Explosive IPO a launching pad for AIA success

Mark Tucker

After securing one of the world’s most successful initial public offerings (IPO) on the Hong Kong Stock Exchange in late 2010, AIA is now the largest independent, listed pan-Asian life insurance group worldwide. 

Mark Tucker, AIA Group chief executive and president, talks to VIR’s Duong Kieu about how the company is gearing up for a strong position in the region and Vietnam following that record-breaking IPO.

In the financial and insurance sectors,  you are considered a “trademark of success”. AIA’s IPO is said to be principally attributable to your appointment in 2010. Does the great success of the IPO place any pressure on you?

AIA’s listing on the Hong Kong Stock Exchange broke new records. It is the largest IPO in Hong Kong’s history, the third largest IPO in the world and the largest IPO ever in the insurance sector.  But I think it’s worth taking a few steps back.

It had clearly been a challenging time for AIA for many years, but AIA  has been and remains a very strong business with a large customer base, strong operationally, strong financially and also strong, capable people. We approached the IPO with the substantial backing of very valuable ‘assets’.

We have 91 years of history. We have great people. We have a great agency force. We have enormous financial strength, and we have a unique business model. We are 100 per cent focused on Asia and on retail financial service.

Our business is enormously strong and because we are focused on the fastest growing Asian region, there is great growth potential for us. This makes us unique in many ways. When we talked to investors, they found AIA a very attractive investment opportunity. No other company is like us.

In short, the record breaking IPO is attributable to a special combination of a great team, a great company, good mutual support and everyone working together. But after the IPO, the important thing is the ability to draw a line and put the past behind us and to form a united line going forward. After the IPO, the company is independent, financially strong and has great people so the opportunity for us is both unique and exciting.

Investors have given you a vote of confidence with an expectation of good returns. Can you share your strategies in meeting these expectations?

Our investors have joined and become very strong supporters. The majority of our investors understand that we are trying to build and grow the business for the long term, not just for tomorrow. AIA has been around for 91 years, and certainly we want to be around for another 91 years, at least. So I think we must continue to build a very solid foundation.

So, we must build a strong distribution system. We are focusing on creating a premier agency  to have the best agents in the region with the highest productivity and professionalism. We have a great team already in place. We are looking to be innovative in products to ensure that we can look after customers’ needs.

Being a business that covers so many markets, we have to  think operationally about how we can drive  synergy across the business and drive cost down. We have to think about how we develop people in the businesses. So multi-strategies across different areas, different functions,  including products, distribution, customer services, operation and finance on at least four or five dimensions for us. There have been much to do then.

Going back to your great IPO, is there any advice you would give to Vietnamese companies that want to go public?

I think each company is different, each time frame is different, and each stock exchange is different. However, notwithstanding the differences, I think if the fundamental is strong, if the company’s results have been consistently good, and if the company has clear strategies and direction, if the company has good leadership and management, and good governance, it already has the basic fundamentals to go public.

Going public is not something very complicated, but again the company should have clear vision, clear strategies, clear leadership, and a clear path to the future. Then the shareholders and investors will find it an attractive proposition to support.

How important is Vietnam to AIA? Where does it stand vis-à-vis other markets?

Vietnam is a very important market for AIA. I have worked for many years in Vietnam and I know what is the potential of this market given its demography, urbanisation, industrialisation, and the increase in propensity to buy insurance. All of these factors are enormously attractive and important.

We are a long-term business and this country is a very important place for us. As to other markets, I must say that each country in Asia is at a different stage of economic development. Some other places like Hong Kong and Singapore are more established, therefore, the growth rate there would not be as exciting as Vietnam.

Overall, each of the 15 markets in which we are operating has its own incredible potential and opportunities for us to grow. That is what makes it so exciting to be here --- no other part of the world is like this, no other region as such upside growth opportunities.