Brewing unhappiness at Prudential even before defection, defence says

The court heard yesterday in the lawsuit between Prudential Assurance Company Singapore and its former top agency manager Peter Tan Shou Yi that more than 300 agency leaders had written a strongly worded e-mail to Prudential group chief executive Mik
The court heard yesterday in the lawsuit between Prudential Assurance Company Singapore and its former top agency manager Peter Tan Shou Yi that more than 300 agency leaders had written a strongly worded e-mail to Prudential group chief executive Mike Wells expressing "extreme disappointment" with the Singapore firm's then CEO Philip Seah.ST FILE PHOTO

There was brewing unhappiness with Mr Philip Seah, former chief executive of Prudential Assurance Company Singapore, just months into his appointment with the life insurer and shortly before 244 agents and agency leaders defected from it, the High Court heard yesterday.

In one instance, more than 300 agency leaders in Singapore wrote a strongly worded e-mail to Prudential group chief executive Mike Wells expressing "extreme disappointment" with Mr Seah, said Senior Counsel Thio Shen Yi of TSMP Law Corporation.

It was the first day that Mr Seah, who is now retired, took to the stand in an ongoing lawsuit between Prudential and its former top agency manager Peter Tan Shou Yi.

Mr Tan is being sued for up to $2.5 billion for allegedly instigating the defection to rival insurer Aviva Financial Advisers in mid-2016.

Prudential claims he breached contractual and fiduciary duties by poaching the agents while he was still with the company.

But Mr Tan contends that there was already discontentment among the agents. Many were unhappy with Mr Seah, who became chief executive in December 2015 and left the role in November 2016.

Citing a 2016 e-mail by Prudence, a network of agency leaders, Mr Thio said Mr Seah "managed to alienate the entire sales force with his high-handedness, especially in unilaterally removing long-established incentives without prior consultation".

 
 
 

This, said the e-mail, dampened morale and would likely hurt staff productivity and retention.

Mr Seah replied that the incentives were restructured, not removed, and not all of this was done without consultation.

Agency leaders also took issue with cuts in benefits that fell hardest on core performers, adding that a shareholding scheme implemented five years ago for top agents and agency leaders was terminated as well.

Mr Seah told the court that he believed some changes had been discussed before he became chief executive and should not have come as a total surprise.

Agency leaders also said that while Prudential cut perks, rival firms like AIA extended theirs.

They questioned the benefits of cost-cutting and said the firm could "look forward to a bloodbath if the chief executive continues with his authoritarian leadership style".

While Mr Seah earlier told the court that he did not have a cost-cutting mandate, he noted there were some cost overruns he was to look into and eventually acknowledged that the letter was a clear indication that Prudence was unhappy.

He disagreed, however, that this meant the entire agency force was unhappy. This is because agency leaders were unlikely to demoralise their agents further by communicating negative messages that would affect them and their sales figures.

 

Another point of discontent were rumours that Prudential would be selling products through independent financial advisory firms and brokers. This was quashed, after it caused unhappiness among agents.

Defence lawyers yesterday also cast doubt on the losses that Prudential claimed. Mr Thio argued that there were units under the Peter Tan Organisation (PTO) - where the defecting agents were from - who worked independently of Mr Tan and did not use PTO's resources. While Mr Thio suggested these units would not be affected by Mr Tan's departure, Mr Seah disputed this, saying he still had influence over the agents.

Although Mr Thio pointed out that some claims of losses involved agents who did not leave Prudential for Aviva, Mr Seah said Mr Tan, in persuading agents to jump ship with him, could still have influenced others to leave.

Prudential also did not appear to have taken steps to replace PTO agents it lost in 2016 as well, said Mr Thio.

A version of this article appeared in the print edition of The Straits Times on July 31, 2019, with the headline 'Brewing unhappiness at Prudential even before defection, defence says'. Print Edition | Subscribe