AIA targets Great Eastern agents in $100m hiring spree
Mass poaching not seen as a positive practice by financial experts
New kid on the block AIA Financial Advisers (AIA FA) is on a hiring spree for agents, with Great Eastern (GE) the latest casualty in the poaching battle among insurers.
AIA FA is said to have offered $100 million to entice GE's 400 or so agents - who operate under the so-called Advisors Alliance Group (AAG) - to jump ship. AAG is an agency unit at GE.
More than 300 GE agents have apparently decided to join AIA FA, likely making it the biggest one-off act of poaching seen in the insurance sector here.
It will dwarf last year's mass exodus when Peter Tan Organisation founder Peter Tan led 250 agents from Prudential Singapore to join rival insurer Aviva.
AAG's founder, Mr Tan Koon Chuan, is himself leaving GE for AIA FA. An insurance veteran, he joined GE 40 years ago in 1977 and is now a senior executive director.
The ball started rolling when AAG invited its 400 agents to attend a three-day "seminar" in Batam from Aug 29 to Aug 31, where the benefits of the new firm were extolled. Many agents signed the "migration contract" on the spot.
The offer to the GE agents included sign-on bonuses and a five-year "bond" period where the monetary incentives could be clawed back if sales quotas are not met.
AIA FA said the new firm has been receiving strong interest from "a diverse range of candidates". "This includes our own AIA-tied agency, professionals within the financial industry and career switchers new to our industry," said AIA FA chief executive Tan Chuan How.
He said: "AIA FA adopts sound recruitment practices to protect consumers' interests and strongly advocates that packages offered to experienced representatives should be commensurate with each individual's qualifications, track record and experience."
"AIA FA adopts sound recruitment practices to protect consumers' interests..."AIA FA chief executive Tan Chuan How
GE said that some agents recently resigned, but it declined to comment on where they moved to.
AIA FA is a wholly owned subsidiary of AIA Singapore that will begin operations in the fourth quarter of this year. It was set up to expand AIA's distribution channels and complement its large agency force.
Financial experts do not view the latest development as a positive practice as it may result in potential mis-selling by agents under pressure to meet sales targets.
Insurers may also increase premiums or reduce cash values to recoup the costs related to such poaching activities.