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GREAT EASTERN ANNUAL REPORT 2005 14

CEO’s Report
Great Eastern continued to be the market leader in the life insurance industry in 2005 with

The different chapters an improved market share of 23.3% in Malaysia.

The asset size of the Company grew to RM26.7 billion in 2005, an increase of 11.4% over
the previous year. Investment income increased by 7% to RM1.3 billion despite the low

of our life story… bank interest rate regime for much of the year. The profit attributable to shareholders for
the year ended 31 December 2005 is RM280.8 million. In 2004, the profit attributable to
shareholders was RM328.4 million which included the one-off profit of RM35 million from
the sale of OCBC Bank shares.

Gross premium income increased to RM4.1 billion with robust growth in the sale of
investment-linked products, which is in line with the Company's strategy to develop and
increase the market share for all business segments. During the year 2005,
the Company declared a One-Time Special Bonus of RM60.2 million, which was given to
some of the Regular Premium Whole Life and Endowment policies bought on or before
31 December 2003. This Special Bonus was given to close to one million of our policy owners.

With continuous growth in premiums and profits each year, the Company is largely on track
to achieve our vision of being the choice financial service provider in the region when we
celebrate our 100th Anniversary in 2008.

Customer Acquisition – Agency Management


The Company continued its focused strategy to grow the achieved via introduction of training programmes such as
investment-linked business for 2005 using our main Peak Performance And Continuous Excellence (for developing
distribution channel, i.e., the tied agency force. This resulted professional agents), besides other comprehensive training
in another double-digit growth in new business premiums for programmes and communication sessions to keep them
investment-linked plans (ILP) and more than 100% growth in updated on recent changes in guidelines from the regulators.
ILP policy owners.
Recruitment of new agents is an on-going process, and the
New initiatives and motivating programmes were introduced in quality of the new recruits has been improving each year via
2005 with the key objective to enhance productivity and increase the Company Organised Recruitment Programme and joint
sales for the 17,000 agents throughout Malaysia. Various graduate recruitment drives with Agency Leaders. Regular
mentoring programmes were launched to provide dedicated Business Opportunity Programme (BOP) had been
guidance and training for aspiring performers, e.g. the Great organised at all branches in collaboration with Agency
MDRT Achievers Programme, which is a mentoring programme Leaders. In addition, we have joined efforts with selected
for aspiring MDRT qualifiers/members and the Great ILP Agency Leaders to organise campus recruitment
Mentoring Programme, for developing ILP-focused agents. programmes targeted at recruiting final year graduates.

While new programmes were launched, existing and on-going Great Eastern and OCBC Bank have jointly initiated an Agent
activities were well-received by the members of the field force; Referral Programme in July 2005 to engage the field force in
who have been recognised as the most aggressive, vibrant selling Great Eastern-OCBC Bank co-brand Credit Card.
and professional field force in the market place. These new
programmes comprised orientation programmes for agents To ride on the strength of our field force, OCBC Bank is
that were promoted to a higher level, head-start and final sprint embarking on a joint initiative with the Company to promote other
seminars, sales and leadership enhancement workshops and loan-based financial products as part of its financial planning
the Annual Supremacy Award ceremony. initiatives. Our pioneer effort in this may pave the way for a
gradual transformation of our professional agents to full fledge
Agency Management continued its other key strategy of financial advisors.
continuous learning and structured recruitment to enhance
the professionalism and skills of the field force. This was
GREAT EASTERN ANNUAL REPORT 2005 16

