2012

ING INSURANCE ASIA-PACIFIC

[ASSIGNMENT ON ING INSURANCE ASIA-PACIFIC]

SUNIL BHASKARAN NAIR 1711997 WORD COUNT : 3019 LECTURE INCHARGE : ANDREW GRIFFITH DATE : 19/04/212

PREFACE

SR.NO

HEADINGS

PAGE NUMBERS

INTRODUCTION

TERMS OF REFERENCE

ING INTRODUCTION

ING ASIA PACIFIC BACKGROUND

JACQUES KEMP

ING ASSESSMENT

CHANGES PROPOSED

EXPECTED CHALLENGES

COLLABORATION OF INGS BUSINESS UNITS

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ROLE OF INFORMATION SYSTEM

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CONCLUSION

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REFERENCE/BIBILOGRAPHY

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APPENDIX 1

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INTRODUCTION:
My name is Sunil Bhaskaran Nair; I am a 26 year old Indian student studying in Dublin Business School enrolled for my Masters in Business Administration specialized in Cloud Computing. I was asked to prepare an assignment on ING by the lecturer in charge of the module International Management.

TERMS OF REFERENCE:
Purpose of the Project: To give insight on the context of industry analysis for the company. Proposing changes and giving recommendations supported by an analysis. Discussing about the challenges encountered during the implementation of any suggested changes. Evaluating the potential for collaboration between different ING business units, particularly within the value chain.

ING Role: Balance score card for monitoring business development. Linking objectives and measures.

ING INTRODUCTION:
INTERNATIONAL NETHERLANDS GROUP (ING) is a globally recognized financial group that deals in Direct banking, Retail banking, Commercial banking, Insurance etc... The orange lion signifies the company logo. ING has been providing a wide range of Banking, Insurance and Asset management services in many countries from more than 150 years. ING a Netherlands based company started there global expansion in the late 90s there after expanding their operations in more than 45 countries throughout the globe. By 2003, ING had expanded itself with a workforce of more than 115,000 employees covered across 60 million private, corporate as well as institutional clients in nearly 50 countries. The main headquarters of the company is in Amsterdam, Netherlands. According to a survey conducted, ING was the largest financial as well as insurance company in the world in 2010 by revenue.

ING INSURANCE ASIA PACIFIC BACKGROUND DETAILS:

ING Insurance Asia Pacific Business units serves us with different types of life insurance policies, wealth management, retail management as well as company asset management products such as group life policy, accidental benefits, employee benefits etc., the company has a distribution network based on tied agents, career agents, banc assurance, telemarketing etc. conjointly having tie up with local companies, in order to enhance their distribution capacity. Ahead of the other European companies, ING was the first to enter the markets of South Korea, Japan and Taiwan, there after it was a fast growing company in Japan. ING major business units (countries) include Japan, Australia, New Zealand, Taiwan, Malaysia, Hong Kong and Korea. It also has some emerging markets in India, China, Indonesia and Thailand. In the year 2002, a shared regional service centers where developed in order to reduce the operating cost thereafter ING was able to get connected to its clients through their preferred channel. ING has a strong hold in two of the most emerging markets in the Asian region, the China and India. In India, it has 44 percent stake on the fifth largest private bank named ING Vysya Bank conjointly with life insurance as well as mutual funds business. By the year 2003, ING was ranked 5th among the multinational financial providers in the Asian belt with more than 6 million clients regardless of continuing declines in the global equity market in the year 2002.

JACQUES KEMP:
When I read the article, I was so inspired by, the way Jacques Kemps new strategy helped ING to improve the business process based on the balance score card and how it changes the roles and responsibilities of each of the respective department and improves relationship with customer and shareholders. The company relies on a standard template for balance score card for all its operations. This score card lays certain roles and responsibility to be fulfilled by every individual related to the organization. ING follows a Matrix Organizational Structure. This structure focuses on Asia Pacific region and thereafter two different teams organize the responsibilities, the Line Management Team and the Functional Management team. Line management team deals country wise where as functional management team deals with the different functions required to run the business within a country. In Line management, a country manager is responsible for deciding the budget, cost for the particular country as well as the profit and loss related to it whereas in Functional management, a functional manager provides support across the region and deals with the human resource necessities on that region. In the year 2002, Jacques Kemp was appointed as the Chief Executive Officer of the ING Asia Pacific Ltd. During his tenure, he developed a business model Towards Performance Excellence (TPE), which is widely being implemented in the ING organization.

