This interview is part of the Leading Asia series, which features in-depth conversations with the region’s most influential leaders on what it takes to lead in Asia today.
Asia–Pacific’s changing demographics, growing middle class, and insurance protection gaps are just a few trends shaping opportunities and challenges in the region’s life and health insurance markets. There is clearly ample room for sustained growth in these markets.
Lee Yuan Siong, AIA group chief executive and president, believes his company is uniquely positioned to capture the tremendous growth opportunities across the region for life and health insurance. “AIA is exclusively focused on Asia, operating in 18 markets, and we have been in many of these countries for close to a century,” he says. “And this has given us the deep local knowledge that can help us navigate their particular challenges and realize the enormous potential for our business.” His confidence is rooted in AIA’s rich company culture, operating philosophy, and ongoing investments in technology.
In its 2023 financial year, AIA’s value of new business, a measure of expected profitability from new-business sales, grew 33 percent to $4,034 million. The group’s annualized new premiums also increased by 45 percent, to a record high of $7,650 million.
Leveraging its position as the largest publicly listed pan-Asian life insurance group, AIA has set itself a bold target: the AIA One Billion initiative to engage a billion people across the region to live healthier, longer, better lives by 2030.
In this Leading Asia interview with McKinsey’s Bernhard Kotanko and Gautam Kumra, Yuan Siong discusses the evolution of the Asian insurance market, what makes AIA unique, and the power of insatiable curiosity and a strong network.
An edited transcript of the discussion follows.
Navigating critical career moments
McKinsey: Can you share a bit about the journey you’ve been on and how you got to where you are today?
Lee Yuan Siong: My career over the past 35 years has been shaped by a few critical moments.
The first was when I chose to go into insurance, which hasn’t always been seen as the most exciting industry. But I liked the idea that this was an industry that, at its core, is about creating shared outcomes and providing a social good—we are there when customers need us the most. By risk pooling, the insurance industry generates value for all stakeholders and creates a win–win for society at large. That’s still very important to me.
The second was when I decided to move from Singapore, where I was born, to work in Mainland China. This was back in the 1990s, when China was in a very early stage of development. The move took me out of my comfort zone—the insurance industry was in its infancy, which gave me the chance to see the exceptional long-term prospects in the country firsthand.
The third was when I moved from Prudential Plc, an international company operating in China, to Ping An Insurance Group, which had a vast nationwide reach in the local market. When I joined Ping An, I was excited about the opportunities to collaborate with talented colleagues and the potential to build something great.
Finally, the biggest step was joining AIA, which made me feel like I was returning to my roots. Having the opportunity to draw on everything I have learned in my career to contribute to the development of insurance across this incredible region really appealed to me.
McKinsey: That sounds like a very purposeful set of choices. In hindsight, how much was really planning and how much was grasping opportunities when they came?
Lee Yuan Siong: That’s a good question. In my case, it was a combination of the two. I always tell young people to focus on where the long-term opportunities are because this will give them the courage to seize the right opportunities when they come. And they will come. We—and especially those of us who live in Asia—are lucky to inhabit a world with lots of possibilities. I am tremendously optimistic about the future.
AIA and the Asian insurance industry
McKinsey: Can you tell us a little bit about where the Asian insurance industry is at the moment and the developments that excite you?
Lee Yuan Siong: AIA focuses on life and health insurance. We operate in 18 markets in the Asia–Pacific region, which is the best place for us to be. The region is characterized by low insurance penetration, large protection gaps, growing wealth, and relatively minimal social safety nets because family has traditionally played a very important role in providing support. These structural drivers generate plenty of headroom for growth, and the operating environment facilitates attractive long-term returns for shareholders.
We are constantly evaluating the development of the life and health insurance market in Asia because we want to invest for the future. There will be increased focus on being able to insure people with particular conditions, including the elderly, or those with specific morbidity risks. While insurers in the past were able to operate only in the context of risk pooling, the buildup of digital ecosystems enables us to partner with individual customers at a personal level and think about their health and well-being dynamically across their various life stages.
McKinsey: To what extent are the various Asian markets—such as China, India, Indonesia, Singapore, and Vietnam—different?
Lee Yuan Siong: The long-term structural drivers of growth are similar in each of these markets. I would highlight protection gaps, growing wealth, use of technology, and increasing consumer preference for quality products offered by strong and financially sound insurance brands. But the operating environment differs by market because of factors such as social safety nets, healthcare systems, and demographics.
AIA has been around for 105 years and has been operating in many of our markets for close to a century. We’ve been through different cycles, including two world wars and multiple financial crises and pandemics. This experience—and our management team, whose members come from very diverse backgrounds—gives us deep local knowledge in all our markets, which enables us to navigate their challenges.
Our operating model is also set up to recognize that each market is different. We describe this model as empowerment within a group framework. AIA Group sets a framework of standards, and each local business unit has a high degree of autonomy within this framework, including in how they manage and deploy their resources. This allows them to make the best decisions suited to the local market conditions.
In addition to our empowerment model, we have a practice of hiring local managers to run our local business units where possible. We also encourage mobility around AIA so that our high-quality talent gains exposure and experience from different parts of the business, helping them develop as leaders.