2005 Agents' Honour Roll Bancassurance


Bancassurance started 2005 with the successful launch of a with our partner banks – Public Bank and others, to promote
Guaranteed Income Plus Plan with our partner bank, Public the Bancassurance business.
Top 3 Group Sales Managers with Investment-Linked Rider Top 3 Group Sales Managers without Investment-Linked Rider
Toh Chun Shiong Tan Lay Seong Tan Kuen Wei Tan Lay Seong Toh Chun Shiong Tan Soo Hin
Bank Berhad, in April 2005. Public Bank distributed a five-year
single premium endowment plan via all of its branches Throughout 2005, the Bancassurance team enhanced our
Top 3 Unit Sales Managers with Investment-Linked Rider Top 3 Unit Sales Managers without Investment-Linked Rider nationwide in Malaysia. All the tranches allocated were fully partner banks’ servicing via regular participation in their sales and
Chen Lai Li Cheng Wan Leng Mok Weng Onn Ng Heap Teik Mok Weng Onn Chuah Kang Boon taken up within a short period. marketing events. This included wealth management events
as well as joint marketing in property development launches.
Several measures were taken to further promote Mortgage
Reducing Term Assurance (MRTA) as an attractive and To strive for a broader reach of the market, Great Eastern has
Top 3 Career Agents with Investment-Linked Rider Top 3 Career Agents without Investment-Linked Rider
Gui Siew Luang Heng Shoou Ju Kiu Siu Ung Heng Shoou Ju Nalla Thambe a/l Ramasamy Serjit Kaur
competitive product in the market. This included the innovative secured new tie-ups with more partner banks, and this is
packaging of riders, and in particular our Refund of Premium expected to contribute positively towards MRTA sales results in
rider, which recorded encouraging take-up rates. Despite the the near future.
Top 3 Agents with Investment-Linked Rider Top 3 Agents without Investment-Linked Rider
Bo Chin Hoong Oo Huei Ying Goh Ek Sean Datin Teh Beng Swan Nagarajan a/l Ramasamy Chan Mui Lin
competitive market and other sales campaigns introduced
by competitors, the Company registered growth in MRTA sales The foregoing initiatives have resulted in a 30% increase in new
Top 3 Personal Producers with Investment-Linked Rider Top 3 Personal Producers without Investment-Linked Rider in 2005 as compared to 2004. This was achieved through the business premiums for 2005 over 2004 and Great Eastern is
Bo Chin Hoong Tan Kuen Wei Tan Lay Seong Heng Shoou Ju Nalla Thambe a/l Ramasamy Datin Teh Beng Swan innovation of products, which catered to the business banking well positioned to gear for the challenges of 2006 even as
segment and our continuing efforts in enhancing relationships market competition intensifies.

*MDRT Qualifying & Life Member *MDRT Court of the Table Group Insurance
Robert Cheah Booy (23 years) Ng Nyet Chin (qualifying & life member 10 years)
Teh Boon Sing (22 years) Heng Shoou Ju (qualifying member 9 years) Group Insurance had a great year, with new business growth throughout the year. Promotional activities with members of the
G Satheesan (21 years) Kiu Siu Ung (qualifying member 9 years)
of 30% in 2005 as compared to the previous year. field force, together with the strategy to penetrate new market
segments have sustained the growth momentum for this
Chang Chee Kiang (18 years) Kuan Sousa (qualifying member 9 years)
In 2005, the Reward Insurance Scheme (RIS) product reached business segment.
Mahalingam a/l Vellasamy (14 years) Lee Moi Chin (qualifying member 9 years) another significant milestone with enhancements in benefits.
Gan Sing Shoo (13 years) Ng Bok Her (qualifying member 9 years) During the year, efforts have been stepped up to increase For the employee benefit scheme market, Great Eastern
Chua Choh Wan (12 years) Tang Nyut Kiow (qualifying member 8 years) awareness of RIS via regular training and communication secured business by leveraging on the support of international
Lai Kok Fung (12 years) Datin Tan Po Moi (qualifying member 7 years) sessions. The teamwork and activities between members of pooling from two multi-national companies. The potential
Lau Kim Noi (11 year) Cheng Wan Leng (qualifying member 6 years) the field force and Group Insurance team have resulted in an growth for this market segment continues to be optimistic as the
Cheah Har Mooi (10 years) Yau Kim Choy (qualifying member 5 years) 82% increase in the number of customers. Malaysian workforce increases each year.
Subramaniam Ponnusamy (7 years) Chen Foong Ling (qualifying member 4 years)
Hua Chwee Lan (qualifying member 4 years)
The mainstay Group Multiple Benefits Scheme, with its low-
cost comprehensive cover continued to attract new business
*MDRT Life Member Ravi Doraisamy (qualifying member 4 years)
Michael Cheong Moon Lam (15 years) Leong Wai Haan (qualifying member 3 years)
Tan Poo Hong (12 years) Pua Han Nee (qualifying member 3 years)
Tan Yoke Chan (qualifying member 3 years) Marketing
Honour Roll Chen Lai Li (qualifying member 2 years) We started 2005 database marketing working with external the year to encourage cross-selling or up-selling activities with
G Satheesan Lee King (qualifying member 2 years) partners who own ‘young’ databases. During the year, Great sales promotions to our policy owners. It has resulted in a four-
Lo Lai San (qualifying member 2 years) Eastern also partnered Dumex and co-sponsored education fold increase in the premium generated through insights-driven
Ong Yeok Aye (qualifying member 2 years) plans worth RM380,000 for their “Building Better People” campaigns in 2005, as compared to 2003.
contest. The objective was to position Great Eastern as the
*MDRT Top of the Table
Jackson Ting Hwong Sui (qualifying member 8 years) Oo Huei Ying (qualifying member 2 years)
Tony Ng Keng Hong (qualifying member 8 years) Tan Wha Chong (qualifying member 2 years) insurer for young families with children. It created awareness CRM will continue its efforts as initial results have shown that
of Great Eastern amongst the general public and also these initiatives are effective in helping members of the field
Gui Siew Luang (qualifying member 6 years) Goh Ek Sean (qualifying member 1 year)
generated leads for our agency force. force. In addition, the campaigns have produced useful
Tan Lay Seong (qualifying member 6 years) Lawrence Tan Sau Poh (qualifying member 1 year)
customer insights for effective targeting and helped increase
Toh Chun Shiong (qualifying member 6 years) Since its inception in 2003, we have further established the brand affinity with the customers.
Wong Hang Yoke (qualifying member 5 years) Customer Relationship Management (CRM) initiative in 2005.
Tan Kuen Wei (qualifying member 2 years) This was achieved via insights-driven campaigns throughout
Bo Chin Hoong (qualifying member 1 year)