ING ASSESSMENT:
I have observed that ING, after entering the Asian market by the beginning of 2000s, ING had a very attractive position in the Asia Pacific. INGs market share and rank where significantly high in countries like Japan and Malaysia. INGs integration of Aetna international (An American company) during the year 2000, was a major achievement that played a very distinguishable role in the strong position of the company in the Asia Pacific. Aetna International was four times larger in Asia than ING; its position was also very stronger. Although the Integration had its own set of drawbacks but ING Asia Pacific did benefit substantially from this merger. INGs operations( life and non life ) in Philippines, Singapore and Indonesia were sold as these countries did not produce the expected profit and also managing these countries required them to provide enough resources to comply with INGs standard, as ING already had enough potential market and profits coming from 12 other Asian countries. The asset management operational rights in these countries where still with ING. Activities of ING where organized in business units (countries) with each individual units having a high level of autonomy. Hong Kong regional office was the monitoring center of ING but there was some difference between the centre and the business units. Difficulties where apparent in managing the same level of standard as every region had there on priorities as well as ideas, also there was very less communication between the between the business managers, regional managers and functional managers (see appendix 1). The hierarchy or the flow of power from down to up had a regional structure. Each region was segregated into four countries, managed by one or two regional general managers or the executive committee member thereafter passing information to the Regional CEO. Overall the communication between these hierarchies was a little complicated such as the Security manager of a business unit would report to its countrys manager and not it the regional security manager. On request the country manager would send the report to the regional security manager. Each and every country have their own styles of organizational structure, characteristics and working custom for example: countries like Taiwan, Japan and Hong Kong have established themselves on the product lines on the other hand Australia marketed itself stating that it provides all the financial solution required. This different style of working was apparent in each and every business unit. Corporate wide approach was not been applied, the potential benefits of applying such approach was scarcely adopted.

CHANGES PROPOSED:
While reading through the case, the very first thought that crossed my mind was how did the company manage to flourish in the Asia Pacific without any proper communication being maintained between the Dignitaries of the organization? The following are the key issues I came across:
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1. Reporting problem (no standard format) 2. Uncertain objectives(individual approaches)

Reporting system: Communication system is one of the most important changes to be implemented so as to spread the right message, strategy as well as to keep each one of the managers updated on the movement of the company. This can be achieved by regulating a reporting systems in place where in each agents is asked to create a weekly report based on the interaction with the customer or client and even the amount of policy he was able to sell thereby sending this report to his superior through an email. This report should be prepared in a standard format throughout the region. This information starts to flow from down to top thus the country manager receives an idea about the progress in different regions in the country. This report can be then used by the regional managers in order to evaluate the potentiality of the country as well as to identify the areas of improvement. All this reports are then stored in a centralized system which would have a online website interface through which managers from the regional office would be able to access the required information, thus avoiding the current system- report available on request. This information can be used by the functional manager to analyze the working of the particular function. This report can also be used to analyze Pay for Performance. Set Objectives: Regulate roles and responsibilities for each designation and set goals that can be achieved through a common approach. Each manager has to understand and adopt the responsibilities given to them and identify the approach required to reach the goal. Each manager then is responsible to regulate objectives to their sub-ordinates and to monitor the working of agents in his region. Certain other recommendations for improving brand image, customer and employee satisfaction is given below: Public Relation Department: Another change that can be implemented is involving a Public relation department .Public relation forms a vital part of the company. A public relations department will take care /look after all the relations between B2B and B2C that a company has. It also plays a very important role in earning new relations. A PR department helps deal with all the problems and concerns of both the internal and external public. Internal public forms the 1st public that a company deals with. Better communication with the employees as well as solving their grievances and making them feel an important part of the company gives them the feel of ownership. This forms the basis of a successful company. This communication can be done through company journals, salary letter, notices, announcements, etc. The PR department is also responsible for company's
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external communication with its different publics like shareholders, consumer, distribution, etc. This takes place through press conferences, yearly magazines, letters, etc. It thus helps the different publics having the right perception about the company. It has the power to change the brand image of the company. A lot of communication between different countries can be looked after by 1 PR Officer handling whole of the Asia - Pacific.

Employee Benefits Scheme: Employees in our organization form our first public. If the company can keep them happy and content; so will it be with its customers. The idea is to first give our insurance policies to our employees. A very minimal part of their salary will be taken and also special in-house offers only for the employees. The amount and type of insurance will be selected by them from the plans offered to them as per their post in the company. Thus a life insurance plan will not seem a burden to them and after retirement will act as pension. If the employee quits the job, he has the option to continue the policy but with normal offers. Thus the employees would spread a positive word of mouth unintentionally about the policies they are selling. It would be more like a firsthand experience and people will thus trust them more than a salesman.

EXPECTED CHALLENGES:
1. Reporting system would require an IT infrastructure wherein they will have to develop a Database and store this data for analysis. This can be a cost effective factor for ING as well as the employees have to be educated about the new standard format for the reports. This would be a challenging situation as the employees had become comfortable using the previous format for reports. But this will contribute to the corporate wide approach.

2. While setting objectives there is a chance of objections coming from the regional managers as they would say that there region is giving the required outcome, so this new objectives and rules would be a little extra responsibilities as well as now they have to maintain a common goal.