McKinsey: How do you manage this potential tension between the global and the local within AIA?
Lee Yuan Siong: The AIA Group office holds the local business units accountable for running operations in a way that is expected of them. Our businesses operate with autonomy, and we ensure that clear AIA standards, authority limits, boundaries and communications platforms are applied to a local context to ensure full alignment.
Informal communication is very valuable, but in any large organization, you also need formal structures for dialogue and debate. That’s the only way to get a common view of what the organization is trying to achieve and how to get there.
McKinsey: What differentiates AIA from the competition?
Lee Yuan Siong: AIA’s number one differentiator is our unique culture. People may talk more about our leading distribution platform, strong brand, or financial strength, but our culture is our major competitive advantage. There are four key elements to this. The first is being purpose-driven. We want to help people live Healthier, Longer, Better Lives. This is something that everyone, including our employees and agents, are truly excited about. And our customers recognize that. Our AIA One Billion initiative aims to engage one billion people by 2030, and since 2021, we have successfully reached 387 million people.
The second key element is our operating philosophy, which is simple yet powerful. We work on the basis of “doing the right thing, in the right way, with the right people. . . and the right results will come.” This philosophy is embedded at all levels of the AIA Group and reflects the long-term nature of our business. We have been around for more than 100 years, and we want to be around for at least the next 100.
Third, we are proud of our approach to developing our leaders. For example, our Leadership Essentials framework outlines the desired behaviors for employees at all levels. We look for and encourage qualities such as courage, clarity, and humanity. And the fourth key element of our culture is our empowerment within a framework approach, which sustains our success.
Taken together, these elements combine to create a culture that other companies just can’t replicate.
Of course, we also have a number of other competitive strengths, which we continuously invest in. Our people are exceptional, and our unrivaled distribution network consists of our premier agency and carefully selected partnerships. Financial discipline is also deeply embedded within our DNA. Our technology and digital analytics capabilities mean that we are fast, more connected, and ready for the future, and we take pride in our strong brand.
These differentiators are some of the many reasons that give me confidence in AIA’s ability to deliver continued profitable growth.
Steering AIA through turbulent times
McKinsey: As you reflect on your past few years as a group chief executive—which have spanned a lot of tumult and upheaval—what have been some of your biggest challenges?
Lee Yuan Siong: I joined AIA in early 2020, just as news of COVID-19 was beginning to spread around the world. The power of AIA’s culture was apparent to me very early on, and I quickly realized that it was something very special that I needed to preserve and build on. Usually, you will find new CEOs coming into an organization want to change the culture and bring in their own way of doing things and their own style, and impose it on the organization. I had spent the past 20 years with companies that were more hierarchical and top-down in structure. I knew that would not work at AIA and that I would have to adapt my own style.
And at the same time, we were dealing with the pandemic, and it became very important to bring the team together around the common objective of navigating the challenges to emerge even stronger. Before the pandemic, AIA was very focused on interpersonal relationships, and everything had to happen face to face. We had to quickly invest in the facilities for virtual meetings and build up the infrastructure to enable remote collaboration. We now have a hybrid work model. It makes us more productive while maintaining the strength of interpersonal interactions that AIA has always valued.
McKinsey: What are the key attributes of a successful leader?
Lee Yuan Siong: Successful leaders must always be curious and ready to challenge the status quo. One of the most common questions I ask my colleagues is, “Why are we doing it in this way?” The answer I don’t want is, “Because this is the way we’ve been doing it for the past ten years.” I want my colleagues to constantly be thinking about how we can do things better. And part of this is constantly cultivating curiosity related to new possibilities, trends, and technologies.
Making decisions to invest and transform a business takes courage. And a successful leader also needs to be able to communicate clearly in order to bring their team along with them.
McKinsey: How do you manage your time and energy, and what do you not spend your time on at work?
Lee Yuan Siong: First, I love my work and work energizes me. At the same time, it’s vital that I make time every day to recharge myself spiritually, mentally, and physically. You have to have the discipline to take every opportunity to recharge and to do it regularly.
In terms of what I spend my time on at work, this is about being crystal clear on what is and what is not my job. I look to hire people who are better and more capable than me. I set very clear expectations, and then I let them get on with it. I’m not going to do the work of my CFO, CMO, or CTO. My job is to make sure they are focused on the right priorities and to enable high-performing teams to consistently execute so that we deliver the results expected of us.
McKinsey: What advice would you give your younger self?
Lee Yuan Siong: I would take the same path because I think I’ve made the right choices at each point. One thing I would do differently is invest more of my time in building the right networks. You have other priorities when you’re younger, but more investment in my network might have helped me and the organizations I worked for to grow even faster. Overall, I have been very fortunate to spend my career in the service of an industry that makes a meaningful difference to our communities across Asia.
“Our firm is designed to operate as one—a single global partnership united by a strong set of values. We are equally committed to both sides of our mission: attracting and developing a talented and diverse group of colleagues and helping our clients create meaningful and lasting change.
From the C-suite to the front line, we partner with clients to help them innovate more sustainably, achieve lasting gains in performance, and build workforces that will thrive for this generation and the next.”