*Great Eastern proudly produced a total of 467 Agents in year 2005 who have met the MDRT production requirements.
GREAT EASTERN ANNUAL REPORT 2005 18

Product Development Human Capital


Our Company continued its efforts to provide our customers with Following the success of the Great SeniorCare launched in Besides being a key employer in the Malaysian insurance Great Eastern also offers scholarships to outstanding students
a good mix of traditional life insurance and investment-linked 2004, Great Eastern enhanced the product and launched the industry, Great Eastern has also been a pioneer in the education gaining entry into local and overseas universities. To support the
products for 2005. We introduced a buyback option to our new Great SeniorCare Plus, 50Care Plan and Great and development of the insurance industry professionals. Company’s expansion in the region, and also to gain better
accelerated dread disease product, Supreme Livin’Care Plus. GoldenCare Plan – which cater to the needs of the senior insights into doing business in China, we now offer regional
This new product in the market allows the policy owners the citizens market segment. With the onset of globalisation, there is increased pressure on the scholarships to students gaining entry into selected top
option to buy back the death benefit to the maximum amount of industry to employ technically skilled workers. The elite universities in China. The Company’s scholarship initiative has
basic sum assured in the event that he/she is diagnosed with any Products distributed via Bancassurance such as the Management Trainees Programme provides the talent pool of assisted 45 students with an investment of RM1.52 million since
one of the 36 illnesses covered under the plan. Guaranteed Income Plus Plan, and Great Lion Prosperity future leaders for our Company. By working closely with local and it started in 1998.
Plan, which are single premium endowment products were international universities, colleges and educational institutes,
In line with the changes in the guidelines from the regulators in also launched during the year. Great Eastern is able to draw its talents with backgrounds in A structured Performance Management System assists
2005, the product development team reviewed the prices of quantitative studies, actuarial sciences and technical disciplines. employees with their performance planning, development
some of the products such as the Supreme Livin’Care Plus, Great With such backgrounds, Management Trainees will be able to planning and appraisal needs, ensuring a comprehensive and
LifeCare, MultiCash Lion Endowment Series 3, GreatJunior appreciate more fully the business risks and be a better fit for the fair system for employees to achieve their goals and targets. This
Advantage Series 2 and Junior Advantage Rider Series 2. Company’s line of work. in turn provides clear direction on how rewards get delivered
within the Company.
Apart from attracting potential talents, existing talents in the
Company are given an education impetus through the Another initiative is the Job Rotation programme, which helps the
Company’s Education Assistance Scheme which supports staff Company build a multi-tasking workforce that is flexible,
Operations
The key operational departments in Great Eastern have an with emphasis on inter-departmental cooperation and agency in their Actuarial, Malaysian Insurance Institute, Accountancy and adaptable and easily deployable. This talent development
important role to provide continuous improvements to achieve relationship in delivering service excellence. other professional related courses through the reimbursement of programme prepares the Company for future challenges through
operational excellence. Besides on-going operations and the examination fees and books. on-the-job learning attachments.
efforts to meet the targeted customer service turnaround time, In a division where there is constant interaction with customers,
several other key initiatives were implemented. both front and back end, there is a need to ensure that the staff Complementing this scheme is the Company’s drive in As great efforts are spent in recruiting and developing talent,
are competent and knowledgable in all aspects of their job scope. motivating its staff to take up the Life Office Management Great Eastern also reinforces the need to recognise outstanding
The Company launched its electronic submission Association (LOMA) examinations. Reimbursement of talents through the Chairman’s Award. This annual award
(e-Submission) solution following a successful piloting phase in The Underwriting Support Department helps in this area with examination fees and books and an attractive award scheme recognises outstanding achievements across the board,
2004. The e-Submission solution is an alternative option for structured training for new solutions such as the e-Submission awaits staff who pass these examinations. culminating in a special award presentation during the
agents to submit insurance proposals online to cater to a and “Train-the-trainer” programmes. The Field Underwriting Company’s Annual Dinner & Dance.
growing segment of customers who prefer the convenience of Manual, launched in 2005, is a simple underwriting reference As a good corporate citizen, Great Eastern is committed to
online transactions and services. guide to help the agents understand standard underwriting developing staff with the right technical skills, who can play the A GREAT learning and development culture exists in Great
requirements, relevant ratings for hazardous occupation, role of a coach/mentor and develop leaders for the financial Eastern that supports and spurs outstanding talents to greater
At the Customer Service Department, several initiatives were avocation and the probable action needed under different services industry. The Company has also in place a structured achievements.
implemented to improve operational efficiency and customer environments for completion of a new business proposal. Practical Training attachment programme, which allows
service standards, e.g. a knowledge management system for all undergraduates from universities to undergo practical training
touch-points in Customer Service. The Agent Empowerment Similarly, the Customer Service and Claims Department with the Company. This win-win approach helps us to identify
Programme 3 was further extended at the Head Office and organised training and communication sessions at branches to potential talents for recruitment.
branches with the introduction of fast-track self-help counters and ensure that development of skills is also carried out at service
the implementation of Streamyx for faster connectivity between centres throughout Malaysia. All these efforts were made to
branches and the head office. The Great Service Culture ensure that excellent customer service will be provided at all
Programme was carried out for the third year at the Head Office times to our customers and policy owners.

