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h, East is East, and West is West, and never the
twain shall meet,
Till Earth and Sky stand presently at Gods
great Judgement Seat;
But there is neither East nor West, Border, nor Breed,
nor Birth,
When two strong men stand face to face,
tho they come from the ends of the earth!
Very often this quote from Rudyard Kipling stops with the
rst line, as if to suggest there never was a convergence between
the two directions. Mr Kipling himself was born in the East and
grew up scripting his genre on themes from Indian wilderness,
country of his birth, despite living in the West. But no sooner
than in the third line does he dispel any such divergence.
5one prescriptions: transIorners!
The East is no way insulated from the inuences of the West
and vice versa. It is opportune to explore and seize this golden
moment as a foundation for the coming 50 years, thereby
also avoiding the pitfalls from the experience of the West,
benetting from their missed opportunities and realising ones
own potential, thus fullling the destiny. The prescription is
rather concise: deal effectively with the shifting demographics
and do not forget that we are a service. Therefore, focus on
delivery. And do look around for the new trends.
Diversity: "Wonen hold up halI the sky"
So goes an ancient Chinese proverb! What is stopping us from
formalising their due share of the role? While diversity is not just
about gender, it is indeed foremost about achieving a judicious
balance between genders. There is a very compelling economic
rationale, too.
To quote PLC Magazine (UK), this is not just as a result of
concerns about equality generally, but also because of calls from
investors, who will be aware of the increasing body of empirical
evidence that companies whose boards have least one-third
women outperform their rivals with as much as a 42% higher
return in sales, 66% higher return on invested capital and 53%
higher return on equity.
The UNs Millennium Development Goals aim to increase
gender equality and female empowerment by 2015. Let us
start with the latest Global Gender Gap released by the World
Economic Forum (WEF). Only one Asian country made it
to the top 20 in the 2011 index. The Philippines, at eighth,
slipped one place from the previous year.
Here is an eye-opening compilation by www.asia360news.
com with regard to working women in Asia:
The likelihood of women working is at 53%, compared
to 77% for men;
Labour force participation rate is 55.5% for women,
against 80.7% for men;
Forty eight per cent of women work in the agricultural
sector, compared to 38.9% of men;
One per cent of women workers run their own business
with paid employees compared to 2.6% for men; and
Women make up more than half of the workforce
in sectors for health and social work, education,
private households with employed persons, hotels and
restaurants, and nancial intermediation
Gender inequalities are not only rooted in the socio-cultural
norms of countries but also entrenched in the policy and
institutional frameworks that shape the employment
opportunities of Asias female labour force of 734 million, says
the Asian Development Bank in its 2012 report, Women
and Labour Markets in Asia. The price of this glass ceiling is
estimated at US$ 4247 billion!
At the current rate of change, to quote Lord Davies, it will
take over 70 years to achieve gender-balanced boardrooms in
the UK. All eyes are on how FTSE 100 companies will be able
to achieve 25% female board representation by 2015. Do we in
East Asia have that luxury and can we not sidestep the woes of
the West?
There cannot be a better cue for East Asian insurers than
this. Build a female workforce, dismantle the glass ceiling and
reinforce your respective boards with women power. Re-engineer
and boost your bottom line. The formula is now a proven
success mantra. Moreover, with working-age populations on
the verge of rapidly shrinking, tensions between workers and
retirees are bound to increase. By willingly inducting younger
women in all strata of business, East Asia could also pre-empt a
deepening fault line endemic in the developed markets.
The EAIC should seize growth opportunities by learning from the West,
dismantling the glass ceiling and focussing on delivery, not distribution,
writes Mr Praveen Gupta of Raheja QBE General Insurance Co.
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Delivery, not distribution: DNA Ior the Iuture
This is not just a left brain versus right brain debate.
Over-emphasis on distribution lies at the very heart of global
nancial turmoil. It fosters greed and mutates the nancial
service architecture. Let us get back to the drawing board. Are
we a service industry or are we transacting in products? The
answer overwhelmingly is in the favour of the rst.
Why is distribution not equal to delivery?
Distribution is but a small part of delivery and more xated with
the point of sale (POS). We trade in the business of trouble.
The woes of our trade commence only after a sale. POS is only
the rst major milestone, after which come the several test cases
sometimes unique to each individual every time leading to
special Moments of Truth (MOT). It actually goes beyond the
realm of sale into the world of individual experience that makes
our business uniquely diverse.
Yes, there are downsides because we then impose standard
operating procedures (SOP) which do not allow the individual
customer to be treated as special. Our call centres - whether
onshore, offshore or outsourced - further complicate it in their
diverse ways.
A bridge too Iar
Having sold a policy or any nancial product for that matter,
the focus of a nancial services entity is on the next kill. The
back ofce is faceless, notoriously prone to stafng churn, and
diverse in unacceptable ways. The customer is a king or queen
of no consequence, confused and anxious, because distribution
only drives sales. It wants to sell what it wants to sell - neither
what the end user desires or deserves, nor the solution. This can
never lead to a true fulllment across the spectrum, be it retail,
commercial or corporate in nature.