Public Relation Department:

There is not much disadvantage in having a PR department in a company besides the cost factor. If you actually go to see, the PR department does not actually sit back and make those notices or letters, house journals, etc. Nor does it distribute the same. Similarly, it does not actually listen to the grievances of the employees; it is done by the HR department. Thus some feel that having an extra department for PR is nothing but increase in expenditure and employees. This can create a very challenging environment as some dignitaries would be against the idea of involving a PR department. But there are certain things that cannot be done without the PR department like the PRO forms the spokesperson of the company. It looks after the brand image of the company as a whole. It helps in letting more and more people know about the company and thus increase business. It gives solutions when the company is facing any kind of adversity. Thus the PR department actually works in coordination with all the other departments in the company. Employee Insurance: A lot of hard work will go into reforming the job policies. For e.g.: 1. 2. 3. 4. After how much time can an employee be eligible for the insurance? If the employee leaves the job in between, then what should be done? What different offers should be given to different salaried group of employees? How much will be the minimal amount from their salary and how much benefit will it give the company?

A negative point here is that, if its compulsory for them to buy a policy, it may result in negative word of mouth. Without a proper and complete research we cannot determine how much benefit the company will make through word of mouth because not all the employees will go around boasting about the same. Every employee thus has to be a marketer for the company's insurance policies. A larger staff will be required to handle a larger number of databases and customers.

COLLABORATION OF INGS BUSINESS UNITS:

Collaboration of business units would require each individual unit to communicate with each other as well as should also have a common approach. As I have discussed about the reporting systems in the recommendations, this system is one of the supporting services that can help the business units to collaborate as well as help fulfill the organizational goal of corporate wide approach. There can also be a potential collaboration between the countries if they use common website for the company as well as most of the products such as life insurance and medical insurance are common in the Asia-pacific region. Within the Value chain of INGs Insurance Asia-Pacific, the common process would be product designing, IT functions, Human resource as

well as the Marketing process. These supporting services in the value chain have a greater potential of collaboration between the business units.

ROLE OF INFORMATION SYSTEMS:

An information system is basically a combination of Information Technology and business activities that support operations activity, management strategies and decision making. Information system is normally said to be a back bone of the company. Every company has to integrate their business process into this information system so as to generate the best result. These systems are said to be communication systems where the data is represented by processing it according to the query. Role of Information system in reporting system: Information system plays a very important role, if the recommended reporting system needs to work. This system is the sole operator that generates pay for performance. Every employee creates a weekly report about his sales and communication that he covered and sends it to his superior for analyzing. The superior then upload this report in the information system, thus giving us an overview of every employees leads generated. So the reporting system has to be integrated within the information system to generate the Pay for Performance. Role of Information system in Public Relation: The back end system of the information system is a database that stores all the data we have entered. This data is then processed by the information system and generates the result according to the query. Public Relation department normally deals with advertisements, company journals, newsletters and all sort of advertising related media. So for these advertisements, the PR department needs to conduct data mining to identify the odds for example: the PR department has to identify the employee of the year and needs to publish in the news letter. Role of Information system in Employee Benefit scheme: When ING decides to develop an employee benefit scheme then this information about the scheme and the premium involved in it needs to feed into the information system in such a way that once any employee is enrolled for the scheme then the same information needs to be reflected in the employees profile. This role of information system needs to be altered to the requirement.

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CONCLUSION:
During analyzing this case, I came across different types of issues related to communication and reporting system as well as the hierarchy heterogeneity. I was forced to vision myself in the shoes of Jacques Kemp and the pressure of being the CEO of ING. This force compelled me to recommend many suggestions which I think it was very necessarily required to redirect all the business units to achieve the corporate wide approach. During this case I learned how to do the necessary research required during implementing a strategy and how it affects the budgeting as well as the employees of the organization. My decision making ability was put to test conjointly enhanced to an extent. It also enhanced my ability to understand the graphical representation of the strategys and statistics along with hierarchal interpretation. Understand of hierarchy and its advantages and disadvantages as well as line management and functional management with respect to it was a learning program and a new concept of balance score card and its effect was a significant impact on my intellectual preference. Overall this assignment enhanced my management ability, research skills and instincts.

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REFERENCES:
http://en.wikipedia.org/wiki/Information_system http://en.wikipedia.org/wiki/Information_system http://ingworld.ing.com/m/magstream/ingworld/en04/assets/en04/8db6_ING%20Insurance%20%20Asia-Pacific.pdf http://www.ing.com/Our-Company.htm?countrycode=IE http://en.wikipedia.org/wiki/ING_Group

BIBILOGRAPHY:
Kaplan R. & Norton D, (2006) HOW TO IMPLEMENT A NEW STRATEGY WITHOUT DISRUPTING YOUR ORGANIZATION. Harvard Business Review.

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APPENDIX 1:

SWOT Analysis:

Strength

Weakness

Opportunities

Treat

1. Good Stronghold in Asia Pacific 2. 150 years of experience 3. Enough resources in terms of agents, tie up with companies etc.

1. Communicatio n problem between the hierarchy 2. No common approach

1. Takeover of Aetna Internation al 2. Merger with fifth largest private bank in India

1. Communication barrier

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