Information Systems
Great Eastern continues its efforts to achieve operational information, carry out financial planning and conduct online
efficiency and improve customer service via enhancements in inquiries via the mobile network.
information system applications and infrastructure.
i-SmartSell Website via e-Partner – This allows agents to
Despite the challenges arising from the Company’s mainframe participate in the Company’s CRM programme in a convenient
migration project, the Information Systems team continued to and effective manner.
implement new projects to support agents and policy owners.
e-Statement – Provides summary and detailed commission
Some of the key initiatives and projects implemented for 2005 statements via e-Partner.
included the following:
Apart from new systems, Great Eastern invested in infrastructure
Enterprise Document Processing Solution – Great Eastern is enhancements to ensure improvements in application
the first life insurance company in Malaysia to implement an end- development, security of systems and database. The Capability
to-end and straight-through processing solution for the Maturity Model Integration and IT Infrastructure Library were
production of policy documents. With this solution the policy- started in 2005 to allow the development and technical services
document-binding process becomes cost effective and efficient, team to apply the best practices for application development. At
and plays a big role in improving customer service. the same time, the Enterprise Security Management System was
implemented to provide the team with the capability to have a
GEMobile Solution – This is a system that allows agents to use single view of various security exposure and indicators.
PDA (Personal Digital Assistant) devices to download customer
GREAT EASTERN ANNUAL REPORT 2005 20

