| Written by Aznita Ahmad Pharmy |
| Monday, 07 June 2010 00:00 |
Michael K N Heng, CEO, Tokio Marine Insurans (Malaysia) Bhd
You studied economics in Universiti Malaya, did an MBA in the US and then obtained a doctorate in business administration from Sydney. What made you join the insurance industry?
After graduating, I went straight into my father's business, not the insurance industry. My father's business is an antique shop, one of those old renowned shops in Jalan Tunku Abdul Rahman.
After a while, I decided to do my MBA in the US. At that time, I had a deal with my father because I was still running the family business. The deal was that I come back after one year, pass or fail. He didn't allow me [to take] a two-year programme. So I did a one-year accelerated programme at Ohio University.
When you're young and you've got an MBA (I came back in 1984), you think the world is your oyster. So that's when I told my father that I wanted to strike out on my own.
I spoke to a few companies and somehow an insurance company, Jerneh Insurance, said, 'Look, why don't you do some corporate planning work for us.' I started in corporate planning and they decided to keep me on and the rest is history. So, I've been in the insurance industry for 22 to 23 years and have not looked back since.
Michael K N Heng, CEO, Tokio Marine Insurans (Malaysia) Bhd
What was your father's reaction when you told him you wanted to strike out on your own?
He was furious. But today, he's proud and happy that I'm successful. He agrees that I would probably have been constrained had I stayed with the family business.
You were appointed CEO of Tokio Marine Insurans at the beginning of this year. How did your previous role as deputy CEO prepare you for this role?
You have to look beyond the four edges of your table and you've got to be very multi-focused. I think the biggest difference is that when you are the deputy CEO, you can still be very hands-on even though you have several departments under you.
As the CEO, it's the whole company you have to manage. You cannot afford to be hands-on in everything and you've just got to work with your heads of departments, senior people, and trust them to get it done by a constant feedback loop. It's hard though because I'm a very hands-on person.
What is your management style?
I always feel that the higher you go, the less information you get, the less bad news you get. To me, I'd rather hear the bad news. With good news you cannot fix anything, with bad news you can.
One thing I always encourage among my staff is that there is always this option to agree to disagree. That's one thing I hold to. I don't want people to have certain information and not tell me because they fear me.
What are your plans for TMIM this year?
We're sort of in a consolidation mode. I think my predecessor [Phang Kwang Chee] did a fantastic job building up this company from scratch. He started, I think, in 1999. We were basically in the last position in the industry and we're now the fifth largest. He brought in people from different companies and taught everybody what we can achieve. We started from two or three branches and now we have 24 branches. So the growth of the company has been phenomenal. But one of the things about growing so fast so quickly is that the infrastructure doesn't catch up.
So it's time we slowed down and let our infrastructure catch up. We're upgrading our IT system. When you upgrade the IT system, you also have to in many cases try to review and where applicable, redefine your business processes.
Does the focus on consolidation mean you won't be looking at acquisitions this year?
The plan for this year is consolidation but if a good opportunity comes along, it is obviously something we want to look at. Our priority this year is not to really grow but to look at our back-end infrastructure and how we can improve. There may be some businesses that are not so profitable, so we need to analyse and see if we can turn around the businesses. Right now, the whole industry is facing losses in motor insurance.
So we're looking at how we can make the motor insurance business more profitable. Where can we plug the leakages? For example, are we processing certain files too slowly because of the legal process? If the claim is settled three to four years later, when you add in the interest cost, the final claim amount goes up. Hence, can we try to settle claims much earlier?
What is TMIM's portfolio ratio when it comes to its motor and non-motor insurance business?
We had about 58% motor and 42% non-motor last year and we want to reduce that to 55% for motor and 45% non-motor this year.
How do you like to spend your free time?
My kids are still quite young. I have three kids, they're 14, 13 and 10. So I spend time with them, whether it's shopping, dining, talking, or even just watching a movie. I also play golf and so does my wife. Unfortunately, none of my kids play golf.
If you weren't doing this job, what would you be doing?
I would either be an entrepreneur or a lecturer.
This article appeared in Management@work, the monthly management pullout of The Edge Malaysia, Issue 809, Jun 7-13, 2010.
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