Tay Keng Puang, managing director and chief executive of MassMutual Asia, places great emphasis on training his 2,300 agents, to encourage sales and prevent mis-selling.
This may explain why his company, a mid-tier life insurance company in Hong Kong, has been able to achieve double-digit growth every year since he became chief executive in 2009.
Tay, a Malaysian Chinese born in Johore, opted to join the insurance industry after he finished his university degree in Britain. A love of numbers and statistics led to a job at AIA Malaysia in 1980, working in its technology department, before he was sent to Hong Kong in 1983 to work on IT operations in the Asia region.
In 1989, he joined Cigna, working on IT and customer backup services. In 1996, he joined MassMutual Asia to help set up its IT department and then prepare for the launch of the firm's Mandatory Provident Fund business when the pension scheme started in 2000. He was promoted to his current role in 2009.
Tay talked to the South China Morning Post about how to manage a company that relies on a huge team of agents to sell life and pension policies.
How do you manage asales force with 2,300 agents?
Training is of utmost importance. We provide training courses to make sure our agents have the knowledge about the products and have the sales and marketing skills. We also offer internship programmes for some university students to let them understand how an insurance company works. Some of them like the industry and became our agents after graduation.
We could not be a successful company if we only ask people to sell products while not giving them any support. This is why training is important. In addition, we also provide them with technological backup such as computer tools to help them to explain to customers about the products' features.
How do you encourage your agents to sell but at the same time preventmis-selling?
We require managers to monitor the sales pattern of the agents to check on any unusual sales patterns. For example, if an agent usually only sells some simple products but suddenly he or she is selling a lot of sophisticated investment products, we need to check on whether the agents understand the products and whether they have clearly explained to the policyholders about the risks involved. We also ask customers to sign forms to verify they understand the product features. Some agents and customers think these forms are too troublesome, but it is important to have proper procedures to make sure there is no mis-selling.
How do you award the best performers and how do you deal with poor performers?
We offer our staff a one-month guaranteed bonus, and the bonus may be more in a profitable year. We also offer them travel incentives, with the agents with the highest amount of sales able to join an annual travel trip at the company's expense.
This is very popular, as the agents feel proud to join the trip and share experiences with other top agents. This is good as a pleasure trip as well as a way to establish good team spirit. Some of our top agents have a commission of more than HK$10 million a year. For the poor performers, which in our definition are those who have a sales commission of less than HK$118,000 a year, we would ask them to go. We have told all agents we want to have such a minimum sales threshold when they join the company. This is because we want our agents to be committed to their work and we do not want them to work as a part-time agent. If they do not spend enough time and effort selling policies or if they do not come back to the office often, it would hurt the spirit of other hard working agents.
What is your management style?
I adopt a laissez-faire management style and let my team do the job their own way. But I do require them to report to me, as I need to know what they are doing. I also like to listen to the views of different staff about how to improve product features and how to encourage sales growth.
I always believe in working with my staff as a team. If a decision is made by the CEO alone, then the CEO would need to take all blame when something goes wrong. If the CEO listens to the opinion of the staff, it helps achieve a decision that is supported by the staff. If the staff have been involved in the decision-making process, they tend to be more supportive of company strategy.
What do you think about the government's proposal to set up the independent Insurance Authority to add more regulation to the local insurance industry?
We hope the government would take a balanced approach in terms of the new regulation. We hope the approach can help the market have healthy development while not incurring high costs. If the proposed Insurance Authority operates at a high cost, it would mean customers may need to pay more for their policies to support the cost of the new regulation. Hong Kong is in competition with many other countries, such as Singapore, which offer a lot of incentives to international insurance companies to set up there. We hope Hong Kong will not bring in regulation that is too harsh for insurance companies, or Hong Kong may lose its competitiveness to other cities.
MassMutual Asia is part of MassMutual Finance of the US - does it have tight control over the Asia unit?
It gives us a lot of freedom to run our operation in Asia. It is important that we can produce good profit and good business growth here. Since we can produce a steadily growing business, the parent company does not intervene in our daily operations.
What do you do to relax?
I like jogging at night. I prefer jogging outdoors instead of doing gym indoors, as it is more fun to breath fresh air. I also like fishing and sailing. Basically, I like activities that bring me close to nature.