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Financial Planning / Wealth Management

Financial planning fuels insurance sector growth

By Nicole Wong

Sharon Cheng, head of human resources , AXA China Region Insurance Company Limited

Competition for talented professionals is heating up

One positive thing to emerge from the recent economic downturn is that the average person in Hong Kong has started to pay much closer attention to retirement planning and savings needs. The launch of the MPF in 2001 provided additional impetus and the importance of planning carefully for a future free of money worries has also been regularly highlighted by the media and leading financial institutions. As attention has turned towards longer-term considerations, it is therefore not surprising that an expanded range of investment products has been introduced and that customer expectations have become increasingly sophisticated.

In parallel with these developments, there has been a surge in demand for competent professionals in the insurance industry. The major HR challenge now being faced is the limited supply of managerial candidates with relevant experience and the ability to adapt, according to Sharon Cheng, head of human resources for AXA China Region Insurance Company Limited. "In our industry, that experience must include product knowledge, understanding business operations and technical competencies," she explains. "However, a manager also needs to have excellent people skills, which often take years to acquire."

Staff retention has become an increasing challenge with many insurance companies devoting more resources to recruiting experienced professionals from competitors than to the training of their own staff. This means that competition for the best employees has further intensified. Moreover, with retail banks and fund management houses also looking to hire such people and the China market opening up to foreign insurance companies, it is clear that demand will continue to exceed supply.

While openings for actuaries, risk managers and underwriters have grown steadily, it is in the area of financial planning that the insurance industry is seeing phenomenal expansion. AXA is a good example of that and most of their products are now investment-linked, making it possible for customers to select a financial planning portfolio that combines both insurance and investment elements.

"Whether for education, health or retirement, insurance products are highly personal and have to be tailor-made to meet various customer needs," Ms Cheng explains. This emphasis is reflected in the company's development of different sales channels for specific market segments. "For instance, our channel for institutions is designed to provide services specially for the requirements of different corporations," she adds.

Changing roles

This general change in the way the products are presented to clients has also transformed the roles and job duties of insurance professionals. The sales-driven approach of the past has given way to today's "consultancy", as customers are no longer simply buying standard products, but making a personal investment based on an analysis of their individual financial needs. Consequently, anyone dealing with clients is expected to confirm their own expertise by passing licensing exams, while support staff in areas such as IT and HR must also acquire a broad knowledge of the business.

Ms Cheng points out that there is greater integration between the distribution and support teams and that this has important implications. In recent years, the industry has become highly customer-oriented and the prominent players are allocating resources to train both their sales teams and other staff. "An insurance company is not only a sales agent," she remarks. "All the employees must be able to coordinate closely in order to achieve the company's goals and provide the very best services for customers."

As the overall market is tending more towards wealth management and capital accumulation, Ms Cheng recommends that all insurance professionals should learn more about financial planning and risk management. They should also keep up with demographic changes and be aware of Hong Kong's ageing population and medical services available. This should tie in with their knowledge of the innovative products and distribution strategies that can now be offered.

Assuming that the growth of financial planning will lead to further change, Ms Cheng foresees a possible blurring of the boundaries between retail banks and insurance companies, as each sector expands its range of products. "The previously separate talent pools in the two sectors are gradually merging," she says. "More and more candidates with a banking and asset management background are interested in joining the insurance industry."

Special training

As the range of financial planning options has diversified, it has been accompanied by a new focus on training. This has emphasised product knowledge, selling skills and customer relationship management. Professional qualifications, such as those offered by the Vocational Training Council, have also become popular for people looking to broaden or consolidate their expertise.

For graduates interested in joining the insurance industry, an academic background in financial studies or an MBA is a definite advantage. Having any certificates or licences relevant to the sector will help in getting on to the fast track. All sales professionals are required to sit for the IIQE (Institute of Insurance Qualification Examination) or the LUA (Life Underwriters Association) exam. Operational staff are encouraged to take the qualification overseen by the Life Office Management Association (LOMA) and actuaries must sit special examinations administered by professional bodies in the UK, Australia or other countries.

Despite the promising outlook for the industry, Ms Cheng mentions that there is, in fact, insufficient training within the local education system for people planning to go into insurance. "Maybe the Hong Kong Federation of Insurers and the Vocational Training Council could work together to introduce more insurance-related courses," she suggests. "This would be one possible way of enhancing the professionalism of practitioners."

Talent search

  • Banks and insurance companies now competing for good financial planners
  • Experienced professionals with the right qualifications are much in demand
  • Insurance products are investment-linked and tailor-made for clients
  • Distinct sales channels used for different market segments
  • Focus on comprehensive training for sales teams and support staff



Taken from Career Times 25 February 2005

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