Singapore Lion Jumped Ship

The mass resignation by 300 or so agents from Great Eastern (GE) to join arch-rival AIA in September took the industry by surprise, to say the least.

This was the largest one-off act of poaching seen here. After all, nearly 10 per cent of GE's 3,800-strong agency force jumped ship, eclipsing the 250 agents who crossed from Prudential to Aviva last year.

But the $100 million carrot said to have been dangled by AIA is even more mind-boggling.

It sparked calls by some in the industry for more rules to curb such poaching. The concerns centre on fears that poached agents would be under pressure to meet sales targets at their new firms, raising the prospect of product mis-selling and policy churning.

Churning happens when customers surrender their policies - to their detriment - and the proceeds are used to buy new plans from the agents' new employer.

There were also questions about who would really end up bearing the high acquisition cost.

But the intense rivalry between financial institutions and the ongoing battle for market share means such poaching is likely to continue.

The Monetary Authority of Singapore (MAS) has stated that there are guidelines and rules to guard against improper policy switching. Firms or representatives found to have breached regulations or engaged in improper conduct would face MAS penalties.

Meanwhile, the Life Insurance Association Singapore is working on new guidelines on the recruitment of rival agents. Sources said that one could require crossover agents to be accompanied by a manager during appointments with clients for a period of, say, three months.

Apart from these measures, industry practitioners are asking if more can be done.

While the MAS says it does not intervene in the general recruitment decisions of financial institutions, perhaps it could impose a cap on the amount offered to departing agents.

On a brighter note, several GE agents who resigned before the poaching did a quick turnaround to rejoin the insurer.