National Mutual to fight off new rival
NATIONAL Mutual Asia plans a two-pronged approach to fight off a rival insurance group believed to have poached its former managing director Andrew Yang.
The company is fighting off a growing crisis of confidence among its agents and shareholders after the departure of Mr Yang last week.
Shares in the company slumped further yesterday, down 35 cents to $4.95, its lowest level since October last year.
Turnover was also heavy, worth $225.82 million as 43.68 million shares changed hands.
The two-pronged plan involves threatening to fire senior staff who attended a recruitment meeting by NZI Life, which could effectively disbar them from practising as insurance agents in Hong Kong under the Code of Practice of the Federation of Insurers.
It will also offer senior employees who stick with the company a loyalty package for long-term commitment.
''The scheme will reward long-term loyalty by senior staff, it won't just be a hand-out,'' said John Snelgrove, National Mutual general manager.
While the Hong Kong Federation of Insurers said it had ruled out any form of disciplinary action against Mr Yang, other senior staff could be barred under part of the code of practice.
Senior National staff are said to have attended a recruitment meeting held by NZI Life.
Mr Snelgrove said attending would be enough grounds for the company to sack staff.
''If employees are not working for the benefit of the company, we can terminate contracts,'' he said.
At that point, the case would become a matter for the federation.
According to the federation's code, any agent who has ''had his agency agreement terminated by reason of a breach of agreement within the preceding three years'' is disbarred from acting as an agent.
As Mr Yang was an executive and not an agent the clause would probably not apply to him.
There are 40 branch managers at National and so far only 25 have committed to stay with National, according to Mr Snelgrove.
The 40 branch managers are at the top of chain which stretches through 400 unit managers to 3,300 agents and managers.
According to Bloomberg, Mr Yang is believed to be joining the company which hosted the Saturday meeting, New Zealand Life (Bermuda), a company which was owned by General Accident until November last year.
It was then bought out by Summa Investments, a Singapore-listed company owned 50-50 by Ceroilfood, the Chinese state food-trading giant, and Seapower Resources, in which Li Ka-shing has a substantial stake.