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Making their mark in Singapore
- Tetsuro Akagi, Senior Vice-President, NEC Corporation and Chief Executive Officer, NEC Asia Pacific
- Lance Tay, Chief Executive Officer, Tokio Marine Life Insurance Singapore
Moderator: Francis Kan
REPRESENTATIVES from two large Japanese corporations with operations in Singapore speak about their companies' activities in the Republic.
The Business Times: What have been the key milestones of your company's operations in Singapore?
Tetsuro Akagi: Singapore is the Asia-Pacific regional headquarters of NEC, and we have a long business history in this region since almost 40 years ago, achieving many firsts for innovative technological breakthrough in Singapore and elsewhere in the region.
In fact, the installation of the satellite earth stations on Sentosa in 1970 was one of our earliest projects for NEC in Singapore. This laid the groundwork for the development of the country's telecommunications industry.
NEC Asia Pacific pioneered the use of biometrics for citizen services in Singapore since the 1990s. NEC established its Global Safety Division and Cyber Security Factory in Singapore in 2013 and 2016 respectively.
Lance Tay: Tokio Marine is the only Japanese life insurer in Singapore and is recognised for its unique retirement solutions, catered to the country's rapidly ageing population. Tokio Marine Life Insurance Singapore (TMLS) has also recently achieved Monetary Authority of Singapore (MAS) Tier-1 Significant Insurer status in Singapore, thanks to the strong support from our customers, business partners and staff. This is achieved when a life insurer reaches an asset under management size of S$5 billion.
Other key milestones achieved over the past five years from 2010 to 2015 include growing our agency force manpower by a compound annual growth rate (CAGR) of 22 per cent, which outpaced the industry CAGR of 3 per cent over the same period.
We have also expanded our corporate social responsibility efforts significantly. This year, we held our second mangrove-planting reforestation initiative at the Sungei Buloh Wetland Reserve, in line with our parent company Tokio Marine Holdings' global efforts to protect the earth. We have also partnered various local non-profit organisations, including the Alzheimer's Disease Association (ADA) and Disabled People's Association (DPA), in thinking and acting positively for the community through raising awareness about conditions such as Alzheimer's Disease and disabilities.
BT: What is the attraction of Singapore to Japanese companies?
Tetsuro Akagi: Singapore has long been recognised as a key regional business hub due to reasons such as its strategic location, competitive economy, good infrastructure and pro-business laws and regulations which are attractive to many foreign investors, including Japanese companies.
The government's ongoing initiatives to embrace new business creation and innovation, international collaboration with local and foreign companies, as well as investment in innovation-driven solutions bodes well for NEC as we are constantly pushing the boundaries of science and technology together with our customers to improve the lives of people around the world.
The strong bilateral relations and friendship between Singapore and Japan has also encouraged many companies such as NEC to continue to invest and gain greater market share in each other's economies.
Singapore is one of the most liveable countries in the world, and I believe this is also an important reason for Japanese companies to expand their footprint here.
Lance Tay: Singapore is attractive to Japanese companies for various reasons, including its business environment, talent pool and geographic proximity to all Asean countries. As one of the most business-friendly countries in the world, Singapore is naturally alluring as a choice destination for Japanese companies looking to gain inroads into South-east Asia, which remains one of the world's fastest-growing regions.
Thanks to its relatively open immigration policy and strong education system, Singapore is also home to a multi-cultural, highly educated and productive workforce, which appeals to Japanese companies in their overseas ventures.
BT: What challenges are you facing in the current business environment?
Tetsuro Akagi: NEC has been operating in Singapore for close to 40 years, and a challenge is how to sustain our business for the next phase of our growth. Business operating costs are constantly increasing every year, and we are continually seeking ways to keep costs low.
It is always a challenge to find good talent in the ICT (information and communications technology) industry, and I'm pleased to note that Singapore has always placed great emphasis on education and groomed professionals for the trade. It has also recently placed greater focus to foster innovation among the public and private sectors.
Lance Tay: The speed and impact of the regulatory changes along with the need for insurance companies to quickly adapt remains a key challenge for us. Since 2013, our regulator has introduced many new regulations including Anti-Money Laundering, Technology Risk Management and Enterprise Risk Management regulations that enhance the governance of insurance companies.
In addition, the Financial Advisory Industry Review (FAIR) and the proposed Risk- Based Capital 2 framework (RBC2) are among the most impactful regulatory changes. The main objectives of FAIR are to enhance the professional standing and competence of financial advisers as well as to create a more efficient system for the distribution of life insurance and savings products.
The proposed RBC2 framework may lead some insurers to reconsider their product portfolio mix by steering away from the traditional participating products with high guarantees as the new framework requires higher capital from insurers to back such plans.
This can be a trade-off to consumers as it could limit the attractiveness of products offered by insurance companies. Further consultation on RBC2 is being carried out, and it will be implemented only after a thorough calibration and assessment process. At TMLS, we are confident that the new capital framework will be fit-for-purpose.
BT: What plans do you have to expand your presence here?
Tetsuro Akagi: As the regional headquarters for NEC in the Asia-Pacific region, NEC continues to invest in our R&D (research and development); and in 2013, NEC chose Singapore as our fifth location to set up our R&D laboratory.
In the same year for the first time outside Japan, NEC set up its Global Safety Division in Singapore. With the establishment of the lab and the Global Safety Division, NEC hopes to use Singapore as a springboard to deploy the solutions developed by our laboratory in Singapore and beyond the Singapore shoreline.
Our participation in the smart nation initiatives and our many ICT implementations in both public and private sectors is a demonstration of NEC's strong commitment and presence in Singapore.
Lance Tay: Leveraging our new status as a MAS Tier-1 Significant Insurer, we are looking to expand on our strengths, especially our Retirement Solutions and Protection businesses. This year, we will also continue to work on growing our Agency Force and partnership channels, which have been a key factor in our success.
Digitalisation is another key focus for us. We are currently developing a single portal for our customers, where they will be able to view both their life and general insurance policies in a secure Web environment. This will enable customers to review and update their personal details at their convenience, and will also drive data analytics, which will help us in coming up with customised solutions for our customers.
BT: In what ways can Singapore and Japan further deepen their ties?
Tetsuro Akagi: Japanese technology continues to be highly sought after in many areas of business. NEC has always been at the forefront when it comes to technological innovations, many of which are related to environmental protection. NEC will continue to align and work closely together with the Singapore government to identify and solve social issues with our strong foundation in technology and R&D.
We will also continue to co-create with enterprise businesses such as retail and hospitality, transportation, health care and elder care with our advanced technology and solutions, to create value and realise a safer, brighter and more sustainable future.
Lance Tay: Besides trade and economic relations on the government level, Japan and Singapore can further deepen their ties through the mutual exchange of common learning experiences on a corporate level, which will drive innovation and business development in both countries.
To promote cross-border exchange of best practices, Tokio Marine Group conducts a regular ideas exchange programme for our promising leaders. In 2015, our Global Leadership Development Programme sent employees from Singapore and 12 other countries to our Sendai branch in Japan to witness the destruction caused by the 2011 Tohoku tsunami.
An open sharing session after the tour allowed our Japanese colleagues to demonstrate the way that Tokio Marine Insurance came together to help the Sendai Branch process more than 50,000 claims for the impacted clients within two months.
In our efforts to complement the government's plans to tackle the challenges of a shrinking and ageing population, TMLS has been actively exchanging key learnings with our Japanese counterparts, who have experienced the same demographic shift in Japan.
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