When Wilf Blackburn took up his appointment as CEO of Prudential Assurance Company Singapore (PACS) in October 2016, he wondered about the experiences ahead. It was Halloween - the date in England for remembering saints, martyrs and all the faithful who had departed. Blackburn had started an organisational transformation journey to reposition PACS as the number one insurance company in Singapore. In the context of his career, Blackburn could not decide if the appointment was going to turn out to be a trick or a treat.
Post 2008 Global Financial Crisis, disruption in the business environment due to regulatory changes as well as technology innovations forced the insurance industry, which until then operated more or less traditionally, to diverge from the past and begin to adapt to some of these changes slowly but gradually. InsurTech platforms and technologies leveraging evolving technologies created by technology giants and start-ups started to emerge. The Asian middle-class population was driving an exponential trend towards mass digital adoption.
PACS had been the powerhouse of the Prudential Corporation Asia (PCA), an autonomous division established within Prudential plc. Established in Singapore in 1931, PACS had served and prospered over the decades to become the largest life insurance provider in the country. However, in 2015, PACS had lost its coveted number one market position.
That year, PACS lost two key bancassurance partnerships. The company’s annual new business premiums dropped by US$82.7 million, and its market share slipped by almost five percentage points. By 2016, staff across the organisation began to feel the pinch of the declining performance. Frequent CEO changes meant that employees such as Tara Ban, a senior executive in Operations, who joined the organisation in June 2009, was working with her fifth CEO in her seven years with the company.
Each CEO had his own unique, quite contrasting style of leadership, and this quick succession of changes yielded different business strategies, with many not seen through their full completion.
Referring to Justin Lim, who had become CEO in September 2006, after a long career within Prudential Singapore, Ban commented, “Justin was highly personable. He remembered the birthdays of employees and was much liked by employees. His style of leadership was non-confrontational. He preferred to keep status quo and draw on relationships to build business results.”
In January 2013, Lee Johnson was appointed as the CEO of PACS. Lee had worked with a number of general insurance companies in the U.S. before relocating to China to assume a position with AIG for four years. He joined PCA in 2008 to take on regional roles in marketing and distribution. Netta Maple, Finance Director at PACS, said, “Lee wanted to make this a successful business, but he didn’t have the levers or mandate to do what needed to be done. He did not have the support of the rest of his management team. He was very detail-oriented and tended to take too much on his own plate. That essentially meant we were trying to run the business on the back of one man’s ideas.”
Samuel Gen, a senior executive in Human Resources, observed that there was discord between departments, and each unit preferred to work in its own silo. According to Gen, “Teams would try to protect their own people. Performance was sales driven, and the overall attitude was very defensive. Targets set were not aligned to expectations, and hierarchy was pervasive. Many teams were not paying attention to the right issues and were busy trying to untangle themselves from the fire-fighting mode.”
When Blackburn took over as CEO of PACS in October 2016, many employees were at a crossroads. The results of a recently conducted Barrett organisational culture survey indicated a level of cultural entropy reflecting ‘significant problems requiring immediate attention.’ There was a significant mismatch between the actual organisational culture at PACS and the culture desired by the employees and management. Competitors were keen to attract some of the talents of what had been the top-ranked insurance company for so many years.
This case, written Gordon Perchthold, Associate Professor of Strategic Management (Practice), SMU Lee Kong Chian School of Business and Lipika Bhattacharya from The Centre for Management Practice (CMP) at SMU, examines leadership styles, leadership transitions, corporate strategy and organisational transformation within the context of the insurance industry.
To read the case in full, please visit the CMP website by clicking here.