Prudential Wins Lawsuit Against Former Agency Manager

Prudential Assurance Co Singapore won a lawsuit against its former top group agency manager Peter Tan Shou Yi in High Court on Wednesday, over the poaching of more than 220 agents for rival Aviva.

Compensation will be awarded when it has been assessed, but Mr Tan could appeal against the decision. Justice Chua Lee Ming found the 56-year-old liable for breach of his contractual obligation to conduct his insurance business with integrity and honesty. In mid-2016, Mr Tan orchestrated and executed the en masse migration of the agency leaders and agents from Prudential to Aviva Financial Advisers (AFA).

However, the judge held that of the 244 agency leaders and agents who left Prudential, Mr Tan was liable for the profits that the insurer could have earned for only 227 of them. The number comprised 23 leaders and 204 agents who had jumped ship to AFA because of Mr Tan's solicitation.

Justice Chua had directed the expert witness of Prudential to re-compute the insurer's loss of profits arising from the sales that the 227 departed leaders and agents would have made in about 21/2 months. The time frame was calculated based on when Mr Tan started talking to the leaders about moving to Aviva - in May 2016 - and the expiry of the notice period by the last batch of agents who quit.

In contrast, Prudential has sought compensation of between S$103 million and S$2.3 billion as a result of the en masse resignation of 244 agency leaders and agents, with the amount computed based on the duration of the business lost.

The insurer was represented by Rajah & Tann Singapore's Senior Counsel Murali Pillai and Luo Qinghui. The high-stakes case has thrown the spotlight on how competitive the insurance industry is, given that it came to light during the hearing that Mr Tan was dangled a S$15.3 million sign-on bonus by Aviva.

Defended by Senior Counsel Thio Shen Yi, the legally-trained Mr Tan rejected any liability. The judge found that the "non-solicitation" clause did not apply to Mr Tan after he left Prudential, because it was not present in his agency agreement. The court also ruled that he did not owe fiduciary duties to Prudential, as he was not entrusted with the management and control of the agents in his agency.

Mr Thio said his client left AFA and the insurance industry in March 2020, and is now doing business consultancy.