Thursday 28 Mar 2024
By
main news image

PHILIP-SEAH-pw-01

The insurance industry has continued to evolve to meet the changing needs of consumers. In the first of a two-part series, Prudential Assurance Malaysia Bhd CEO Philip Seah talks about what the company has done to stay relevant in these challenging times. 
 


Philip Seah, CEO of Prudential Assurance Malaysia Bhd, has lived and breathed insurance for the last 37 years. Having worked in the group's various markets, he has had the opportunity to observe first-hand just how much the regional landscape has evolved over the years. 

His journey began in 1978 when a friend asked if he had thought of selling life insurance. Seah was 23 at the time, and had spent two years as a steward with Singapore Airlines.

Seah had been accepted into the National University of Singapore to study arts and social sciences after completing his National Service, but he dropped out because he wanted to read law instead, and joined the airline to save money. 

“I convinced my parents and grandmother that it was the right thing to do. They gave me their blessings, so I dropped out of university and joined the airline. As it turned out, I spent more money than I saved.

And it certainly wasn't enough for a university education,” he says. 

His career took a different path two years later following a conversation he had with a friend. They had been in a hotel lobby talking about their recent travels when Seah noticed that they were the only ones relaxing there. 

“We had just had a great time in Hawaii, so we were exchanging stories. It was then that I looked around the lobby and asked my friend, 'Has it occurred to you that we are the only ones here bumming around?' Everyone else seemed to have a sense of purpose. I was wondering whether life was passing us by.”

His friend then asked him if he had ever thought of selling life insurance, and whether he wanted to join Prudential. While Seah had not heard of the company at the time, he decided to become a part-time agent after he was introduced to his friend's manager.

“When I went for training [to sell insurance] and began to understand what life insurance was all about, I discovered that they call [it] pennies on the dollar — the premium [that one pays] is such a small deposit to make, yet the amount of coverage a person gets is so much. 

“Not only that. You get your money back plus interest if nothing happens [at maturity of the policy]. It was almost too good to be true. [Plus] I was actually starting a business without having to come up with capital.”

A part-time stint soon became a full-time career. Seah eventually worked his way up to agency leader. Later, he transitioned into management and became head of sales in 1990. 

He has held key posts within the group, such as deputy CEO of Prudential Philippines and CEO of Prudential Singapore. He was regional chief agency officer for two years before being appointed CEO of Prudential Malaysia in November 2012. 

As an industry veteran, Seah has observed how products and consumer behaviour have changed over the years. “In those days, the level of awareness and understanding of insurance was not [at the level] it is now. But there were also fewer agents and insurance companies. Today, more people are aware of insurance, but there are also more agents and companies. There is greater competition and more alternatives. 

“[Back then,] an insurance policy used to be purchased purely for life and then medical protection. Now, people also turn to insurance for their investment and savings needs. As Malaysians become more financially savvy, their financial needs become more sophisticated, and the insurance industry has been evolving to meet those needs.”

Being product innovators, Prudential (which has been in Malaysia for 91 years) has created a number of products to meet the changing needs. In fact, according to Seah, it was the first company in Singapore to come up with investment-linked insurance policies in 1979.

“At the time, the other companies and agents were saying it was the wrong product to sell and [consumers] would lose money if they bought those kinds of products. They were thinking of stocks and thought it was speculation. 

“But truth be told, many companies couldn't do what we were doing because they didn't have a system for it. But we were able to come up with a system so that we could sell investment-linked policies.”

However, he admits that there is a limit to how much innovation can be done. What is more important is to come up with products that fulfil the needs of consumers.

“There comes a point where there are so many things you can do with a product. Anything else you try just to be innovative is just one more bell and whistle. We don't want to cost something in unless it is something people need,” Seah says.

This year, the insurance industry is facing challenging times amid an uncertain global economic outlook and a weak local currency. Low global interest rates, especially in Europe and the US, have reduced the investment income and profit margins of many insurance players. Nevertheless, Seah is confident the industry will ride out the challenges just like it had in the past.

“The first thing we need to remember is that life insurance takes a long-term view. All the things mentioned are cyclical. It wasn't that long ago we were talking about the great economic recession. It felt like it was never-ending. I went through those periods and I remember it was as though it was pitch dark and I was sliding down a hill and didn't know where the end was. But it ended.

“Prudential went through that period very successfully. Not only did we manage through it, we actually strengthened because of our good corporate governance — how we maintained our finances, resources and assets. We have gone through all these cycles, all these recessions.”

On the weak ringgit, Seah says it will not affect customers. Instead, they should view it as a good opportunity to buy some products at lower prices.

“It is weak [only] in relation to another currency. All the premiums customers are paying for is in ringgit. Therefore, by itself, this is not an issue,” he says. 

“For savvy people who buy investment-linked policies, they understand that they are actually buying products at a discount because the premium buys more units, as each unit might be [priced] lower. In terms of dollar cost averaging, they are benefiting from it. The good thing about insurance is that you basically have protection that includes medical, savings and investments.”
 

This article first appeared in Personal Wealth, The Edge Malaysia Weekly, on April 20 - 26, 2015.

 

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's AppStore and Androids' Google Play.

      Print
      Text Size
      Share