AMERICAN INTERNATIONAL ASSURANCE: Although its parent company is
American, AIA stresses it is very much involved in the social development
of Thailand
After sixty years in Thailand, American International Assurance
(AIA) holds a market share insurers elsewhere would envy.
A meresales agency in 1938 now dominates the local life insurance
industry, with assets at the end of last year worth 69.39 billion
baht.
‘Through
investment in these assets, AIA is indirectly generating funds for
many of the infrastructure projects that are crucial to the country’s
development’
DAN BARDIN
Vice-president and genera manager
The company holds more than 50% of all life policies in Thailand.
Two million policy-holders provide total annual premium income of
28 billion baht. New premiums are currently worth 6.3 billion baht
a year.
AIA is a wholly-owned subsidiary of one of the world's largest
underwriters of commercial and industrial coverage, American International
Group based in New York.
AIA in Thailand provides not only life coverage but also a range
of financial services such as personal accident and health insurance,
borne Mortgages, credit cards, pay-rolls, mortgage and credit insurance,
as well as provident funds.
The company was established on April 14, 1931, in Shanghai by a
group of businessmen led by Cornelius van der Starr, an American
citizen.
Then known as International Assurance Co (Intasco), the company
moved into Thailand, in October 1938, establishing its third sales
agency in the region following those in Hong Kong an what was then
Malaya.
The Japanese invasion of the region in 1941 forced it to suspend
its services until 1945. In 1949 it took on its current name and
upgraded its sales agency in Thailand into full branch in 1951.
The company takes the current economic slump in its stride, as
Dan Bardin, vice.-president and general manager explains: "We
look at the future. We want growth to continue. Like everyone else,
we are concerned about the situation, but our focus is on managing
our way through difficult times".
The company aims to become one of Thailand's top providers of financial
services by 2000.
"As we are the trustee of policy holders' funds, we follow
prudent and conservative investment strategies. The majority of
our portfolio is invested in low-risk instruments with commensurate
returns over a relatively long term horizon.
"In the current volatile market, AIA has targeted new investment
at government bonds and deposits with large banks.
"Through investment in these assets, AIA is indirectly generating
funds for many of the infrastructure projects that are crucial to
the country's development," Mr Bardin said.
AIA's management and investment strategies did not vary from country
to country. Its worldwide operations moved in the same direction.
But AIA was concerned about the state of the stock market, particularly
small companies in which it had invested.
"But we have been here for 60 years and will be here a long
time. We make long-term decisions. We have to be good for 1999,
2000 and 2050.
"AIA will continue to diversify its products, develop cost-effective
choices that meet consumer needs, and build its agency system,"
Mr Bardin said. There was much potential in Thailand as only 12%
of population held life policies, he said.
The economy would show signs of recovery possibly late this year
or early next year. "But we take a Ionger-term view, as it's
not Thailand's problem but a global one. We have a chance to develop
fundamentals that are very strong and sound in the future.
AIA was now working on strategies to ensure that policy holders
felt secure about their investments.
"We may not have a big advertising presence on television
or in newspapers. The greater proportion of our spending goes to
personnel development to ensure that employees have good skills
to provide efficient services.
"AIA's budget for advertising next year will be frozen at
this year's level, although Mr Bardin declined to give figures.
"One thing we did watch very closely was furniture and computerised
equipment to prepare for Year 2000 changes.
"AIA began work two years ago on its computer system to ensure
it would not be affected by the so-called Year 2000 Bug.
Mr Bardin wants to see AIA expand in urban areas. "I would
like to see the day when we have technology with which we can setter
claims within a day."
AIA's task is made easier by its social involvement. In the past
five years alone, the company claims to have sponsored about 100
programmes involving schools, hospitals, temples and other community
centres and charities.
The company has funded further education for talented but l-ieedy
students. In the past 23 years, it has provided 1,325 scholarships
through the Foundation for the Welfare of Needy Schoolchildren under
the Royal Patronage of Her Majesty the Queen.
As well, AIA has contributed to the Thailand Insurance Institute
in terms of activities and training to expand knowledge of insurance
among students and the public. Since 1987, it has provided stationery,
sports equipment and public utilities to 17 schools run by the Border
Patrol Police in Chiang Mai and Mae Hong Son.
Promoting Thais to senior executive posts is an important part
of AIA's culture. Similar policies toward local staff are adopted
ill other countries to underscore relations.
"We have the largest number of agencies ill Thailand. Our
1,300 employees who underwrite policies, sell claims and issue policies
are very well-qualified and hardwork-ing, and only four of our executives
are non-Thais," Mr Bardin said.
Although he took charge of final approvals as vice-president and
general manager, staff made their own decisions. "We have a
lot of discussions. We work as a team."
