Tan Hak Leh is accustomed to occupying lofty corporate positions as an insurance executive with 25 years of industry experience, 17 of them in management positions in Singapore. But the chief executive officer of AIA Thailand turns out to be very down-to-earth in person, soft-spoken and easy to chat with.
So it wasn’t that surprising that a recent conversation included a reminiscence about his backpacking days in the UK and other parts of Europe when he was a Malaysian student picking green peas in Denmark to fund his first solo tour.
One of the perks of working as a summer student in the Scandinavian country back then, he says, was that you didn’t have to pay the high income tax rates that all working Danes have to endure.
“That makes a big difference,” he recalls with fond laughter. “The minimum income tax rate in Denmark in those days was around 49% and I was there for only one month. It was fun to be picking green peas there in the summer.”
But farm work was just a diversion and not a calling for someone who was looking for a way to apply his skills in mathematics to a career that could offer him intellectual stimulation.
Mr Tan was born in Pekan Nanas, a small town in Johor in southern Malaysia. The community’s name can be translated literally as “Pineapple Village”, as pekan means village in Bahasa Melayu and nanas is a variant on the French word anana for pineapple. He completed his A-levels education there before moving to pursue a degree in actuarial science in the United Kingdom.
“When I was a student, being an actuary was positioned as a challenging profession with a good career opportunity in the financial service sector,” Mr Tan says. “It was also positioned as a profession that allows you to make use of your mathematical, statistical and analytical skills and this combination was quite appealing to me.”
Going to the UK was a logical move for him as there were no actuarial science degree programmes in Malaysia at the time, and he had been familiar with the British educational system since he was young.
“With the A-levels it was much easier to go to the UK and I was in Scotland for four years where I thoroughly enjoyed myself as the Scottish were and still are a very friendly people,” he says. “It was a totally different experience as I had not travelled much in those days, so to spend a couple of years overseas was something that was refreshing and quite rare for me.”
During his school holidays, Mr Tan went backpacking all around the UK and Europe. Because he was a student, he had to work to pay travel expenses and that led to his pea-picking stint in Denmark.
Having gained some memorable life experiences as well as a first-class honours degree in Actuarial Mathematics and Statistics, Mr Tan then had to put that knowledge to work. Initially he decided to stay in the UK and work for an insurer there.
He stayed at Equity & Law for a year before returning to Asia as an actuarial consultant and director with NMG Risk Managers & Actuaries in Singapore. After gaining firsthand experience in product pricing and valuation of insurance liability for clients in Singapore, Malaysia and Indonesia for three years, Mr Tan decided that it was time to narrow his focus to life insurance.
“I was crunching numbers, writing software, doing pricing for insurance companies and a lot of work for government agencies on health insurance and pensions and after three years, I decided that I should spend more time within the life insurance industry to make sure that I have a deeper understanding of it,” he says.
The life insurance sector, in his view, provides the most job opportunities for actuaries as their skills are more widely used there when compared with other sectors in the insurance industry.
“Traditionally it was life insurance and pensions but the use of actuaries in pensions is going down but its use in life insurance is still highly relevant, and that is why you find more actuaries in the life insurance segment,” he says. “I believe that this is an industry that will continue to add a lot of value to the life of an average person along with society as a whole and it is still evolving.”
Singapore also turned out to be a very good place to hone more skills, including learning about the regulation of the business, which ended up turning into a new job opportunity.
“The way it works in Singapore is that the regulator and the industry work very closely together on various issues, so I got to know the regulators’ agenda quite well,” says Mr Tan.
“It was a period when the Singapore government was embarking on a massive financial sector liberalisation,” he recalls of the period before he joined the Monetary Authority of Singapore (MAS), the city-state’s central bank.
For the insurance sector, there was a recognition of the need to move the entire regulatory framework to one that is more risk-based. It became clear that regulators needed to make a lot of fundamental changes to the rules and regulations and as a practitioner, he says, it was difficult to pass on the opportunity to “help change the rules of the game”.
“It was a very temping proposition. I had a wonderful five years altogether and I was fortunate enough to be able to be involved in the immediate revamp of regulations for life insurance in Singapore.”
Mr Tan helped the MAS introduce the riskbased capital (RBC) framework for insurers in Singapore, which aims to put in place a more transparent and risk-focused capital and valuation basis that reflects all major financial risks.
