Reforms, rogue agents on agenda of insurers' chief
Agnes Koon faces busy year as federation's first chairwoman
Wearing four-inch heels and a white skirt may not be the most appropriate dress code to inspect a factory. But that was how Agnes Koon Woo Kam-oi began her first day in the industry more than two decades ago.
The first chairwoman of the Hong Kong Federation of Insurers since the federation was established in 1988, Ms Koon admitted it took a long time for women to crack the glass ceiling and reach top executive positions in the sector.
The veteran insurer faces a hectic time during her 12-month term, which started in May.
Chief among her challenges will be negotiating with the government over the role medical insurers will play in health-care reforms and working to prevent agents misleading clients.
She will also need to deal with government plans to let the Insurance Authority run as an independent body, much like the Securities and Futures Commission, and if a compensation fund should be set up against the risk of insurers going bankrupt.
Her full-time job is as chief operating officer of Falcon Insurance (Hong Kong), a general insurer of property and casualty insurance. She has served on the General Insurance Council since 2003 and was the chairman in 2006. Before joining Falcon, she had overseas postings, including stints with Jardine Matheson in Taipei and Continental Insurance Australia.
She graduated from the University of Hong Kong with a Bachelor of Social Science, is a Chartered Insurer and an Associate of the Chartered Insurance Institute. The mother of two sons is also active in the community, having served as vice-president of the Zonta Club of Kowloon and as vice-president of the Hong Kong Women Professionals and Entrepreneurs Association.
Her husband, a businessman, has no complaints about her busy schedule because as she explains 'we are both workaholics'.
Why did it take 20 years to see a woman head the insurance sector?
There are in fact more females working in the insurance industry than males, but I must admit that it is only in recent years that we have seen more women promoted to senior management.
Do female executives have more opportunities now than when you joined the industry?
Yes. Back in the 1980s, a female colleague of mine was the first woman qualified to become an Associate of the Chartered Insurance Institute - a top qualification in the industry. She then applied to join the Hong Kong Insurers Club, which until then had no female members. After getting support from her company and some negotiations, she became a member.
It was a process of evolution and the industry began to accept more women to top posts. Now more women contribute to the industry and many of them are very successful top executives, especially in sales and distribution.
How have the life insurance and general insurance sectors performed recently?
Life insurance grew 31 per cent last year, with total premium income of HK$176 billion for in-force business and new business expanding to HK$81 billion. General insurance grew 4.8 per cent to HK$24 billion.
Will volatile global markets have any impact on insurance companies in Hong Kong? For example, does it make the sale of investment-linked insurance products difficult?
There has been a downgrade of some bonds held by insurers, which has affected those holding a high percentage of equities or mortgage-back debt securities. The Insurance Authority is closely monitoring insurance firms and would ask some to increase capital when needed.
We have not yet seen a huge impact on sales of investment-linked policies as many people have accepted the idea of buying insurance products as an investment. However, we expect some consumers will consider looking for traditional policies, which offer guaranteed returns.
There are complaints some insurance agents are misleading clients about investment returns or the provisions of their policies. What will the HKFI do to help crack down on such malpractices?
The Insurance Agent Registration Board is looking into it. We had 22 complaints in the first half of the year against alleged mis-selling of investment-linked products out of a total of 785 cases. The HKFI is concerned that policyholders are not well-informed about their investment-linked policies and we will issue a pamphlet, explaining their nature.
Do you agree the Insurance Authority should become an independent body? The government first considered the proposal 10 years ago, so why has it taken so long?
In most other jurisdictions, insurance regulators run independently of the government. Hong Kong may have to follow this trend, but the HKFI is concerned that the authority has very tight human and financial resources so it is a question of finance after it becomes independent.
What do you think about the call for Hong Kong to set up a compensation fund in case insurance companies go bankrupt? Do you think policyholders here receive less protection than those in other countries as we do not have this safety net?
Hong Kong has two compensation funds protecting people against insurance companies becoming insolvent - one is for motor insurance and the other is for employees' compensation insurance that pays worker injury.
We are still studying whether another compensation fund is needed. But we have to look at overseas examples.
In Japan, an insurance compensation fund did not work as well as the public expected. When several insurance firms went bankrupt, the fund was insufficient and it needed government intervention.
Also, if we have to set up a new compensation fund, some of the cost may be passed on to policyholders or there may be a need to collect a separate levy from policyholders.
What is your view on the government's medical reform plan that could involve a mandatory health insurance scheme?
The HKFI hopes the industry can play a role in the reform. In many overseas markets, insurance companies are an important element and may provide some sort of mandatory scheme to give basic medical insurance coverage, with a minimum of exclusions.
Some policyholders complain they cannot get medical insurance cover after an operation because insurers consider them high risk. Are insurance firms more interested in profits rather than the needs of patients?
In fact, policyholders will be better protected when you have mandatory insurance cover. This is because you will have a bigger pool of policyholders, the pricing will be lower, the protection for all policyholders will be better and there will be fewer exclusions.
Policyholders who complain that they cannot seek claims have not purchased enough protection. We have to educate them to understand the policies and to prevent agents from mis-selling to clients.
Do you agree that Mandatory Provident Fund providers, many of them insurance companies, should reduce their fees?
Many MPF providers have already cut some fees. Many have had to pay for initial set-up costs so the initial fees will be higher. But we have seen providers cut fees as schemes began to run more smoothly.
Why did you become an insurer?
I was involved in another business but found it interesting that in order to become an insurance company, you have to have knowledge of the procedures of how a factory or business operates before you could price the policies and decide the exclusions and terms.
I remembered the first day I joined the industry. I was wearing four-inch heels and a white skirt but did not realise my first assignment was a site inspection of a dyeing factory in Tsuen Wan. The job required me to walk down from the 12th floor to inspect the plant floor by floor, where there was a lot of heat and water generated in the manufacturing process. That was a good learning experience.
You have worked in Taipei, Hong Kong and Australia, how do you compare these different markets? What is your view on the mainland insurance market?
The Australian insurance market is very advanced and mature so almost everyone has life and property insurance coverage and the penetration rate is high.
The Taiwan market penetration rate is good, too.
The Hong Kong life insurance market has had good growth in recent years but the penetration rate is still low, so there is still room for growth.
On the mainland, the market is huge for both life and general insurance. Many local manufacturing plants have moved north and need insurance coverage. The future growth rate of the industry is huge there.
You have been busy with your work and public duties. Does your husband complain?
No, because we are both workaholics and we both want to advance our careers.
Do you have a lot of insurance policies and have you ever failed to receive a claim on your policy?
I believe in the concept of insurance so I have many life policies, covering home contents, mortgage, domestic helpers and liability. I also have insurance cover for my car and annual travel.
I have not experienced difficulties in claims because I carefully choose the insurer and look at their credit rating, claims and settlement record.