Agent Productivity

Mark Norbom

We promised some additional information in a couple of areas. So, what I'd like to do, if we can get the slides on agency productivity. I just wanted to give you a little more information on agency productivity. This is just-... I've asked Dan and his guys to put together a little bit of information. One, how do we track our agents? What kind of performance indicators do we track? And the ones that are on the left-hand side, the level 1 KPI's are the most basic things and those are the things that you'd likely see in our reporting that we do at a group basis. On level 2 is a little more detailed and level 2 are KPI's that are typically measured by companies. And this is just at a very high level. How many cases do you do per agent? What is your APE per agent? You look at a number of cases per active agent. And APE per active agent. So those are typical measures. We take it one level further. We take it to what we consider level 3 KPI's where we actually look at product mix per agent, so that's making sure that the agents are selling the right product, that if it fits our strategy, that's it's delivering the kind of margins that we want. So we focus on that. We also look at APE for each product, so we try to go for higher ticket goods if possible. That's a key element of our productivity – the size of the case, that agents are delivering. And then the profitability, the margin per product that the agents are selling. So these are key things that we look at when we look at productivity. And as our markets develop, we spend a lot more time looking at level 3 KPI's.

This is a quick look... sorry, the numbers aren't on here, but I think that if you take a pro tracker you could figure this out. This is... you know our total agency force is in excess of 127,000. This is how it breaks down. If you look at it, two thirds of our agents are in Vietnam and in India. You capture about 85% if you take the five largest markets that we have. Now, we haven't put Korea and Japan up here, because we really relatively small agent forces in those markets, and they're the financial advisors. So, they are sort of not the typical tied agent. They're more... very much more professional and so we haven't put those on this chart. This only includes 10 of the markets that we have (per agents?)

On this slide we've gone through and tried to pull together some industry statistics and the accuracy of these statistics would vary a little bit by market. Certain markets like Singapore or Malaysia the regulators are very careful in the way they measure these statistics. In other markets we've had to dig up the information from a number of sources, but what this gives you is: again, excluding Korean and Japan, this shows you the number of Life competitors. In China and India that would only include the foreign company joint ventures, foreign company players, but it gives you the number of Life competitors in each market. Our rank in terms of size of agency force, so how do we rank in terms of our relative size of agent force relative to the competitors. And then the rank by productivity. And productivity in this case would be first year premium per agent. Okay? If you go through it, you can see the number of players there. And if you look at our relative rankings in each one of these markets, I just pulled out a few – China: number 2, the second most productive foreign player. Hong Kong: number 2 as well. India: neck-on-neck. One slash to there... Indonesia: also right near the top. Malaysia: the fifth largest agency force, but the number 1 productivity. So, proud of that. And you can just go down and look at the other rankings. I point out Thailand: Thailand... you know, we don't have the data, but our ranking would be low. Our productivity is not where we'd like to be in Thailand.

I guess what I want you to take away from this is that our productivity is very good relative to competitors. We see that we're doing very well, but you know we don't want to be followers. We want to be leaders. So, even where we are ranked number 1 in terms of productivity, there is room for improvement. So we will always be looking for improvement. I will never be satisfied just by being number 1 against the competitors. We've got to keep moving that forward. Getting better productivity through sales force automation. Or through better product mix. Or through better productivity per agent. So, that's what we are really driving at. Dan do you... Does that sum it up? Okay. Good.

One of the other things that we've promised you and I'm afraid we don't have the slide put together is our market share data. So we will follow with an e-mail or something to you on our our relative market share for our insurance businesses. Dan will follow up on that. Okay? Those were a couple of things that we promised you and I just didn't want to leave those hanging out in the air. Okay, if we can get some chair up here and I'd like to get Dan and the CEO's. And then Ajay, if you could come join us as well, and then we may get some comments from your CEO's but I don't think we have enough room for everybody on the stage.

And while they're coming up, you know, I just wanted to make a few comments about the last session, about Dan and the CEO's, and some of the things that, you know, that amazes me, when I look at our insurance businesses and some of the stories you heard today. You know, you look at Taiwan, where we've had tremendous growth, 27% annual growth over the last several years, 16% up this year, almost doubling margins, in a very competitive market, also our biggest market, our biggest market by APE, so: tremendous job. You know, I look at India: we can overcome entrenched players, like LIC, eh.. through focusing on what Shikha bought out: innovation and real customer focus: running businesses like they should be. And then you look at China... and I... If you didn't get it, you can see there is a lot of enthusiasm in Captain. Just in case you didn't catch that - but that enthusiasm isn't just in Captain, it's in the other people in our China organisation, and it goes through our regional organisation too. But what we're talking about there is building a framework to seize the opportunity that China represents, and using the success models that we built in other markets and have been successful in other markets, to build our operations in China, and so, that's what gives me the confidence that it will work. We've got enthusiasm like Captain and his team, leading the way, and we've got templates that have been successful in a number of other markets. So that's what gives us the confidence that we can move forward in China very quickly. OK, now Q and A - our last session, and I think we'll have about 20 minutes or so, on Q and A, so... I'd open up the floor.

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