Richard Bates, CEO of AIA Cambodia, the largest life insurer in Asia, talks to Khmer Times’ May Kunmakara and discusses his company’s growth plans in the country, which include expanding beyond individual life insurance to offer products in more sophisticated sectors.
KT: Life insurance has been present in the Kingdom for over five years. How would you describe the evolution of the sector?
Mr Bates: The life insurance sector here in Cambodia is very vibrant and there are lots of opportunities. Cambodia is a fast growing economy with a young population. There is also a growing demand for healthcare and health services in the country. This is a perfect combination and makes a good mix for a robust life insurance industry. We entered the local market just over 12 months ago, and have been very successful so far. We are very excited about the way the life insurance industry is moving forward in the Kingdom.
KT: How aware are Cambodians of the importance of life insurance and what is generally their perception of this product?
Mr Bates: I think the life insurance market in Cambodia is following a journey typical of what we’ve seen in a lot of other Asian markets. In the first stage of development, people begin to understand the purpose and benefits of insurance in general, and then of life insurance specifically. Then they start to comprehend how we can help them and their families.
We have extensive experience in the market worldwide. AIA is a 99-year-old company and we turn 100 next year. Over the decades, we’ve learned to navigate the risks along the journey that any country has to go through in the path of development. The initial period is spent helping people understand the benefits of insurance. The faster people understand those benefits, the quicker they can take advantage of life insurance.
KT: How would you describe the competition that you’re facing in this small country?
Mr Bates: Life insurance in Cambodia is just five years old, so it’s still a fledgling market with few players.
KT: Can you tell us about your strategy for expansion in Cambodia?
Mr Bates: The successful strategies we have used in markets around the world will be applied here, which are all about helping people to live healthier, longer and better lives. The core of what we do is to protect people, to look after their families, and to make sure that everyone is in a strong financial position to weather a crisis if something happens to them, which includes ensuring that they are healthy, can stay healthy and avoid illness.
KT: Cambodians generally spend a lot on medicine and healthcare. What can AIA do to help them?
Mr Bates: I think you have highlighted a very good point. The life insurance industry doesn’t exist in a vacuum. It is dependent on many different industries, such as medical services. For example, we have a clinic inside our head office from one of our partner hospitals so that we can support our customers if they need to do a quick medical checkup and also to help them with the application process, if they have any claims. We can help them process their applications and claims very quickly.
At the same time, we also work with medical practitioners from our network of hospitals and clinics. We also work closely with the Insurance Association of Cambodia and the Insurance and Pension Division of the General Department of Financial Industry. We want to promote the creation of a very strong image and reputation for the industry that will benefit all players and stakeholders.
KT: What makes AIA different from other life insurance companies?
Mr Bates: There are a few key areas that we are focusing on based on our research and analysis on the needs of our customers. The two key findings from our research indicate that people pay attention to their financial stability and are concerned about their health. So we designed our products based on these two important factors.
AIA products help our customers with financial stability by having a savings element. More importantly, our products focus on protection. With our policies, clients are able to protect their family if something happens to them, by enabling them to have a stable income for their loved ones.
With regards to health issues, we recognise that most people only think of life insurance when something has happened to a family member and by then it is probably too late. We design our products so that the benefits can be realised earlier. This is why we included critical illness coverage for cancer and heart stroke, as well as lung, heart and liver diseases. The goal is to help people get better so that they can get back to work and earn a living. If, however, something happens and the person is not able to recover, we will make a payout immediately to the family.
Another crucial area that we pay close attention to is listening to our customers on how they want to be treated. Our customers want somebody who is going to be there all the time, so our sales staff has a full-time job. They are what we call full-time life planners.
KT: AIA has a long list of products and services in markets around the world. Are you planning to introduce all of them in the Cambodian market?
Mr Bates: What we have done here is to offer our core products. This will help people understand what life insurance does and how it can help them.
As we have done in other markets, we will eventually focus on the development of other parts of the industry. For instance, when it comes to the development of medical clinics, we see that it runs in tandem with the development of the country’s health industry. In the foreseeable future, fewer and fewer people will seek medical services outside Cambodia.
Likewise, we’ve also noticed that the financial market here is growing fast, with the introduction of a bond and an equity market, so we will also focus on this in the near future.
As we have seen in other countries, when developments happen at such a fast pace, we can develop insurance products for more sophisticated sectors, with risk protection at the centre of our offer, but with high returns.
We will look at other developed markets where we have sold our products successfully, and we will bring them here at some point when the market is ready. We will take best practices from other markets and we will implement them here, like we have been doing since we launched. We will continue to make sure that we are doing things right and that we are on the path of success.