Manulife Financial Corporation is not changing its strategy for Manulife Vietnam despite the global financial turbulence, as the corporation’s executive vice president, Diane Bean, shared with Vietnam Investment Review when finalising her world tour to examine subsidiaries.
How is Manulife positioned amid the global financial crisis?
Every company is exposed to the crisis and we are well positioned in this environment. I think insurers are less vulnerable than banks in terms of interconnection. Today, customers, investors and employees around the world are getting more nervous.
In Asia, which makes up a very big piece of our growth strategy, people are also getting more and more careful. However, we are here with a long-term objective, have things to build and pursuing aggressive plans. We do not see any changes in our basic strategies, which are to develop specified profitable businesses. We try to be a serious player in every market.
With Manulife Vietnam, which has done very well over the last couple of years, we continue to chase ambitious growth targets. I am very impressed by what our team has done here to attain the targets. They have quickly developed the agency networks and our earnings and sales in Vietnam are growing rapidly. They are working out even more portfolio products, getting them well balanced and diversified in this market.
What is your comment on Manulife Vietnam’s investment return for the first half of the year?
Our corporation as a whole made a 17 per cent return on investment and we expected Manulife Vietnam to do that, too. But Manulife Vietnam is just in its early phase of development and does not make that kind of return, because it has higher expenses than assumed for long-term strategies.
But over time the business is getting bigger and can achieve scale, then it starts to achieve targeted returns.
We have an ambitious business plan with our asset management company. The stock market in Vietnam is still in the early stage and we see there are huge opportunities to grow in the future.
How important is Vietnam’s market in your company’s strategy?
Vietnam is important to Manulife. Right now the local life insurance market is not big in terms of size because it has just been born and is growing. But it will be very important and make a meaningful contribution to our earnings in the future. The market makes it much more attractive to our company to have successful cooperation in Vietnam along with Singapore, the Philippines, Hong Kong and China.
Manulife Vietnam is the number-three life insurer in Vietnam and I think the local insurance industry is very young. sMeanwhile, we have been developing a lot of other products. We have just created an asset and management company here which does not only run our owned assets for backing our insurance products, but will also be able to develop asset management for other applications of mutual funds. So you will see a lot of our new products coming out in the future. In addition, we will deploy our resources to develop the alternative distribution channel as we see a lot of business opportunities.
The high employee turnover rate is seen as a big headache for many companies operating in Vietnam’s financial sector. Is it a problem for Manulife?
Yes, the turnover rate is a concern for us. We have tried to create an attractive working environment, but sometimes people may receive offers for bigger jobs or higher pay from other companies. That always happens. We saw it in developing countries like China, and it is very similar here. But right now it is very challenging to attract and keep good people.
The current economic crisis will have an impact on the world and it is possible that the great boom in Vietnam may slow down. But I still think the Vietnamese economy will be very strong. People watch carefully overtime because they want to be more secure with companies they know rather than going off somewhere else where they do not know about the environment. Hopefully, this will make a temporary beat of the turnover rate.
But I think Vietnam will continue its high growth compared to other areas. People are trying to do a lot of talent recruiting, but hopefully they will calm down.