Corporate Communications & Branding Risk Management


In the Corporate Communications area, the Company kick- To further enhance brand awareness, outdoor advertising The management of risk is an integral part of the Company's As part of the risk management process, the Management
started the year with the Great Eastern “Life is great!” National continued with unipole advertising at strategic locations in management practice. The Company has an established risk continues to be vigilant of the risk landscape with regular review
Dance Competition – a modern dance competition open to all Penang and Johor Bahru, and a creative advertising panel in management framework, which largely comprises a risk and monitoring of key risks.
secondary school students in Malaysia. Organised by Nanyang Jalan Damansara – which continues to be the ‘talk-of-the-town’ governance structure and a risk management process. The year
Siang Pau, Great Eastern was the main sponsor for the event in the Klang Valley area. New outdoor advertising activities 2005 saw the risk management framework undergo an Several risk awareness training programmes were also
and the objective was to promote arts and culture among the were implemented in Kuala Lumpur International Airport extensive review to determine the alignment of its various conducted for members of staff to reinforce the importance of
younger generation. This was one of the activities carried out departure level and advertising panels were placed at the components to the established structures and roles, good and effective risk management.
throughout the year to promote Great Eastern and the “Life is Kuala Lumpur Monorail station, which is now called the “Great procedures, policies and regulatory requirements. Under the risk
great!” philosophy in Malaysia. Eastern Station”. management project “RK20.12”, this framework now includes With all of our strategies and improvement programmes in place,
the setting of specific risk categories to facilitate more focused and barring any unforeseen circumstances, we are confident of
Other branding activities of the same nature included The Sun Great Eastern received the Reader’s Digest SuperBrands Gold and effective risk management and to provide a more achieving our centennial goals of growing our assets to RM40
Motor Hunt, The Torch Run Procession in conjunction with the Award (Insurance Category) for Malaysia for the second year systematic approach to the risk management process. A billion and a profit-after-tax of RM400 million in the year 2008.
22nd Malaysian Chinese Cultural Festival and the sponsorship of running. This status was awarded to Great Eastern for methodology for the aggregation of operational risks based on Thus, we are in line with our vision to be the leading financial
the Operafest Children’s Choir for the “Life is great!” Across receiving the highest ratings from consumers; voted the specific risk categories was also developed to determine the service provider in this region, recognised for our excellence.
Borders Charity Concert. quantitatively and qualitatively on five key attributes, i.e., operational risk exposure at various levels.
quality, value, trustworthiness, strong image and understanding
Following the success of the photo contest two years ago, Great of customer needs.
Eastern organised the “Life is great!” Photo Contest in the
second quarter of 2005. It received overwhelming response from The Company’s long-term charity project, ChildrenCare, had a
Alex Foong Soo Hah
Director & Chief Executive Officer
the public and winners were presented with their cash prizes in fresh new look when we organised a ChildrenCare relaunch at
28 April 2006
August during the prize presentation ceremony and exhibition of the start of the year. With the support of agents and staff, fund
winning photos. raising promotions continued to be held throughout the year to
create awareness for the Company’s charity project and to raise
The Company organised a ground breaking ceremony to mark funds for ChildrenCare. Other activities were held as part of
the beginning of the construction of Great Eastern’s new Penang ChildrenCare’s contribution to needy children, e.g. Staff/Agents’
branch office building in a heritage conservation site in Penang. Visit to Miracle Home and the ChildrenCare Outing to Aquaria
Targeted to be completed in 2007, Wisma Great Eastern Penang KLCC where children from five homes were treated to a trip to
will be a 5-storey office structure boasting a nett lettable space of learn about marine life.
82,000 sq ft.

Property
Our Branch Offices Investment Properties
The Company has continued its efforts to enhance its branch Great Eastern Mall, having established itself as the favourite
premises in terms of consistent branding and corporate neighbourhood mall in its vicinity, has continued to attract
image, and to acquire suitable properties to house our discerning patrons into its outlets. As at 31 December 2005,
branch offices. the occupancy of the shopping centre stood at 89%.

The Kuantan, Kluang and Tawau branch offices moved into Menara Great Eastern has reached an occupancy rate of
their new premises during the year. We have taken 96%, with the balance vacant space reserved for the
possession of the new Kuching property and renovation Company’s future expansion. Since the Company took over
works are expected to start by the first quarter of 2006. We Menara Weld on 1 June 2004, the office tower has enjoyed a
are expecting to take possession of the Bintulu property in healthy occupancy of 88% as at 31 December 2005. The
early 2006. re-positioning works to the retail podium are nearing
completion, with several tenants having started doing business
Construction work on the Penang building has been in progress in the centre. It is expected to be fully opened to the public by
since March 2005 and is expected to be completed by the first early 2006.
half of 2007. The proposed re-development to the Batu Pahat
property is also expected to commence in the early part of 2006. Construction of the 113 units of low-density luxurious apartments
behind the existing Menara Great Eastern/Great Eastern Mall
As at 31 December 2005, ten of the 24 branches are located complex has been progressing since July 2005. With its
in company-owned premises throughout Malaysia. expected completion in 2007, the Company’s aspirations of
owning a distinguished piece of real estate comprising an
integrated mix of up-market commercial retail, commercial office
and residential properties will become a reality.