Singapore may be a tough market, but it still has a lot of potential for insurers, noted AIA Singapore's new chief executive Patrick Teow, at his first results briefing yesterday.
"People are living longer, life expectancy can go to 80 or 90 years old... when you look at these factors, with the middle class coming up, I think Singapore is challenging but there are a lot of opportunities.
"You've got to find it, and educate people," said Mr Teow.
AIA Singapore reported a 24 per cent jump in the value of new business to US$341 million (S$478 million) for the full year. Annualised new premiums, a measure of business activity, for the 12 months to Nov 30, expanded 5 per cent to US$471 million from a year ago.
New business margin, or the value of new business as a percentage of annualised new premiums, grew to 72.4 per cent.
Operating profit after tax rose 9 per cent to US$430 million, compared with a year ago. The firm said growth rates for the Singapore business are on constant exchange rates, unless otherwise stated.
When asked about the protection product space being saturated and the need for more retirement solutions, Mr Teow disagreed. "People always think they are well-covered, in reality they are not. The protection gap across Asia is something to the tune of US$50 trillion, and in the protection and savings space, that gap could be US$100 trillion."
He said the same goes for Singapore, where income is rising and people are leading better lives that also come with more liabilities, but the gap remains.
Mr Teow noted that feedback from the Government to insurers was that they are not selling enough protection products to meet the needs of Singaporeans, and AIA Singapore is working hard on that front.
AIA Singapore, which has some 4,200 agents, reported that each month 75 per cent of its agents are active, which is one measurement of good productivity. Mr Teow said he wants to bring that up to 80 per cent each month, which is much higher than the 20 to 30 per cent ratio in emerging countries.
The increasing productivity of the agency force, which contributes 60 per cent to the business, is also one of the factors behind AIA Singapore's solid results.
The insurer also introduced a digital underwriter last October, which brings the medical underwriting process down from three days to just five minutes.
Other innovative ideas include its AIA Vitality wellness programme, which started in 2013, where policyholders get incentives as they get healthier, and 43 per cent of the growth of the value of new business is AIA Vitality-linked.
Mr Teow also plans to increase AIA Singapore's share in the savings product space, especially this year, even if the margins are lower than protection products.
He noted that insurers that have strong bancassurance tie-ups tend to sell more savings products.
"Our relationship with Citi is strengthening, so slowly but surely we'll get into that space, but we also want the agency, which has been very good in the protection space," added Mr Teow.
"We still have to get into that area because we cannot be a one-trick pony, and it's good to be balanced especially in today's landscape. It's about financial planning, not just... selling a product."
Correction note: A previous version of the story stated that 43 per cent of the value of new business is AIA Vitality-linked. This is incorrect and has been changed to: 43 per cent of the growth of the value of new business is AIA Vitality-linked.