Distribution is about sales and hence, is short term. It is full
of discontinuity, thereby making it harder to retain a customer.
We all know it is more expensive to acquire a new customer than
retaining one. It makes the entire arithmetic unsustainable.
Now look at what the language of distribution does to
our business. We end up creating separate silos that end up
contesting with each other. It is not just the sales arms ghting
to nish. The rest of the organisation tends to be anarchic
too - underwriting versus claims versus marketing versus
operations versus geographic entities. If you are not treated as a
companys customer, the concerned brand is already diluted or
contaminated. The dissonance will only make the jobs of those
running or supervising such businesses fraught with negative
and even toxic energy.
Delivery, on the other hand, is service driven. It is about
managing and sustaining the continuum of relationship.
Unfortunately, increasingly the insurance business is being
congured as a sales organisation. Behaviour and personality
mutate into something inherently contradictory. Not just that,
some also tend to pose as role models for the bottom of the
pyramid entities who owe their existence to pure service. In
emerging economies, this is embedding a bad DNA into the
evolutionary cycle of the nancial services architecture.
What nust we do?
East Asian insurers need to really think hard and deep as to where
must they head. They cannot afford to be nave in interchanging
distribution with delivery, like much of the developed markets.
They must not be allowed to be conditioned as a sales industry.
The POS mindset needs to be recongured as MOT. Both are
diverse in their own ways.
Let us not forget that having chosen the current way, we
have already invited the risk of unintended consequence.
Before this risk becomes perilous enough to threaten our raison
dtre, let us bring back the indispensability of service that we
all seem to be missing in the world of nancial supermarkets or
the one-stop shops. The idea is not to simplify things as they
existed way back in time. It is about keeping things simple
in a unied and holistic way. Not only will this have positive
implications for the physics of our networks, they will also
deliver the chemistry right.
East Asia insurers have withstood several headwinds in the
form of CAT events and nancial meltdowns. Staying clear
from a distribution mindset will only insulate them from such
vulnerabilities in times to come.
Breakout nations: Cockpits oI the Iuture
In his book Breakout Nations: In Pursuit of the Next Economic
Miracles, Ruchir Sharma attempts to identify the economic
stars of the future. He believes that we should abandon the
habit of simply extrapolating from general global trends and
look at the emerging markets individually. The author believes
that the new breakout nations will probably spring from the
margins even from the shadows.
Analysing the prospects for various Asian countries, Sharma
is very upbeat about Indonesia, the Philippines and Sri Lanka.
But he awards the gold medal to South Korea - perhaps as much
due to an impending re-unication with its northern half, as to
other reasons.
Todays East Asia includes EAIC member cities of
Bangkok, Hong Kong, Bandar Seri Begawan, Jakarta, Kuala
Lumpur, Macau, Manila, Phnom Penh, Seoul, Singapore,
Taipei and Tokyo. These obviously represent the countries they
are part of. Interestingly, the footprint is neither Asean nor East
Asian. If it mirrors Asean, Vietnam & Laos would be the next.
If things were to improve in Myanmar, would Myanmar be a
logical extension in the making? If Japan is included, is China
(notwithstanding Macau & HK) likely in the future? If India
were to be inducted in the Asean, does an Indian city have any
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entry prospects to this elitist club? Could Sri Lanka be an easier
one? Perhaps not too far from its radius also lie the Central
Asian countries. Can Australia and New Zealand be forever out
of contention?
While socio-economic and political forces will inuence the
composition and evolution of a future EAIC, the next 50 years
are likely to be more exciting. It is at the heart and fringe of this
entity that most energy will be unleashed and wealth created. It
will also be fascinating to see who eventually turns out to be the
breakout nations. Perhaps all of the EAIC members!
Let the best driver drive
Having touched the magic 50, East Asia can take the pride
in the tremendous resilience demonstrated by its existing
membership. However, in the course of the next 50, there
is no room for complacence. One way to shrug this off is to
learn from the examples of the West and avoid those mistakes.
Women have played dominant role in the evolutionary phase
of the eastern societies and continue to play a vital role in the
sustenance. Their active inclusion in the entire value chain of
nancial services will bring a much desired balance.
If we as an industry can become a beacon and a magnet,
we could build some great future global brands right here with
strong protability, increased penetration and governance. We
would also get our priorities right and shoo away any potential
systemic elements, if we focus on delivery and not distribution.
Let us remember we are a service and not a product industry.
This aside, if we keep an eagle eye on potential breakaway
economies, we could optimise synergies, power the growth
engine and let the best driver be in the driving seat.
All that glitters may not be gold. But this one indeed is!
Mr Praveen Gupta is Managing Director & CEO of Raheja QBE General
Insurance Co. He is also a member and Deputy Chair of the Chartered
Insurance Institutes Diversity Action Group. He promotes the cause of diversity
through a blog at
This article represents authors personal views.
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