This article first appeared in The Edge Malaysia Weekly, on March 13 - 19, 2017.

IT has been a busy three years for Ramzi Toubassy since becoming the first CEO of AmMetLife Insurance Bhd. During this time, he has been busy dealing with legacy issues, undertaking a reorganisation of the management team and rebuilding its agency force.

MetLife International Holdings Inc acquired a controlling 50% plus one share in AmLife Insurance Bhd for RM812 million from AMMB Holdings Bhd (AmBank Group) in April 2014. The insurer was rebranded AmMetLife, with the 49-year-old Toubassy recruited to run it. AmBank Group retained the remaining shares in AmMetLife.

“When I came (in September 2014), we had about 2,000 agents and now we have 1,500. We want to raise the number to 2,000 again by year-end,” Toubassy tells The Edge in an interview.

“To MetLife, the AmBank tie-up was very important because Malaysia is an important market. The country’s gross domestic product has been growing around 5% on a yearly basis, the life insurance industry at 5% to 7%, and the industry's penetration rate is still low. So, it is putting a lot of money to become a strong brand here and we are starting to see all the hard work that we have put in (come to fruition),” he says, adding that new business premium grew 35% last year.

“AmBank Group has 175 branches across the country and is a well-known brand. With AmBank Group as our partner, it  was a good opportunity for MetLife to take advantage of the AmBank brand and take over its life insurance arm,” he adds.

AmMetLife is targeting new business premium growth of 35% to 40% this year. “A company like ours need to grow at a rate of between 30% and 40% because we are small and we need to grow faster, while the bigger insurance companies will probably grow 8% to 10%,” Toubassy says.

According to the Life Insurance Association of Malaysia, total new business premiums in Malaysia grew 18.3% to RM3.68 billion in the first three quarters of 2016 from RM3.11 billion a year ago.

One of AmMetLife’s challenges is taking on the well-established incumbents. The top five life insurers in the country account for 80% of the market share. There are 14 players in the local life insurance industry.

Toubassy says AmMetLife has about 2.2% share of the life insurance market.

“While MetLife ranks as one of the largest life insurers in the world, it is a relatively unknown company in Malaysia, being a late entrant into this market. So the longer you stay here, the more people will know who you are,” he adds.

“We have a clear objective — we want to be the top five preferred insurers in Malaysia by 2020. It’s not about being the largest insurer as measured by premiums, but more of being on people’s preferred list,” Toubassy says.

One thing that is going for AmMetLife is the low penetration rate of life insurance in Malaysia.

“About 50% of Malaysians are insured, with 90% to 95% of them underinsured. The average life insurance protection is about RM50,000,” he says. “So, the more people with insurance coverage in Malaysia, the less of a burden they become to the economy in the future.”

Bank Negara Malaysia has set a target of 70% life insurance penetration by 2020.

As such, for Toubassy, the challenge does not come from the competition between insurers because of Malaysia’s low market penetration.

“Rather, the challenge is how do we extend our reach and insure as many people as possible.

“We have a lot of opportunities here. So all (insurance) companies can grow fast and keep growing. The competition here is what we can do to reach out to more people and faster than our competitors,” he says.

Toubassy hopes to resolve AmMetLife’s legacy issues by the middle of this year while building the foundation of its four distribution channels, namely its agency force, bancassurance, employee benefits and direct marketing.

“Agency channel accounts for some 90% of most of our bigger counterparts’ insurance sales. We are fortunate in the sense that we can tap both the agency and banca channels, which each accounts for 35% to 38% of our total sales. Another 20% to 25% comes from the employee benefits channel,” he says.

As part of the stock purchase agreement, MetLife has an exclusive 20-year arrangement to sell its insurance and takaful products through AmBank Group’s network across Malaysia.

Toubassy says the contribution of direct marketing to the company’s sales is small — at 4% to 5% — because direct marketing as a distribution channel in the insurance industry still has a long way to go.

“I also want to build a customer relations business that the clients and people of Malaysia would be proud of. We want to be one of the early companies where customers can go online and check their policies,” he adds.

Toubassy says today, MetLife is ranked among the top five in most markets around the world in which it has a presence. “Only in Malaysia and other new markets like Vietnam, we need time to build our brand and then take it to the next step. At this stage, we use the MetLife brand to tackle all the issues that we have and to take us to the next level.”

But as far as Toubassy is concerned, he is in no hurry to get to the next level and race past other bigger insurers that have been here much longer and are six to seven times bigger than AmMetLife.

“Because when you become too aggressive in growth, that means you are losing sight of your customers. You are selling just for the sake of selling. (You are) coming up with products that don’t fit the customers’ needs and then you fall into the trap of mis-selling,” he says.

“To me, life insurance will always grow whether the economy is good or bad. As long as people continue to die, have accidents and fail to plan, life insurance would be there. It is just about reaching them,” he adds.

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