The system was developed in close consultation with insurance practitioners and the actuarial and accounting professions and Mr Tan, as the director of the Insurance Department, played a big role in setting it up and rolling it out in 2003. The Singapore approach has since been widely emulated in many other countries in Southeast Asia.
“The framework was a significant move for Singapore because it has, in a way, upgraded the financial and risk management of the insurance industry quite substantially,” he remarks. “For regulators, one part of the job is about safety and soundness by making sure that the financial institutions are financially strong. The other part is about business conduct to make sure that the financial services sector embraces and adopts good practices.”
Through his job at the MAS, which also oversees banks and other financial services providers, Mr Tan became a very active participant in industry-related activities. He also found himself travelling even more frequently, something that came as a positive surprise for him.
“To my pleasant surprise, I was doing quite a lot of travelling as a regulator … and it was a very different exposure from the private sector as it is a lot about policy setting,” he explains. “Since the MAS is an integrated supervisor, it was a vibrant environment to gain much more exposure to other industries within the financial services sector.”
Five years with the public sector “significantly broadened” his horizons and gave him a better perspective on what would contribute to a progressive life insurance industry, with a thorough understanding of the issues and challenges. But he was hungry for a new experience, which led him to return to the private sector.
He joined Great Eastern Holdings (GE) as managing director and rose to CEO, helping the company become a market leader. He later moved to rival AIA Singapore in June 2011 as CEO when the company held its public initial offering.
“It was the beginning of a new lease on life for AIA Group and it was a very appealing opportunity for me to be part of the team that implemented some changes for AIA Singapore,” he says.
“As a group we have been doing well, we have progressed really fast and Singapore is always a place where many initiatives get rolled out, including our electronic pointof-sales system.”
The iPoS is a market-leading interactive system featuring a tablet-based sales suite that includes financial needs analysis, the ability to obtain quotations, complete applications with an electronic signature and make payments, all in one. It is now being used by agents across the group and has become an integral part in helping AIA going paperless. It is now a 90% paper-free company.
Mr Tan also helped introduce AIA Vitality, the group’s health and wellness programme that gives customers knowledge and tools to improve their health with incentives, in July 2013. It has become a crucial part of the insurer’s new brand promise of “Healthier, Longer, Better Lives”, with David Beckham as one of the ambassadors in the latest campaign.
“It was one of the programmes that the whole group embraced and it is also a programme that has changed my lifestyle totally,” he says with genuine enthusiasm. “Before Vitality, I was absolutely close to having no regular physical exercise since I left Scotland. Because of the programme, I have started to run every day which is a side benefit of being involved in a programme like this.”
After four years in Singapore, Mr Tan was posted to Hong Kong as the AIA Group’s chief risk officer in September 2015. Apart from leading the risk and compliance functions across the group, he also made important contributions in helping to set up its Target Operating Model.
“Then after that there were some changes in AIA Thailand when they needed someone help run the business here, and the rest is history as I have been here for more than two years now,” he adds.
Mr Tan’s backpacking years have ended but he has finally found new running legs with incentives from Vitality and a promotion that has brought him to Thailand, one of the group’s most important markets which at one point accounted for more than 60% of its entire operations.
The group now has around 5.5 million policyholders in Thailand where it has been active for more than 80 years, for a market-leading share of 21% of written premiums as of 2017.
In his view, AIA still has an “enormous opportunity” to increase the penetration of life and health insurance in Thailand to help people acquire sufficient coverage; even those who have some life insurance still still do not have enough coverage, in his view.
“If you look at Thailand and use the industry statistics you will get the number of life insurance policies divided by population size, it has been less than 40%. In many of the more mature markets, it is closer to 100%,” he points out.
“For Singapore, the policies in force could be about 15 million for a population of 5 million so it is quite clear that the demand side is still significant here and in terms of business opportunity, it is quite obvious for Thailand.”
The company is now looking to meet that demand by relying heavily on its agency force, which will remain a key element of its distribution strategy.
“It is clear to me that the level of awareness, while it has been improving over the years, of the importance of life insurance here is not as high as it should be,” he says with a certain level of concern.
“This means that there is a lot more to be done to make people and families realise that having a sufficient, or at least minimal, level of life and health insurance is probably one of the key priorities that every family should have before they look at many other financial products.”