TRANSFORMATION

Excerpt from The Star, 23rd June 2009


Tuesday June 23, 2009

Changes to spur insurers’ revenue
BY DALJIT DHESI


‘Transformation’ of agents will protect consumers’ interest

PETALING JAYA: The changes that the insurance sector is going through may help boost its revenue and productivity and enhance the concept of need-based selling, industry players said

The move is in line with Bank Negara’s call to enhance professionalism in the industry and safeguard customers’ interest, they added.

The exercise involves the “transformation” of agents into professional wealth planners who will also sell products like unit trusts and takaful and offer will-writing services apart from selling insurance.


Prudential Assurance Malaysia Bhd chief agency officer Lai Leong Pin said since embarking on an agency transformation exercise last year, the company had converted about 1,800 agents to wealth planners from a total agency force of about 9,000.

“This year, we plan to train an additional 1,800 to 2,000 agents to become wealth planners. In the next five years, we expect to transform between 40% and 50% of our total agency force into wealth planners,” he said in interview.

“Besides boosting the company’s revenue, these professionals will also enhance the productivity of the agency force. Last year, our agency’s average productivity was among the highest in the industry, with about RM69,000 in first year new business premiums.’’

To be qualified as Prudential wealth planners, Lai said an agent must be productive, have met various licensing requirements and undergo external or intensive in-house training.

The in-house training provided by its PRUbusiness academy covers wide-ranging modules that include introduction to wealth planning concepts, products and technicalities and personal effectiveness.

For external programmes, the candidate must have sat for the Registered Financial Planner or Certified Financial Planner examinations. In terms of productivity, the agent must bring in new business premiums worth at least RM200,000 annually.

Meanwhile, Great Eastern Life Assurance (M) Bhd is targeting to have at least 3,000 Life Planning Advisors (LPAs), similar to the wealth planner concept, by 2010.


Its director and CEO Koh Yaw Hui said since launching the LPA programme in December 2006, the company had 600 agents certified as LPAs as of last year.

“The programme is one of the key pillars of the Agency Transformation Project. As such, we are investing substantially to ensure that the professionalism and productivity of our agency force is elevated.

“This is also in line with Bank Negara’s call for higher professionalism from agency force in conducting their business to ensure that consumers’ interests are constantly being looked after,’’ he said.

According to Koh, the LPAs are trained to serve the clients’ financial needs in the core areas of protection, savings/investment, education, and retirement.

Going forward, he said LPAs would be trained under the Great Eastern Life Planning Advisory Service Centre to provide them with comprehensive financial solutions in estate planning services, will writing, unit trusts and tax consultation to penetrate high net worth clientele base.

This would allow them to become full-fledged multiple financial service providers within the next one year or so, he said.

Manulife Holdings Bhd group CEO Michael Chan said he expected 300 of the company’s total agency force of 1,500 to be certified as wealth planners by year-end.

The certified wealth planners were projected to constitute 50% of its agency force by 2010, he added.

“It is estimated that only 15% of agents in the industry are familiar with selling wealth management products. Therefore, proper training is required for an agent to obtain a licence and understand the financial planning process.

“We have a dedicated centre to train and ‘transform’ our agents into wealth planners,’’ Chan said.