What has your recent growth been like?
From a reinsurance perspective, Aon Benfield has been growing year on year. We have a sizable market share and we believe from our own internal statistics that we are a market leader in terms of our market size for treaty.
Has there been any growth in the reinsurance sector in Malaysia that you can share with us?
In terms of total industry GWP for the combined general insurance and Takaful premium, it is MYR20bn ($5bn). The reinsurance pool in Malaysia is estimated to be MYR5bn, or $1.25bn.
When it comes to industry performance, in the past we have had very high single digit growth of between 5% to 10% year on year, but in the past three years we have seen a slightly lower rate of growth, below 5% for the combined general insurance and Takaful insurance. In terms of GWP, last year the growth was less than 1%. This affects the reinsurance premium as well because Malaysia is not a cat country. We don't really have huge catastrophic loss, and our biggest cat exposure is flood. So when the direct insurance pie doesn’t really grow, the reinsurance pie reacts similarly.
Thus, the current growth rate for reinsurance premium is relatively flat. There is also very small growth in terms of direct insurance. This is partly because Malaysia is going into a phased detariffication - direct premium rate would drop. That is why the reinsurance and insurance sectors need to work together to try to find ways to grow the pie of the whole industry.
Any other challenges Aon is facing in Malaysia that you can tell us about?
When you have a leading market share the challenge is how you can grow further from that. In addition, the other challenge is looking at helping our clients grow their direct insurance book. This is where innovation has to come in.
Are you doing anything to keep up with technology?
At Aon we have a speciality team, and whether it’s from Aon’s Commercial Risk Solutions business or the firm’s Reinsurance Solutions business, we are looking at many innovative products and services, one such as cyber-risk. Indeed, we have made large investments in our cyber capabilities. So we are trying to look ahead to add value to our clients in terms of innovation and new products.
You mentioned cyber-crime and cyber-risk - is this something Aon Malaysia is looking out for? Is there high exposure to cyber-crime in Malaysia?
Cyber is a product which insurance companies could offer and benefit from reinsurance support - that's where we come in with our specialty.
Any future M&A plans you can divulge?
Aon is always looking at ways to grow and we don't discount that, but at the moment I don't think there is anything we can share – but we are always on the lookout on how we can expand.
Do you see a change in policies affecting Aon due to the new government being voted in?
I think the voice of the nation is clear on good corporate governance. We are optimistic that the new government will introduce positive measures for businesses, and we look forward to the coming period so that the industry can flourish and grow in Malaysia.
Diversity is a hot topic in the industry at the moment with many companies trying to appoint more women and different ethnicities. Is this something Aon Malaysia is working towards - to have a more diverse workforce?
In Asia as a whole we can see that there are more and more women being hired in senior management positions. In Malaysia similarly we are actively trying to increase the participation of women in senior positions. Even the government has indicated the need for more women in ministerial positions in cabinet.
However, this doesn’t mean that we should prioritise gender when selecting candidates. I think the most important criteria is merit, and who is best qualified for the role.
I would however like to speak for the insurance industry and say I see a lot of women holding senior positions in the industry over the years. In fact, Malaysia is a very open market when it comes to women in the workforce.
In Aon, the majority of my senior brokers are ladies, I myself head the local branch here in Malaysia. So I don't think we face discrimination of this sort. However, in the insurance industry traditionally the chief executives were mainly men, but we are definitely seeing a shift now.
There is a struggle in the industry to find the right talent, is this something Aon Malaysia is facing, trying to find the right people with the right skills?
We do have a lot of talented people whom we see doing very well in their insurance careers. However, many are attracted to Singapore, the closest country to us where the Singapore Forex is stronger, and actually a significant number of key prominent positions of senior insurance people in Singapore are held by Malaysians.
The gap in talent has been forming for the last 10 to 15 years where there has been a lot of brain drain going out of Malaysia.
However, having said that the population in Malaysia is big and we have a number of people coming into the industry - in particular we see that we are the biggest generator of actuarial capabilities and we have a lot of bright actuarial students who have skills coming into the industry.
Recently as well we have seen many of these people coming back to the country. However, it is indeed challenging to attract people who have the right speciality and I think we need to do bit more to tackle this.
What has Aon been doing to tackle this?
Aon has been making a lot of investments in this aspect. We always take on fresh graduates across the business. We also offer specific programmes for them and train people so they can be equipped with the right expertise and skills - and after a couple of years they gain the knowhow to navigate the industry and succeed in their careers.
Unfortunately, as I said, many experienced people have indeed left the country and are working in other nearby countries. This can be reversed however if businesses offer attractive packages. Despite the brain drain that has happened in the past we believe there is a great future outlook for the country and I do believe a lot more of the talent will come back to Malaysia.