CEO INTERVIEW Tan Sek Kee on how flash floods, lack of talent hit Malaysia’s insurance industry

Berjaya Sompo's CEO shared the obstacles faced by the company such as a shrinking talent pool and climate change, and the strategies they employed to try to overcome these challenges.

Following the significant financial impact of the December 2021 flash floods in Malaysia, which amounted to at least $350 million (MYR 1.5 billion) for Malaysian insurers, Tan Sek Kee, CEO of Berjaya Sompo Insurance Berhad, sheds light on the ongoing challenges faced not only by insurers in Malaysia but also across the entire Asian region. In this interview with Insurance Asia, Tan Sek Kee shares his personal journey into the insurance industry and how he navigated the various challenges that confronted Berjaya Sompo.

What are some of the challenges of the general insurance industry in Malaysia and in the Asia Pacific?

Not many new people are entering the insurance industry. Those with experience are reaching or have reached their retirement age or are moving to other countries attracted by better packages.

Another challenge is climate change, which has caused extreme flooding like, for example, in December 2021. We expect the frequency and severity of floods to continuously worsen, leading to increasingly large losses in the property and motor vehicle segment. This will have a material impact on our business as claims increase.

What has Berjaya Sompo done to solve these challenges?

We are starting a Management Trainee programme to start attracting graduates into our industry. Over the course of this programme, we will expose them to various functions within the company and hopefully demonstrate what a noble industry we are in. We have set up a sustainability committee at Berjaya Sompo in 2022 where we run many projects to contribute to ESG.

What makes Malaysia’s general insurance industry different from other Asian markets?

Compared to other markets, Malaysia’s general insurance industry is strongly regulated by our Central Bank. This makes us quite a disciplined market. However, the two main lines of business, motor insurance and fire insurance, are currently undergoing phased liberalisation and this has started to bring in more competition as well as innovation.

What was the greatest test of your leadership skills and how did you overcome them?

In 2017, we changed our front-end system, back-end system, started a new bancassurance distribution channel, and implemented Phase 1 of motor and fire detariffication all in the same year. Needless to say, with so many major projects in the same year, not everything went smoothly and staff morale was impacted and people started to leave.

In the same year, not everything went smoothly and staff morale was impacted and people started to leave. I went into operational mode and managed the key projects personally, motivated team members, recruited new people with the right skills, and we successfully overcame the hurdles.

In your term as CEO, what are the top projects of Berjaya Sompo that you are proudest of?

We embarked on a project to improve efficiency in 2017. Over six years, we reduced our headcount by 20% whilst increasing our premiums by 35%. Our productivity per employee increased from about RM 1 million per employee to RM 1.7 million per employee today. This was done through the Business Process Improvement Project to identify and remove redundant and duplicate processes and utilise Robotic Process Automation as well as digitalising processes. Improving efficiency is not only about cost savings but also contributes to customer experience.

Can you share with us your next plans and projects or if there are new ones underway?

Our Mission is “Insurance Made Easy for You.” Buying insurance or making an insurance claim should not be a scary experience for our clients. We are working towards making insurance easy for our clients to understand, easy to buy, to renew, or to make a claim. Right now we are focusing on our ESG (environmental, social and governance) initiatives.