1.5 handling fee for a US$20 transfer. The whole payment procedure just doesn’t work.”
Fortunately, with the development of digital technology, things will get much easier. Wong intends to promote online purchasing of insurance products and the use of digital wallets in those countries as his next step.
“The odds for success are much higher if we use the internet to promote financial inclusion because, even in Vietnam, 80 percent of the people in the rural areas use mobile phones. If digital wallets become popular, the selling and payment procedures would be far more effective and would be a very big help in terms of promoting financial inclusion and micro insurance.”
Although the digital revolution can bridge the gap between villagers and insurance, most villagers don’t even know what insurance is, so educating the local people has been Wong’s major task in the past few years.
“People in Southeast Asian countries are coming to understand the merits of insurance, and then we can build up the distribution and payment channels before starting to make an impact,” he says.
According to Wong, he has urged ASEAN governments to legalize the whole distribution procedure and regulate insurance companies, while agents need to get a license before they can sell insurance policies. As insurance is a regulated industry in every country, regulatory consistency with other markets is important to the domestic insurance market development.
Regulators in ASEAN countries have introduced regulations on many fronts. The Philippines will launch its new RBC (Risk-Based Capital)-2 framework next year and continue to synchronize its solvency regulations around risk-based capital frameworks that have been established in Europe, while Singapore, Malaysia, and several other countries already have regulations on cyber security, according to the 2017 Asia-Pacific insurance outlook report by London-based accounting firm Ernst & Young.
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