We reproduce excerpts from an interview with David Hampton, CEO of GIO Sanmar and General Manager (International Development), GIO Australia Holdings Limited published in The Economic Times, Chennai on June 10, 1999.
David Hampton
David Hampton, CEO of GIO Sanmar and General Manager (International Development), GIO Australia Holdings Ltd, is serious about the Australian insurance giant’s rendezvous with India. “We will be disappointed if the Insurance Bill does not go through, but India is a big and important market and we are patient enough to wait,” he told The Economic Times in Chennai.
His visit to India is significant in the context of GIO undergoing a change in its equity structure with AMP, another global player from Australia, acquiring 57 per cent stake.
Hampton joined GIO Australia as group treasurer and has been responsible for fund management activities in excess of $ 3 billion in diversified portfolios. He has been involved in managing Asian businesses for the last three years and is Chief Executive of GIO Sanmar since 1998.
GIO Australia has teamed up with the Chennai based Sanmar group for jointly working in the areas of insurance, asset management, bonds
trading, share broking and risk management services.
With AMP having acquired a 57 per cent stake in GIO, has your strategy for India undergone any change?
AMP and GIO share a similarity in product range which includes life and general insurance and pension fund management in Australia. At this stage, we have a parallel strategy for India. GIO will focus on the retail market in a big way. In Australia for instance, we have a customer base of two million.
Do you have a specific plan for India’s retail segment?
The range of financial products available in India is becoming complicated. Things will become less bank-centric. In Europe and other markets we have found that the location and number of branches are a less important factor. Financial services are very susceptible to changes in technology. We believe that a range of distribution channels is appropriate for India. But the important thing is to understand the target people.
Basically, the real Indian market is around 30 million - 40 million and not 300 million. In Australia, we conduct investment roadshows and analyse the need, income flow and savings ambition of our customers. In India, we’re talking to market research people for feedback on customer profiles. In retail services, distribution is the key element and technology will narrow down the time of business.
How fast does technology work in assessing claims and in settlement?
In Australia for example, if a car meets with an accident, the assessee surveys the damage on tape which is captured by a digital camera on location. Clients are assisted on the spot.
Assessment is done across the table and claims are settled within a swift time frame. Besides, we have done away with paperwork. Enquiries are taken through telephone, a sophisticated system generates the policy and clients can pay through credit card. In India, its effectiveness will be known only when implemented. However, the distribution channel will be a combination of Internet, an interactive voice response system and physical distribution.
Could you throw some light on your proposed asset management activities?
Asset management is a 7-10 year payback in India. In financial services, whether insurance or mutual funds, the crux is how effectively one manages the funds. Successful businesses reflect investment performances and it’s a core skill we need to develop here. We will most probably set up an internal fund from accruals from our other businesses; mainly insurance. Both asset and risk management services should be in place once the insurance business comes through.
Risk management is still nascent in India.How do you propose to develop the market?
In India, we will have to start with physical risks. We need to look into the sort of things that could happen to businesses which could have an impact in the bottomline. We will look into the sort of lines of credit, liquidity in balance sheets, people and assets.
How significant is India to GIO, vis-a-vis other markets?
The Indian economy is growing at 5-6 per cent and has enormous potential to tap. It has been resilient to the South East Asian crisis and has a reasonably sophisticated financial services market. Although we might have a few hiccups along the way, we’re bullish about India in the long term.