When Hong Kong billionaire Richard Li Huynh asked Thanh Phong in 2013 to build a new type of insurance platform across Asia, Phong had one request in return: patience.
“Because if you buy an asset and get it shiny and sell it right away, I’m not the guy. But if you want to build something sustainable in the long term, I can bring the team together, ”Phong told the youngest son of one of the richest men in Asia, Li Ka-shing.
Phong, a Vietnamese refugee who was sent to Hong Kong as a child by his mother after the Vietnam War in 1979, had worked in the insurance industry since graduating from university. He knew what Li wanted would take years to accomplish, even with the high dose of capital he had at his disposal.
That was in 2013. Since then, Phong, 54, has led the aggressive expansion of insurance company FWD across Asia with the aim of attracting customers by reducing paperwork and the complexity of insurance policies with new technology.
The group has visited ten countries in the past seven years, including Thailand, Malaysia, Singapore, Indonesia, Japan, Vietnam, the Philippines and Cambodia. Today it has 9.8 million customers, 6,100 employees, 33,000 agents, and $ 62.6 billion in net worth. It is one of the fastest growing insurers in Asia and, according to people familiar with the matter, is aiming to raise up to $ 3 billion later this year through an IPO.
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FWD’s buying frenzy came with its own set of challenges. As the company tried to build a new brand in a traditional business dominated by established multinational corporations, it inherited entrenched legacies and grappled with cultural differences between the various Asian economies and its thousands of employees.
“We were a brand new group with no story. How do we convince the customer to trust us and [our] promise we’ll pay the debt in twenty, thirty or forty years, ”he says of Los Angeles-based Zoom.
Phong said one of his toughest deals to do as a leader was acquiring the life insurance business of Thailand’s Siam Commercial Bank, the largest insurance acquisition ever made in Southeast Asia. The negotiations were scrutinized as Thailand’s King Maha Vajiralongkorn was the largest shareholder in SCB.
Thailand, Southeast Asia’s second largest economy, was a destination “from day one,” says Phong. “[SCB was] the prize that everyone wanted to strive for, ”he adds.
Deal talks began in 2016 after FWD became the winner among runners and drivers. Then, in 2017, talks over valuation disputes collapsed.
At the time, FWD was a medium-sized group trying to crack the top 5. Phong knew he needed SCB to become the market leader in Thailand. But after the negotiations collapsed, he realized that it would be difficult to get back to the table. Rebuilding the relationship would take the same patience he asked Li years ago.
“It’s always easier to start a new conversation than to fix the conversation that’s already not working,” he says.
And he intended to do so from a position of greater strength. Phong’s team tried to win over the royal family by demonstrating their commitment to Thailand by launching various community support initiatives, employee volunteer programs and fundraisers.
FWD also doubled its existing partnership with the Thai TMB Bank, with which it had a bancassurance contract. The group sought to show SCB how the bank benefited from the partnership, for example by using their digital expertise to increase productivity and deliver results for their partner.
The fact that FWD has a shareholder on its board of directors and does not have to go through any levels of decision-making gave the group another edge over its competitors, says Phong.
“I think all of these things ultimately influenced her mind to come back to the table and talk to us.”
However, the real starting shot for the deal came when King Phong invited among other managing directors to visit the palace in 2019 to attend the monarch’s birthday party. FWD was back at the negotiating table.
It’s always easier to start a new conversation than to fix the conversation that isn’t already working
The deal was finally closed in July 2019 for Bt 92.7 billion (USD 3 billion), making it the largest insurance takeover in Southeast Asia ever made. After the acquisition, as of December 2020, FWD has a 36 percent market share in Thailand in terms of bancassurance – more than the next three groups combined.
“As we announced [the acquisition] Everyone thought it was very quick, ”says Phong. “But it was a long game.”
The challenges did not end with the completion of the acquisitions. The difficulties encountered [in communicating with the workforce] After acquiring AIG Fuji Life Insurance in 2017, the cultural differences in Asia, particularly Japan, became apparent and a painful lesson for Phong.
On Valentine’s Day 2018, a drastic change in government tax law caused the collapse of one of FWD Japan’s key market segments related to corporate tax planning. The team, including Phong himself, decided to adapt the product line and recapture the market. It was a bad decision, however, and the corporate market never recovered.
“We basically lost a year of effort. . . instead of being nimble and quickly switching to the individual side, ”he says with regret. The team was unable to realign its market strategy to focus on individual protection rather than doing business in Japan through 2020.
Phong says the reason for the misjudgment is that he did not expect that the employees in Japan would not be willing to contradict him.
Three questions for Huynh Thanh Phong
Who is your leadership hero?
My mother is my leader because I grew up during the Vietnam War. My father was in the army and never at home. She supported the whole family, she ran business, she took care of us all. . . I still remember the time when the house burned down and she had to rebuild it.
If you weren’t a manager what would you be?
As a kid, I always wanted to be a fighter pilot.
What was the first leadership lesson you learned?
What I learned from the CEO of my previous company was just be who you are and be good at what you are very good at. To become a successful leader, you need to put together a team that really complements you. . . The advice and training that I received from this gentleman has been to surround myself with people who are not the same as you and who have very different levels of expertise.
In Hong Kong or Vietnam his team was “very loud”. “If the strategy looks like this, it is not going in the right direction. I’ll know, ”he says. “I underestimated the unwillingness to step up and say, hey, we need to reconsider.”
He learned to listen more to the people at the front, especially the sales team who looked after customers on a daily basis. Failure taught Phong to be mindful of cultural differences. “In every country, including Japan, you have to be patient, learn and find the right way to connect with and communicate with them because one size doesn’t fit all.”
He remembers a speech in the Philippines where people were so inflated that they were “ready to run out and jump over the fire.” In Japan, however, “you would face a sea of very serious-looking men in suits”. Phong says the key is to find the right thing that people love.
Sometimes a little perspective also helped. After the Vietnam War, which devastated the country and left 70 percent of the population below the poverty line, Phong’s mother put him and one of his sisters in a boat and told them, “You have to get out of the country. You have to leave the family. ”
Phong, who later settled in Canada before returning to Hong Kong, said that when faced with challenges, he would look back and think, “This is nothing compared to what my mother went through.”