Great Eastern Group CEO shares FY19 results, potential impact from COVID-19, and successful distribution

| 20 Feb 2020

Great Eastern Holdings has announced its financial results for the year ended 31 December 2019. Asia Advisers Network brings you the highlights, what Group CEO Khor Hock Seng said about the potential impact of the coronavirus to business and his views on what consumers look for when it comes to distribution.

Highlights of Financial Results

(Source: Great Eastern)

Total Weighted New Sales saw marginal growth of 1% y-o-y to S$1.26 billion. New Business Embedded Value (measure of the long-term profitability of new sales) grew 15% to $616.3 million as a result of a product mix shift to more protection products with a greater focus on narrowing protection gaps.

Profit Attributable to Shareholders saw a jump of 36% from $740.7 million to $1,003.8 million led by Profit from Shareholders’ fund growing by 290% to $259.4 million, as a result of higher mark-to-market gains in equities and collective investment schemes, and non-operating profit growing by 110% to $80 million, due to better investment market performance, offset by higher valuation of long-term insurance contract liabilities as a result of a decline in the discount rate used to value these liabilities.


What’s ahead?

Indonesia is a growth engine with exciting opportunities for the Group moving forward, said Mr Khor.

In May last year, the Group’s wholly-owned subsidiary, Great Eastern General Insurance, successfully completed the acquisition of PT QBE General Insurance Indonesia. It is still early days, he said.

Mr Khor Hock Seng

Mr Khor had said then on the acquisition, “The addition of the general insurance business fits in with our business strategy to further grow our business and footprint in a country which has the largest and fastest growing economy and the largest population in ASEAN with over 260 million. Together with our life subsidiary PT Great Eastern Life Indonesia and our partners, including Bank OCBC NISP, we look forward to providing a comprehensive suite of both general and life insurance solutions to better serve the needs of the business community and consumers in Indonesia.”


On COVID-19, Great Eastern recently rolled out a $1 million holistic support package to help its customers should they be affected by COVID-19. It also contributed $200,000 to provide financial assistance to those in Singapore affected by COVID-19 through the Courage Fund, facilitated by the National Council of Social Service (NCSS) and Community Chest.

Asked about the potential impact of the novel coronavirus on business, Mr Khor said it is too early to tell.

People could have a greater urgency and become even more aware of the need for insurance but slow down would be expected if the situation is prolonged.

Read also: Novel Coronavirus:Insurance coverage and measures by insurance industry

There would be an impact but the magnitude of it can be managed, he said. “We made dynamic shifts in 2019 by driving more innovation in its services and products. We transformed our agency channel and raised the bar on customer experience by empowering our financial representatives with a suite of digital agency tools under the Great Digital Advantage platform.”

What consumers look for

On the distribution front, in Malaysia, Great Eastern's Agency accounts for 82% of the channel mix. In Singapore, Agency accounts for 48% and Bancassurance 49% due to the strong presence of OCBC Bank, its bancassurance partner and parent company, in the lion city.

On what consumers look for when it comes to distribution channel, he said it boils down to two key elements: convenience and good advice.

Other than convenience, consumers value good advice before committing as insurance is a long term contract. And agency/FA and bancassurance offer both convenience and advice, he said.

He highlighted the need for representatives to futureproof themselves through training and tapping on digital tools, and for customer experience to continue to evolve and improve. In addition, the need to cater to different consumer needs, including those who prefer direct or online.   

He said: “Our strong agency force and synergistic bancassurance partnership with OCBC Bank continue to be a key driver of our success as we harnessed the channels to deepen and broaden market penetration.

“We also deepened our reach in the region, through our partnership with Axiata Digital Capital in Malaysia and Indonesia; and Singtel in Singapore, complementing our digital affinity partnership strategy in the region.”

In conclusion, Mr Khor said: “Moving ahead, we will continue to strengthen our business model and build a resilient and sustainable business for the long term.”

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